How to Start an Export Business

August 18, 2009 13 Comments

Export Business is a very promising business in India. This is because a large number of products manufactured in India are in huge demand abroad. However, most manufacturers are not aware of this. You can step in to help manufacturers get overseas market accessibility and at the same time get yourself established.

Types of Import/Export Businesses
If you have to start an export business, you can have two options available before you. One is to start an export management company and the other is to start an export trading company. If you start an export management company your duty will be to sell the products of a domestic company overseas. You have to take care of hiring distributors, dealers, and representatives; advertising, marking and packaging; shipping; and at times financing. If you start an export trading company (ETC) your job will entail foreign buyers looking for something and then finding domestic sources willing to export.

How to Start Your Export Business?
In order to start your export business you need to carry out market research. This is a very important aspect of export business. Your market research tasks should include the following:

  • The product or service you plan to sell
  • Your aimed end-user or whether your niche group is mass-market consumer, light industry, heavy industry, government, medical or hospital use, business or professional
  • The countries you plan to export
  • The trade channel you plan to use i.e. through direct sales, distributors, representative, or commission representative.

How to Set up an Export Office?
Your export office location should be in a place where business houses can have easy access. It can be at an industrial zone or in a busy market. When you start new you need to have the following in your office:

  • Computer system with modem and printer
  • Fax machine
  • Internet/e-mail service
  • Export software
  • Phone
  • Voice mail or answering machine
  • Stationery and office supplies
  • Access to market research or trade leads

How to Promote Exports on Your Own Initiative?
A large section of good domestic products never get exported because manufacturers do not think along these lines.

It is your duty to convince manufacturers about exporting. Before you get in touch with manufacturers you need to consider the following:

  • Identify hot sellers in the domestic market? Zero in on products you know well or have huge demand in the market.
  • Find out if the products are hot sellers in your target countries
  • If not, do the products have the potential to become hot sellers?
  • Locate the manufacturers
  • Identify the competing brands
  • Calculate the selling price the products domestically and in your target countries

How to Approach Manufacturers?
After you identify a product you need to get in touch with the manufacturer. Write a letter addressing the following points.

  • Introduce yourself and your company
  • Highlight the potential of the overseas market of his product
  • Explain in details how your company, out of all others, is best placed to market it overseas.
  • If you already have contacts with foreign distributors, show manufacturers the clear cut way

How to Write Export Business Plan?
An export business plan in other words is your marketing plan which you plan to sell to manufacturers. The following elements must be included in your plan:

Which country will you or your representatives sell? Explain the viability of the market by providing research information in a clear and easy-to-digest format. Represent it with graphs, charts, and facts, figures and text.

Give your annual sales forecast. Show how much the manufacturer can expect.

Open Export Business – The Export Path
Once you find an importer for your goods you need to go about in the following way:

  • Give the importer a quote on your merchandise; if necessary you must negotiate
  • Procure the letter of credit from your bank.
  • Meet the terms of the letter of credit. This usually includes merchandise manufactured if necessary; taking care   of shipping and insurance arrangements; complete packing and transportation.
  • Receive shipping documents
  • Present shipping documents to your bank

13 Comments »

  • A D said:

    Hello,
    I am returning to US with a BSc in Economics. I wanted to start a small scale manufacturing business in and around MA with a lot of future and global growth. I was looking into exporting fish,or textile or maybe something to do with rural development, since I know that the government is taking much initiatives about the rural areas. My capital investment is about medium.
    Any suggestions or help for your end will be highly appreciated.

    Thank you..

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  • S F said:

    Hello, I have an export company (registered with govt). I am very much ready to import mobile phones, if you r interested please write to me on sfarooqi78@yahoo.co.in, we had already being importing some computer peripherals from UK….

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  • AB said:

    Initial step for starting an export business is to get an import export code number which you can obtain from the nearest regional joint director general of foreign trade, for any queries you can ask question.
    Thank you.

    Reply This Comment

    SD Reply:

    Hello sir,
    I am an individual. Do not have a registered business. Can I export to UK? I am going to export it to my friend who will pass the goods on to the buyers, so I don’t think I’d be able to have things like LC and all that? What do you advise, what all do I need to get going? Transport will be by sea and I’m going to send by container loads, large quantities. If you could, please reply as i’m not sure if I’d receive an alert to the reply.
    Many Thanks.

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    Scott Wilson Reply:

    SD,
    If the party that you are going to export to is known to you and you have good relations with them, you can export easily by just taking export permission from the authorities. You don’t need LC in this case if you are familiar to the party you are exporting to. Just a small advise, kindly insure your consignment before exporting.
    Thank you.

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  • MN said:

    Hello Sir,
    I have owned my commercial 900 sq feet frontage shop on the heart of the city so I wanted an import/export office, store, consultancy or any office which is going to give an rent/lease basis.
    Thank you.

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  • RK said:

    I am going to start an import business of furniture from russia. My friend is there in Russia and I am in India. In fact I want to be just a mediator between my friend in Russia and dealers here. I would find suitable dealers for the furniture here, once they pay amount in advance I will book an order with my friend and the goods will arrive.

    for this kind of business, what permissions, requirements infact simply to say what all are required by me. I have not registered any company on my name.
    Thank you.

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    Scott Wilson Reply:

    RK,
    In this case, you need to register your business as an import house. If you don’t want to register, your clients should be registered as export import house. Otherwise, you must register yourself as an importer under ECGC and EPCI.
    Thank you.

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  • VG said:

    Hi,
    I am in the USA (originnaly from India) and have a friend here who’s from Caribbean. We are planning to set up a company to export/import goods between India and South America/Central America. Where’s the best place to register the company between these 3 countries. I would appreciate any help.
    Thank you,
    VJ

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    Scott Wilson Reply:

    VG,
    It depends on from which country you want to export and to which country. If your business is to buy and sell goods from all these countries, then register the company where norms are easy and favorable to you.
    Thank you.

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  • RS said:

    Hi

    I have gone through the information available in special post HOW TO START THE EXPORT BUSINESS. I am also interested to start export business. But in your post you did not give the reply of common question as follows :
    1) As a new person in this market , how can we know what is the great demand of different products which manufacture India in different countries. This is the first step to select the product and manufacture. So we should have a list of product those are in great demand and the tentative selling price world wide or some consultants / agencies are available in India to help out in this regrade. Then we can work out the feasibility and select the product and manufacture.

    Please advise .
    Thank you.

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  • G J said:

    Hello, I am running my own business of intl freight Forwarding and chustom clearance, activity. I need to increase the client base but the good one. None of the big company is entertaining me. I I have no contact.. Though I am very good to import from
    singapore and taiwan. MY overheads are going up, and its uncontrollable .

    Please advise what to do, Its very difficult to get marking person also.
    Thank you…

    Reply This Comment

  • piyush batra said:

    Hello its Piyush Batra here from India. I need help by some professionals in import export business. I want to start up new import and export business in Indi. I don’t have much knowledge of how to start and take things forward.

    I need some professional guidance from first step, like…
    • What can I do in my first step.
    • How to register license and other documentation
    • All other procedures for start up new business.

    Please contact me any time as soon as possible. I will be very thankful to you. In-case if you are from Delhi I can meet you.

    Reply This Comment

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