Starting an import/export business is an attractive idea and one that has been successfully pursued by many, but while it may seem like a simple enough endeavour, there are many factors that should be taken into account. Consider your knowledge of the country you are considering doing business with, as well as their culture and language, whether or not you have a contact from the exporting country you can rely on, and the different business customs, laws and regulations governing where you want to import or export from.
For example if you are importing from China to Australia you will need to be familiar with both Chinese and Australian export laws and regulations. However, if you are undaunted by these factors, then the next step, after you have identified the suppliers you want to work with, is to start negotiating.
Face-to-Face versus Online or Telephone
If you have done your homework properly, you will have already met your supplier in person when you went to visit their factory or warehouse and inspect their products, back before you chose them to be your supplier. Once you have satisfied yourself that you want to work with them and import their goods to sell domestically, you must together decide on how to conduct the terms of trade.
Keep in mind that while doing business face to face is the most ideal situation, it is also the most expensive and tiring for you or your employees. These days, the Internet, via applications like Skype, offers the most economical and convenient way of interacting over long distances, although obviously time differences between the two countries must be taken in account.
If you are starting a relationship with a new supplier, you should negotiate an overseas contract that clearly lays out the expectations, requirements and responsibilities of both parties, including any sub-contractors that your supplier may use. The clearer the terms of the contract, the smoother your relationship will be, increasing the likelihood that this relationship will last and grow into a lucrative business opportunity for the both of you.
What to Include in an Overseas Contract
In your contract with an overseas supplier, it should specify the following things.
1) The goods that are being bought, including any legal or technical regulations that apply to those goods.
2) The price that you will pay for these goods, including the currency in which it must be paid and the exchange rate that will be used.
3) The payment method that will be used as well as a schedule for payment.
4) How the goods will be delivered to you and when.
5) Who will bear what risk under what conditions, as well as what measures will be taken to minimise risk for both you and your supplier.
6) The terms of trade, such as who will pay for shipping, duties and border formalities.
7) Quality control processes.
8) The level of service you expect from your supplier or what they are willing to provide you.
9) In whose legal jurisdiction will the contract be enforceable in case of a dispute?
Having a lawyer experienced in overseas contracts is essential, even if you have done this before.