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You just got home from a trip to India and fell in love with all the exotic food, beautiful clothing and unique artwork. Now, you’re thinking of selling some of these items through your import business, or launching an import business specifically to accommodate your recent finds. Is that feasible? The answer may be “yes,” so long as you have a solid grasp of the domestic appetite for each new product.
Salvatore Meleleo, president of US Import Consultants, a New Jersey-based customs broker that specializes in importing wine and spirits. He says it’s common for people to travel to Italy and come home wanting to import wine. But he advises proceeding with caution.
“I discourage people who wake up one morning and say, ‘I want to be an importer of wine and spirits,’” Meleleo says. “It’s a lot more difficult than that. The import stuff alone is very complicated, but the hard part is actually selling the product.” He says it’s important to practice due diligence and hire an international trade specialist or consultant who can help navigate import rules and regulations.
Business owners can work with these professionals to research markets ahead of time and ensure there’s a market for the product back home. Key questions to consider include:
While hiring professionals to conduct research can give importers an edge, it’s not always possible for newer, smaller businesses to afford this type of outside help.
Victoria Neale, owner of Monroe, New York-based Victorious Solutions, started importing a South African hot sauce called Veri Peri more than two years ago after visiting the country. Even though she had no experience in the import business, she conducted research and discovered that there was a large market for hot sauce. “In writing the business plan, we realized how huge of a market the hot sauce industry was,” she says. “That was really our first reassurance that we made a good decision in our product.”
Before taking the plunge and buying a full container, Neale hosted dinners at her house every Wednesday night for a year and a half as a way to test her local market without investing large sums of money. “I invited anyone who would come — friends, family, friends of friends. I’d cook a different recipe with Veri Peri and pick people’s brains and see what they thought. I was on a very tight budget, and I started this company with really no outside help. I had to do this all on my own.”
Finally, she decided that she would reach out to the manufacturer of Veri Peri, All Joy, to see if it would consider allowing her to sell the product in the U.S. “They hadn’t done anything like it before, but they were open to it,” she says. “I was honest and said, ‘I don’t have a tremendous amount of experience here, but I believe in your product.’” They set up a performance-based deal to start, which was based on volume.
Neale also leaned heavily on her local U.S. Small Business Administration branch. “I sat down on a number of occasions with them,” she says. “They had great resources for writing business plans and mentorship.” Neale also used her local Accion office. Accion is a global microfinance and microlending organization that also has a network community for importers and exporters.
Additionally, business owners will want to evaluate the current relationship between their domestic currency and foreign currency values. The value of currency can have a profound impact on one’s ability to turn a profit. By partnering with a trusted online foreign exchange provider that can offer valuable resources and guidance, business owners can devise strategies to help capture better rates. For example, subscribing to an email market rate alert can help business owners identify optimal times to send large amounts of money abroad.
When a business owner or prospective business owner stumbles upon great finds abroad, it’s tempting to leap into the next phase of rolling out the product at home. However, tempering this enthusiasm with solid market research can ensure that individuals enter into their new venture with eyes wide open.
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