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Hello friends.

I have started this thread to get inputs and help from all the people who are involved in the import/export business. Just to make things simple, I have put down my queries in points :

1) How should anyone go about starting their own import/export business? What all things need to be taken care of if you want to start from the scratch?

2)How to decide which product to export/import in the beginning, in order to get the experience and the feel for the business and to understand the tiny nitty-gritty’s of a business? (It is ok to make less profit in the beginning as long as there are no losses and more learning).

3)Does one need lots of funds to start up front in this business? I have heard you can start with little or negligible funds and operate from your own place? (At least for the beginning till you have gained enough profits and experience to open up your own office).

4)Does recession has any effect on the import/export business per se? Or are there some commodities that go unaffected even during the time of recession?

These are some of the questions that I would like to get your opinion on. Each and every opinion will be highly appreciated. During the course of our discussion, some other questions may come up which we can discuss further later on. I hope this will not only help the ones who want to start the import/export business but also the ones who have already started it and are facing some difficulties and problems.

Regards.

There's always a certain amount of risk involved when dealing with the export-import arena. You have to be very cautious of what you want to work with.A lot of people choose textiles, some prefer electronic components while a select few try exotic materials like perfumes/dyes etc.

Have you thought about what you would ideally want to work with?
And one thing, it takes a few years to really start seeing the results of your hard work.Again,there's no fixed pattern, but the general trend suggests that. Be prepared for a few disappointments,as thats part of the whole process.

First question is why did you choose this field?
-You need to get the all the paper work first, I.E.C. Number is what you have to get first, you'll need to get this from DGFT office in your city[this takes anywhere from 3 days(i was lucky) to 6 months], you'll need to have a PAN, show a permanent address from where the business will be handled,need to mention what sort of business you'll doing, Bank account and a letter from the manager of the bank mentioning the details of account such as how long have you be dealing with it and hows your track record and the address given to the bank while opening the account. there are commodities and materials mentioned on the form you have to specify that you'll be dealing in.

-You have to decide what sort of business you'll be doing Imports of good or exports or both than you have to decide what product you can market in both for exports as well as imports, do you want to be trader or manufacturer exporter, this one dependence on you and your ability to market the product no one else will be able to do that for you. This is very crucial as you'll be running the show and you should know what market is and what kind of produces are easy for you to work with.

-get your self a account in any exim bank after you have the IEC code before doing business with any one abroad.

-As for funds , your just thinking of the place of work and not the actual funds needed for the business, You'll need funds to buy the product before exporting it or importing. The fund depends on the product you decide on, and the quantity and quality of the product.

-As for nitty gritty s of the business there are to many to jot down here.

-recession has the biggest effect on this business and also the volatility of foreign currency, no product is recession proof.

As for risk assessment , any business has risk , it's on you to find out what your limits are and how much of a risk can be handled by you.

I hope this has helped.Are you thinking of starting this business?

Hi, I am in the Export trade for quite some time. If you need any help please feel free to ask me.

Dinar has answered most of your questions above.

I will only add the following - Please identify the product you want to import / export. This could be anything from eatables to consumables to fashion to machinery to soft toys etc.

Also remember an added benefit when you export. The govt of India will give you a drawback because you are bringing in foreign currency. That is if you are the exporter. The percentage of drawback depends on what you export. For Example - I export Shoes which are Leather made - we get 10% drawback on this.

So the first thing you need to do is get an IEC Code, A Bank Account which can get foreign transfers.

With any export or import business, keep in mind that you are dealing with foreign currency. Mostly USD or Euros. The single biggest source of problems in this business comes from the volatility of the exchange rates. If you are doing business on a large scale, i would recommend some CAREFUL hedging. Or else simply allow for a 30% margin for fluctuations in your pricing.

I decided to choose this field because first i find it challenging personally, and secondly i have studies a little something about import/export during my 1st year of MBA and found this field quite fascinating.


Can you please elaborate a bit on this one? What my knowledge goes(pardon me if im wrong cause im a newbie in this field) either you are a) manufacturer and export your product through your company or b) you are just an importer/exporter, ie, you take the product from the manufacturer and export/import it. By marketing the product i hope u mean B-2-B.

As far as my knowledge goes(again pardon me if im wrong), you deal through the L/C and when the documents are submitted to your bank, the buyer's bank releases the money and you get paid your commission by the seller manufacturer. So why do you need the funds to buy the product before exporting/importing?

I am very much thinking about starting this business. But it is better to have a somewhat informed start than to start blind-folded. Obviously in this business you learn through experience but it is better if you start with as much information as possible.

It's good to hear ,that you have some knowledge of business through your studies.

-Manufacturer exporter is what you get from the the term, you manufacture a product and you export it, even fresh fruit and vegetables , caning,etc come under this if your growing it. Trader is what your thinking of [my guess] you buy stuff from other people and sell it to others either in Indian market [import] or foreign market [export].
Marketing is not just B-2-B.I do not know what your looking at imports or exports and whats your business model, commission agent, seller ,etc.

-As of fund the L.C part ,your right in a way when your dealing with foreign clients and your importing, but since your not manufacturing , you will have to pay for the product before it leave Indian soil[that the norm]when exporting unless you know the seller very well and he is OK with payments later [again considering your trading]. Than there are transport fees , dock fees, paper work,loading and unloading of containers,Duties, etc. Again I am assuming that you are dealing in products of at least half a container or so. Not the single parcel through courier.
Even if you are trying to work on commission there's always a delay gap between payment and stuff so you have to bare the transaction for some time.

-Also you need to choose what country you want to do business with, select around two, three first, keep a standard currency transaction first say USD or euro. than choose a product if you want to trading and marketing the product here or elsewhere. Also decide what you'll be doing first exports or imports.Try and avoid perishable items [fruit,veg,etc].
Commission work is good but a bit risky, as it your neck with the government for somebody elses product which may be anything, so while doing this you have to be extra careful.

Thanks.. somebody started a thread. Even I have been considering an export business and these were exactly the questions I had.

Import export is fine, however what field do you want to gain expertise ?

In today's times it is important to be a specialist in one or the other type of commodity.

Say petroleum products will have a monopolistic supply side, you can buy only from the refineries & petroleum companies worldwide. Again on the petro side, you need to be a strongman in terms of logistics say petro storage tanks, bonded ware houses all these need a decent size of funds (say 10 crores without land for a sizable storage facility)

I am only giving examples. I used to market chemicals - one type of chemicals in the ASEAN, Indian subcontinent and East african countries. Our supplier who we were agents for is a monopoly - the raw materials for the same come from this region and it is a state owned co.

Similiarly you need to specialise in some sort of product, be it gold, silver, grains, food stuff etc.

The risks of currency can be mitigated with the help of forward covers at a marginal cost.

Cheers.

I am in to Import & Export. If any one is intrested or currently in to this line please let me know. Will be good to deal with folks from the Forum.

Thanks

hey,you've chosen not to receive PM's. so here goes my phone number. call me i gotta talk. 9845259543.- avinash

Hi, i have all the settings enabled.

I am not in mumbai so cant call, any chance you can send me a email at max_man_13@yahoo.com

Cheers

I dont know a whole lot about import/export. But I do know a bit about commodities.

India has a very large number of foundries. As a 3rd generation foundry owner myself, I know that scrap metal is a very profitable commodity. If you do get into importing scrap metal, I will be your first customer :).

Other commodities you could EXPORT are chemicals, rubber etc.

Do you want scrap metal or are you selling scrap metal ?????

If I am a foundry owner, why the hell would I be selling scrap when its my main raw material?

I said I will buy scrap if he manages to import it.