Are you thinking of starting an import export business but wondering, is the import export business worthwhile to start? Do you want to know, what is the future outlook for this kind of business, so you can decide is it worth to invest your resources into it?
This article will explain to you what is the future outlook, potential and what are the future trends in import export business, so you have the clear understanding of this kind of business.
So, is it worth to start an import export business nowadays? The short answer is YES, but you need to know the trends first in order to become successful. Read how we made 100,000 USD trough importing business.
Attention new entrepreneur! Learn, how you can make money in import export business nowadays, enroll our 100% FREE mini-course below:
What is the potential of import export business?
Import export business has very big potential especially for people from developing countries like India, China, Middle East, south-east Asia. It is because the developed countries need more and more raw materials, semi-products and consumer goods what is not wise to produce there.
The volumes that are moving from developing countries to developed ones are increasing every year. It is also interesting to note, that most of the import and export have been done by small and middle size companies. This means, that newbies should not afraid the competition if entering into this business.
Below you can see the Word Trading Organization chart what described the volumes of export and import in the world.
export and import volumes and trends
Until the volumes are increasing, then “it will raise all the boats”. The potential is high, especially for people from India and south-east Asia. India and south-east Asia nations can replace the Chinese decreasing exports to Europe.
Chinese export to Europe (raw materials and cheap consumer goods) is decreasing, because of the rising costs in China.
China is still the “world factory”, but cheap production center is moving from China to more lowe costed countries like Vietnam, Philippines, Cambodia etc. Also, India can now replace Chinese export of Cheap goods to Europe.
It is possible, that now is the best time ever for Indians, south-east Asians, and the middle east to start exporting to Europe. For the previous group of nations, I see the biggest growth potential.
How much can you make the profit in import export business?
It depends on how seriously you are dedicated to this. You can make it on the side job and earn 1000-3000 USD per month as an agent or you can make it full time and make 5000-10 k USD per month and even more.
I still remember, when at 2014 I made 100 000 USD pure profit from just one export-import deal between Europe and China, I did it alone and it took me about 6 months to finish the project.
You can read our case study about how we made 100,000 USD with about 6 months trough importing from China. I am sure you will like that case study, as we explain all step-by-step and show you the money numbers and calculations.
It is actually not so complicated to make big money in this business when you know how to do. You need to know the right product, right markets and how to find the buyers.
We have created an in-depth online course that teaches you exactly those three previous so you can build the foundation for your business. Learn import export here in our programs.
Also, the world is becoming more open, the import tariffs and barriers between Europe and developing countries are lower than ever before. Europe is the no 1 place where you should export.
Now the Indian government knows this and supports and encourages new entrepreneurs to start exporting business in India.
So, it is definitely worthwhile to start import export business if you are interested in it, especially if you are from developing country.
But, before you really get started in this field, you need to know the trends in import-export business.
The trends will determine what is the best way to make money in import export business. And you need to be aware of the trends and follow them!
Related article: Most profitable business in India
The most important trends in import export business
Following trends should be taken into account if you are starting your own import export business
1. Traditional trading companies are losing their positions to agents and sourcing agents.
This kind of tendency is happening, because direct buyers ( factories) are looking to buy from direct source to lower the costs. In order to low the cost, they need to sweep out the middlemen.
This is especially strong in developed countries. In Europe, the traditional small trading companies are not competitive in the market anymore. There the big supermarkets and big multinational companies had been pushing them out of the market.
In the developing countries, this trend is not so fast still. In developing countries, let’s say in China or India, their traditional trading companies are still very necessary, because small local factories may not have the export-import license or necessary knowledge to export to the international markets.
But, anyone who is planning to start import export business, should know that trend.
Now, it is much more wise for new entrepreneurs to start as an import-export agent. The export-import agent is much more competitive compared traditional trading companies because an agent has very low overhead costs.
Let’s look one easy table below, where costs are compared agent VS trading company
Main overhead costs for agent and trading company.
As you can see, the import-export agent has much fewer costs compared trading company. Also, the agent needs much fewer resources to operate. These two facts are the main reasons why agents are pushing trading companies out of the game in the future.
For newbies, it is wise to start import export business as an agent. You are competitive in the market and you don’t need many resources to get started.
2. Factories and direct buyers are preferring to work more with agents than trading companies.
In 10 years ago, factories and direct suppliers didn’t want to work based on commission. Agents were recognized as scammers at that time, nobody wanted to make any business with them. Also, it was more common then, that agents were being scammed and didn’t get their commission fee back then. Learn, how to protect commission fee
Now times are changing and factories and buyers are looking to work agents because they know, that agent fee is much lower than the trading company profit margin.
Also, the buyers know, that agents are on their side, they know that agent only sources this kind of supplier what meets their requirements. Trading companies, on the other hand, are just looking to sell you, they try to make the highest profit and don’t care so much about the quality.
Soon buyers are only looking to hire agents to source the right supplier to them and buyers are happily agree to pay the commission.
3. The rise of the sourcing agents
From the import-export agents, there grow out the new form- a sourcing agent. A sourcing agent is the easier form of the import-export agent. A sourcing agent is usually the private person who is only making one-time fee when he/she source the right supplier or buyer to the other side.
Sourcing agents were not so common and popular years ago, but now this is changing.
Starting as a sourcing agent is the easiest way to get started in the import export business. we have free online course, what will tell you more about the sourcing agents and how to get started. You can enroll below.
Attention new entrepreneur! Learn, how you can make money in import-export business nowadays, enroll our 100% FREE mini-course below:
4. Digital marketing is becoming very important
10 Years ago, import-export companies listed themselves in some trading portals and yellow pages and maybe visited trade fares. Now using more digital channels are becoming crucial to your success. It is not only in the export-import business, it is in every industry.
One must have a website and you need to know how to reach your potential customers and clients through digital channels. New skills are needed what most of the older generation don’t have.
You need to know:
- how to use social media in the right way.
- You need to know how to rank high with related keywords in search engines.
- Also, you need to know about marketing automation and other new technologies.
- You need to know, how to make paid advertising on the Google and social media
- and much more
Also, using digital channels it is very cheap if you know how to use them the right way and this is really giving you the competitive edge. Digital marketing allows even solopreneurs to reach to the global market with very low cost.
5. Online selling is replacing traditional exporting and importing
Together with the digital marketing, the E-commerce is growing tremendously. E-commerce industry has the biggest growth ever! Online sellers are taking the market share of such offline giants like Walmart, IKEA, Amazon.
The reason is same like with export-import agents- the online selling overhead costs are remarkably lower than offline shopping centers has. in Online you don’t need cashiers, showroom rent etc.
Selling your handmade goods online gives you the opportunity to sell it to the whole world, without any middleman! This is a great opportunity for people from developing countries like India, Bangladesh, Philippines.
Years ago, you could only sell big volumes to the trading company or importer and ship it with sea containers. But now, it is even possible to sell one item and get the premium price from this.
Online selling and buying and collecting payments online open new perspectives to everyone in export-import business!
6. Personalization and flexibility protect small payer against big ones
Big exporters and importers cant be very flexible and they cant offer very personalized products for their clients.
But small agents or even trading companies can organize small orders custom made to the buyer ( big companies never do this). Buyer can get the exact design what he needs.
Small companies can really compete against big companies with custom-made products and with flexibility.
You can sell your custom-made products online.
7. Things must be exported from where it can be produced with lowest costs
10 and more years ago it was not so actual. Now as the profit margins are lower than before, then it is more important than ever that certain product will be exported from there where it can be produced with lowest costs. But at the same time, the quality must be at the required level.
This is because every country is different. Different development level, different climate, different availability of natural resources. All this is the reason why the import-export business exists.
Example it is no sense to export Metal from Norway to India. Norway is very expensive country and Norwegian production costs are too high. So it must be backward, from India to Norway.
Because of this trend, then everyone who wants to start this kind of business, needs to do detailed market analyze first. You need to make sure what would be the best products in your country to export. Here is the article about the best export opportunities for Indians.
8. Things must be imported from the right country as well.
This is very important for the people from the USA, Europe, Canada; UK etc. Developed markets are very picky about the quality now. Pickier than ever before.
Similarly, like with exporting, it is also important, that anyone looking to import something is also making sure first, that he/she is sourcing product from the right country.
It is easy to fall into the love of low prices, but importers also need to be sure that also the quality is what they need in their country.
Example, it is still not wise to import certain high-tech products from China or India. Even the price seems very low compared Europe or USA. Usually, the quality is not what it should be.
Another example of the importation:
Why import Italian Furniture from Italia, if you can let Vietnamese produce the same quality and looking furniture to you with 50% lower price?
Correct! If you really want to make money with importing, then you should really let the Italian furniture produced to you in Vietnam. Furniture is easy producVietnamesenamise can handle this.
9. Information moves faster than ever before
in import export business, all necessary information is just click away
Everything is one click away!
With this I mean, that there are no secrets anymore. Most of the players who are on the import export business are well informed about the current prices. If you have a very cheap supplier, then you can be sure, that you cant hold that price lowe long. Someone will find your supplier and offer a higher price and you lose the deal.
Everyone, who has phone and internet and has enough education is able to get updated information on the world prices, no matter where he/she is from.
Example, from Indexmundi you can get quite adequate information for various commodities. You can see how the prices had been changed.
20-30 years ago, it was possible, that price differences were tremendous and it was possible to make fortune in export-import. It was just because suppliers or buyers didn’t have correct information about the prices.
In today, if you find something significantly cheaper than the market rate is, then you need to ask yourself: Where is the catch?
Conclusion
- As a conclusion, import export business is still a very great business where to entre, Especially if you are from developing country! It is worthy to invest!
- But to become successful, you need to follow the trends mentioned above. Follow the trends do the work and you will be successful.
If you are from India or another developing country, then here is one article, about how to start exporting business.
But you need to do the analyze and start from educating yourself first. Also, do the things in the right order, start from analyzing the markets.
Choose the right products, right forms of operation ( agent or direct exporter), also find customers before and make sure their requirements and needs.
Only after you have been made clear the three most important things: Right Products, right target markets and you have found buyers, then it is time to move further and start your business.
Attention new entrepreneur! Learn, how you can make money in import-export business nowadays, enroll our 100% FREE mini-course below: