Getting Started With Your Importing Business
When it comes to running a successful wholesale distribution business, there is immense planning, organization and relationship management required, but there's no need to panic. It can all be done seamlessly by taking the right steps from the beginning.
So, before embarking on your wholesale business journey, here are some helpful tips to consider.
1) Identify your “Why” for importing
The process of importing wholesale goods requires ample attention and dedication to logistics and is not always the easiest experience. It is important to clearly identify early on what the key benefit is for your importing business, rather than to source domestically.
Consider the following three benefits for your wholesale distribution business:
- Cost savings & expanded revenue
Imported goods from other countries can be much cheaper than domestic products.
- Better quality product
Every country has different strengths for export and almost always, it’s best to go straight to the source.
- Introduce new products
Providing customers something unique to its target market is how a company can stand apart from competition.
Also consider, what is your role in the supply chain? When you choose to import, reducing the number of middlemen in the process is a primary goal for many as it reduces intermediary costs.
2) Who is your customer?
Gaining ideal customer insights will also support your efforts in building positive and enduring relationships with customers. The more you understand your customers, the more likely you are able to fulfill their needs.
By addressing your customers’ needs and meeting their expectations, you can develop business relationships that contribute long-lasting value for your wholesale business. When you’re starting up, don’t be tempted to over-promise (ex. their shipment will be delivered the day after the shipment arrives).
The better way to go is to always underpromise and overdeliver.
This gives your business the opportunity to exceed customer expectations which increases the likelihood of repeat business (ex. let them know their shipment will arrive a few days after the projected shipment arrival date, to manage expectations in case anything goes awry).
Ultimately, your efforts to develop positive relationships can create repeat customers that provide you a steady revenue stream. Having repeat customers means you spend more time focused on importing, rather than constant business development for one-off clients.
3) Securing consistent and reliable suppliers
The nature of the importing business has many hand-off points and in turn, many potential points of breakage in your supply chain. Perhaps the most important point in your supply chain is your wholesale supplier, distributor or manufacturer.
While seeking a supplier, take time to research various options to ensure they are reputable and reliable to deliver on-time. You ideally want to build a long-lasting relationship that can reap benefits overtime and familiarity (oftentimes repeat customers are given better rates from manufacturers once credit is established). Don’t hesitate to ask questions and compare quotes from various suppliers.
Getting started on your supplier search? We have a free database of wholesale suppliers, distributors and manufacturers to help jumpstart your efforts!
4) Managing your cash flow
While it seems fairly straightforward that to make money, you have to spend money, there will be times where you find that your cash is tied up in inventory in your warehouse or pending as in accounts receivable (money owed to you by a customer). This adds a layer of complication when it comes to forecasting cash flow and purchasing your next shipment.
Cashflow is a delicate balancing act that could make or break a business. For this reason, it’s important to always have a thorough understanding of your business financial position.
Often, to complete a shipment process, trade financing is required. Trade financing includes purchase order loans, foreign exchange, duties and tariffs along with insurance. These services are typically found at various financial institutions, credit unions or alternative loaners. Be sure to shop around to ensure you’re getting the best rate to maximize your business margins. One bad rate could mean breaking even, making a profile or taking a loss.
Trade financing can be a confusing landscape with endless options, but at Moselle we’re happy to help!