5 common mistakes in import and export business (how to avoid them)
It is a new trend to start an export and import company. The import and export business has boomed like mushrooms in recent years. There are many products one can sell both within the country and abroad. This type of business presents huge opportunities for those who have the skills and intelligence to successfully sell high-demand goods.
However, it is not an easy task to manage an import and export company. The road to success is not easy. These challenges can impact everything, from your operations to your customer service, to everything in between. You need to know the top mistakes that can be costly for your start-up import/export company before embarking on your journey through the international trade landscape.
Not investing in cargo insurance is another example of a mistake. Although cargo insurance is often viewed as an unnecessary expense by many importers, it is important to consider the risks associated with transporting goods. This will help protect your company from financial disasters and damage to your reputation.
A common mistake in the international-export industry is to use unreliable brokers as customs agents. While customs clearance can be a crucial part of any import business, many importers just want to save money and hire the services of a non-experienced broker.
You can avoid these mistakes, regardless of their potential impact. Excelsior Worldwide Freight Logistics has a great infographic that explains how to avoid common mistakes in your import/export business.
Here are some common mistakes to avoid when doing Import and Export business:
Signing a contract while not confirming the legitimacy of the buyer/seller
Many manufacturers and small traders want to expand their international trade business, but don’t pay much attention to the reliability of importers. Unnoticed mistakes can lead to more losses.
Many companies try to lure exporters or importers with fake company profiles and product portfolios. Your right to understand your customer, both in the international and domestic markets, is paramount. Moreover, a business can minimize risk and maximize profit by checking the legitimacy or reliability of the buyer or seller with the appropriate government officials.
Understanding country regulations
Exporters make the common mistake of thinking they can sell anything to other countries. It is often not true when it comes to importing goods into the Import-Export Industry. Some countries have specific rules that restrict imports from certain products.
These norms can help an exporter save money and get their products in the right place.
Inadequacy of import-export knowledge
Small and medium-sized enterprises often believe they can sell their products on the international market without any loss. The lack of knowledge about import-export regulations could lead to a much greater loss than anticipated. To ensure that the import and export business runs smoothly, there are certain terms set by the International Chamber of Commerce (ICC). To be safe and avoid penalties, it is important to fully understand the import-export regulations.
Incompetent customs booker increases money loss risk
A customs broker ensures that your business in the Import/Export Industry complies with the strict rules of both the government of the countries involved (both the country of origin and the place of residence). If the documentation isn’t verified and meets the legal norms, an incompetent broker can cause a greater loss to the business.
It is important to get in touch with trusted Dgft Consultants after thorough verification by the competent authority. This will ensure that all businesses are met with ease and hassle-free documentation. They also have a full understanding of the requirements for certain products.
Paying attention to foreign exchange rates is not an option
A common error in Import-export is for business owners to ignore foreign exchange rates when importing and exporting products from different countries. Sometimes this happens because traders don’t consider the risks involved and focus only on the profit margins. In reality, rate fluctuations could cause enough margins to be lost. For smooth transactions and high margins, business owners need to pay attention to the rate fluctuations when materials are shipped under the 30 to 90-day credit terms.
It is essential to avoid common mistakes that can lead to failure in the import and export business industry. This will allow businesses to access the global marketplace easily. You can also take the help of Import Export Consultants to avoid potential losses and maximize their profit.