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Over the last few years, the rates of imports and exports in the US have risen exponentially.
Government statistics from the US Bureau of Economic Analysis show that in 2021 December alone, average imports increased by $7.1 billion, and average imports increased by $7.0 billion.¹
As the data shows, customers are increasingly seeking new and different products from all over the world when they shop.
Running an import export business can be a lucrative business opportunity, but there are other considerations that need to be kept in mind to become profitable.
|Import export businesses often face financial obstacles because of payments in different currencies to international suppliers and all the fees incurred. International businesses can avoid high exchange rates with Wise Business to improve multi-currency cash flow and revenue.
This article will look at the meaning of import and export, how to start an import export business in the USA and if it’s a profitable business idea.
|Table of Contents
Before diving into how to start an import export business, let’s first establish what is import and export.
Import refers to physical merchandise that enters the United States from foreign countries.²
Export refers to physical merchandise that is transported outside of the United States to a different country.²
There are many different kinds of import export businesses that bring products to the United States. Some businesses are importing from other countries, such as China.
Starting an import export business in the US consists of several different elements.
First, you’ll need a business plan, products suitable for import export, and suppliers you could potentially work with.
You’ll also need to apply for import export licenses in the US and keep an eye on any regulations that could affect your business.
Before your import export business can start operating, you’ll first need to set up a business plan and outline how your business will operate and other key factors such as:
1. Naming your import export business
Every business starts with a name!
The first step in your export business plan is to name your import export business and begin to develop a brand.
Most import export businesses create their name by including keywords related to the products being offered. That helps customers identify the business quickly while also helping companies to develop visibility.
The Wise Business Name Generator - Import-Export can help you if you're stuck on names.
2. Undertake market research
Your business plan must also include market research and analysis to show your business will become profitable.
The first step is to do an analysis on the products you’re interested in importing or exporting.
What is the demand for it in your target markets, and who are your target customers?
From there, you can start to develop the analysis to understand:
- who the competitors are,
- what pricing looks like for the products you’re interested in,
- and how international expansion through imports and exports could help your business grow³.
3. Develop a marketing strategy
Once you have conducted market research for your import export business, the next step is to think about how the products will be marketed and sold.
You can use a type of analysis like a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) to pinpoint key reasons why customers should purchase your product.
What sets your products apart from others in the market, and how can you best communicate that?
If you’re considering exporting for international expansion, think about how your marketing strategy will be tailored to local markets. You may also want to consider product localization as well.
Consider factors including language, culture, political trends, and more when designing your marketing strategy for your website and social media channels.
|A financial strategy is also key when paying suppliers abroad and receiving payments from overseas customers. Allow your buyers to pay you in their own currency, building trust and boosting customer experience.
Much of the advice for starting an import export business from home remains the same as with brick-and-mortar. Setting up your brand is crucial, as well as identifying where your products fit within the market.
However if you’re running an import export business from home, it’s doubly important to have a strong online presence. So you have to learn the ropes of how to start a business online.
eCommerce import export businesses need to have a marketing strategy that is primarily focused on digital marketing to ensure they can acquire new customers.
That’s why your import export business from home should have a well-designed website, and social media accounts on platforms like Facebook and Instagram with regular content updates.
Import export business profitability is dependent on several factors, including:
- The cost of producing goods
- Where the items are being produced
- Cost of shipping and freight
- Price point they are sold at when introduced in the market
- Taxes, duties, and levies incurred
- Any laws or regulations both in the producing country and importing country
The key to becoming profitable as an export import business is to balance these elements while finding a niche in the market.
For example, many import export businesses are successful because they offer hard-to-find items from different countries or unique items that are not available with other retailers. Differentiating themselves from competitors allows them to thrive.
Other businesses may work out deals with suppliers to purchase items in wholesale quantities, thereby lowering the cost of the items and passing those savings on to customers.
Businesses may face some difficulties in the first few years as they establish their footing and enter the market but many businesses, both large and small have seen success through import and export, including large public companies and small businesses.⁴
Exporting products to other countries gives businesses opportunities to grow their business by increasing sales and creating jobs in new markets⁵.
In addition, international imports bringing products into the United States can be beneficial to offer customers more choices and options in the market.
Some examples of import export products include:
- Clothing and textiles
- Furniture and home goods
According to the Census Bureau, the top 5 types of products imported into the US in 2020 included⁶:
- Computer and electronic products
- Transportation equipment
- Machinery, except electrical
- Electrical Equipment, Appliances & Components
In terms of exports, the top 5 products exported from the United States in 2020 included⁶:
- Transportation equipment
- Computer and electronic products
- Oil and gas
While the statistics above show the most common imports into the United States and exports out of the United States, many other import export business opportunities are available.
Procter and Gamble: Sell retail consumer goods, including cleaning supplies, skin, and personal care, grooming, and more
Caterpillar: Exports machinery and equipment across the world
America Chung Nam: Exports bulk quantities of paper and packaging materials
Walmart: Conglomerate Wal-Mart imports retail goods across sectors such as home goods, furniture, clothing, food and beverage, and other items.
Target: Similar to Wal-Mart, Target imports retail goods across many different sectors such as furniture, clothing, home goods, and more.
Home Depot: Home Depot is a retail chain that imports items relating to home furnishings and repair, as well as other related products.
After developing a business plan, the next step is to look at any relevant import export licenses you may need.
Most products being imported in the US do not require a license. The US Customs and Border Protection have put together rules and regulations for what items may need an import export license.
Certain types of commodities such as agriculture, food, livestock, and others will require an import license.
You can apply for these with the relevant agencies while US Custom and Border Protection will act in an administrative capacity to verify the license⁷ ⁸.
Don’t forget that you may also have to obtain state and local licenses for business operations depending on where you’re running your business from.
Importing and exporting is a complicated business. Dealing with overseas suppliers will come with many benefits as well as some difficulties.
Managing multi-currency payments will become crucial if you don’t want to spend money on high fees and unfair exchange rates.
With Wise Business you can save up to 19x compared to PayPal when sending business payments abroad.
Get local account details in 10 currencies and offer your customers to pay you in their own currency.
Save hours on admin by managing subscriptions, payments and invoices in up to 54 currencies in one place - your multi-currency account.
- bea.gov - US International Trade in Goods and Services, December 2021 | US Bureau of Economic Analysis (BEA)
- United States Census Bureau - Common Trade Definitions - Foreign Trade
- Small Business Administration - Export Business Planner
- U.S. Department of Commerce - A Basic Guide to Exporting
- International Trade Administration - Why Export?
- census.gov - US GOODS TRADE: IMPORTS AND EXPORTS BY RELATED-PARTIES, 2020
- Visual capitalist - Infographic: The Top US Companies by Import and Export Volume
- cbp.gov - Importing into the United States A Guide for Commercial Importers
- usa.gov - Importing and Exporting
All sources checked on 2022 February 23
This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.
We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.
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