Could Your Business Start Importing Foreign Goods?
Posted by Allison on 5 April 2009, 11:05
Virtually every business is always looking to increase profits in some way, and sometimes the best way to do that is to start looking further afield for solutions.
Of course this doesn't apply to all businesses, but for those that rely on selling goods with a high margin for profit, sourcing products from abroad might provide the ideal solution to making more money and developing a business that might have become a little stagnant.
However with that said it isn't something that should be done lightly. As with all forms of business and development you should do your research first to find out all you can about this form of sourcing stock.
There are plenty of benefits to this kind of transaction though. Firstly you may find you can get hold of products at a far better price than you do at the moment. Many British wholesalers buy their stock from abroad, and add on a profit of their own before selling it to you. So imagine how much money you could make if you put the required amount of work in to be able to source the products directly from the supplier yourself?
Not only would you get them at a better price, you are also likely to benefit from a favourable exchange rate with another currency. This is especially true if the pound is performing particularly well against the currency you will be buying the stock in.
Incidentally the best way to pay for your goods is by credit card, since it will give you a greater degree of protection in case something goes wrong. That's not to put a dampener on things; it's merely good common sense. You would also be wise to check how the goods will arrive – some suppliers only deliver on a pallet, which would be rather unsuitable if you are operating out of your own home and you happen to live in a flat! Watch out for delivery costs as well. Some suppliers operate a flat charge, but others will only do that for deliveries in their own country. Shipping abroad is inevitably more expensive than shipping within your own country, and if they charge on a sliding scale according to weight then you could be in for a shock. Make sure you know what you will pay up front.
It can be useful to keep a currency converter open on your computer screen when you are organising an order with a foreign supplier. Regardless of whether you can order online or you are looking through a trade catalogue you will want to know how much items will cost you.
There is also another distinct benefit of sourcing your own foreign suppliers, and that is the fact that you will often come across different products than you would find back home. This gives you a real competitive edge, since few if any other businesses will have the same items on sale as you do.
So how do you find these suppliers in the first place?
The best source of information, as always, is the internet. If you look up the type of goods you are after, together with the country you are thinking of importing the goods from, you can get an idea of the kind of possibilities there are out there. It's also worth finding a few internet sites that deal with importing goods – specifically for people to resell in this country as opposed to trying wholesalers – and sign up to any newsletters they may have, since these can offer a great deal of information that you wouldn't otherwise be privy to.
There is another very important area you need to think about before you start importing goods from another country, and that is the issue of keeping proper records. Of course this is a necessary task whatever you might be buying or selling, in order to keep your records intact for the taxman, but it is especially important to keep everything related to these transactions so you can make sure they are recorded correctly.
When you buy goods in another currency, the amount you spend in that currency will be converted into pounds sterling as soon as you make your payment. It is this figure which should be entered into your records. It might be helpful to make a note of the exchange rate which applied to that transaction in order to keep a more complete record of what went on.
As you can see there is a lot to think about and remember before you can even begin to get near the stage of importing new stock. Successful sellers don't tend to share their sources of stock readily with anyone, for fear that their profits will be damaged as a result, so you will need to do this part the hard way in order to find the right sources for you. It may take weeks or even months to locate a suitable source of products, but if you keep searching online and take note of anything you find out, your efforts will eventually be rewarded.
You will also sometimes find clues right under your nose though. Take your current stock, for example. Most of it will have a sticker on it or some reference to the wholesaler who sold it to you in the first place, but they will also often have another piece of information on there too – and that's the name of the source they imported it from.
If you have a name that you can search for, start with that and see whether you can find them online. If you can then you are off to a great start. Even if there are no details for companies looking to import goods in their local currency, make sure you email them and ask up front and direct as this often brings great results.
So there you have it – sometimes paying for stock in your own currency isn't the best way to go after all.