1. Gaining basic understanding
To start an import export business, the business owner should have a similar business background. He/she should have a basic understanding of global finance and international relations. This shall help the entrepreneur in dealing with suppliers to sell or buy products. There should be thorough research to be performed on import and export business like knowing the tariffs, duties and rules and regulations of countries; to make future export or import relations with.
2. Legalising the Business
The priority task before business registration is creating a business plan that shall consist of all the necessary details of the business. After creating the business plan , business owners can apply for company registration under the Ministry of Corporate Affairs (MCA), as private limited or public limited company , sole proprietorship , partnership firm , limited liability partnership , etc.
Secondly, business owner needs to obtain a GST and Service Tax registration certificate. Next step is obtaining the Import Export Code (IEC) that is issued by the Government of India. After getting IEC, business owner needs to get Registration-cum-Membership-Certificate (RCMC) that is granted by any Export Promotion Council of India.
3. Finalizing the Products to Import or Export
The first thing after legalising the business is to finalize the type of goods or commodities; the applicant needs to export or import. Market identification is equally important to trade like choosing a favourable country for business and considering related opportunities to explore. Next thing is to co-relate whether the chosen product is in demand in that country or not. If not, then changing either of two will be the only viable option.
4. Sourcing of Suppliers and Buyers
After finalizing the product to be sold for international trade (export), business owners need to find suppliers, local manufacturers or producers of that particular product to make the business owner lead his/her export business ahead with foreign company. Entrepreneur also needs to understand his/her buyer that could be from these entities like wholesalers, consumers, retailers, manufacturers, governments, or another international body.
5. Pricing the Products
The pricing of the products should be inclusive of the mark-up from the base price of the products purchased from the supplier or local manufacturer. Like a supplier has already included his/her commission in the pricing on the products sold, the same way business owner also needs to keep the margin or commission of at least 10% - 15% before selling it to the customers. The margin percentage or commission shall vary from trader to trader and also depend on the type of goods and commodities.
6. Managing Logistics
The most complex job out of all in this business is to transport goods or commodities manufactured at a particular location and selling it to some other International location. For this purpose, a business owner needs to hire a global freight forwarder, as it serves as a transport agent for moving goods and minimising burden and tension. Freight forwarders will themselves arrange shipping documents, insurances, tariffs, licenses and permits required for trading in the international market.
