Starting a business is not an easy decision, let alone if we are talking about an import business, because, among entrepreneurs and beginners of international trade, arise great questions and doubts. This is mainly because it is thought that a million-dollar investment is needed, or a career to know the processes in customs. Randall Ortega Castillo an import/export expert from Costa Rica and the founder of RACO Investment, provides data and tips to learn how to start an import business in Costa Rica.
Before venturing into import, you should make sure that the product you plan to market is profitable, that is, it has good demand from customers. Many entrepreneurs make the mistake of starting imports without making sure that the product will be sold, because they take the phrase that “he who does not risk does not win.”
Says Castillo, “It is good to run some risks in business, but in an import business, decisions should not be made lightly, as we are talking about a more serious investment. There are many ways to investigate whether the product is profitable: one of them is to observe the area where you want to market, that is, what prospective customers are looking for and see if any suppliers already provide it or not.
Another effective way is network research. Fortunately, you can find surveys, question forums and even studies that report how much people want a product. Remember that you can order the product in small quantities, and an advantage of profitable import businesses is that there is the option to order the goods in samples or gifts, which is favorable for two reasons: the first because you exempt from some taxes, and the second because that way you can spend less and try the supplier you think suits you, but order the product when you’re sure that might be your right distributor.
One step, finding suppliers, is perhaps the biggest problem for those who do not know how to start an import business. This is because there is always the fear that the product is not good, or it is a scam. Adds Castillo, “To check the quality of a supplier’s product request samples or gifts. However, as soon as you see the slightest irregularity in a seller, then alert yourself and investigate them further; or just look for another one. Remember, it’s your investment you’re risking.”
The most used sites to find suppliers are Alibaba, Globalsources and Madeinchina and, although they are usually reliable, you should be alert because there are certain suppliers that are solely intent on deceiving buyers, either through fraud or with a poor quality product. The most recommended in this regard, but which few can carry out, is the personal visit to the supplier’s facilities or factories, this is more recommended for those who want to opt for Chinese imports, because the eastern country has the reputation that it makes poor quality products, this is true and at the same time not, because in China there are both good and bad manufacturers.
In doing the research, check the information. A good supplier must give you a price for proof of the product, as well as the costs of a small order and a batch. Also, check shipping methods. In this sense, there is the air and sea form. Depending on what you want, the supplier can give you one or the other option. Also, negotiate price and conditions. Some sellers are more accessible than others, although this is also a double-edged sword because you may well have the cost lowered, but if a vendor accesses quickly, it may be a sign that they want to scam you. Lastly, check payment methods. Some providers are open to more than one payment method, others only support one. The most common thing in this regard is to have a PayPal account, which is usually handled for international purchases.
Importing, and even exporting, involves a lot of important data to do it correctly. However, you don’t have to discover the bad processes necessary as surprises. Following these tips and doing your homework will help you reach the finish line sooner.