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Frequently Asked Questions by New Exporters
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A Typical Day
in the Life of an Import-Export Entrepreneur
I work my global trading company out of an office in my home and have done so for a number of years now. On weekday mornings, my wife is up, dressed and out the door to her job before I even get up. It annoys her a little that I get to sleep in, work at home and still bring in more money than she does. I don’t care if you work for yourself or not, it’s important to have a schedule of some kind. Whether you get up at 7:30 or 8:30 is less important than the fact that you have some kind of daily schedule – and that you stick to it. This doesn’t mean your schedule has to revolve around work all the time. I spent 20+ years working a 9 to 5 job but when I left that and opened my own global trade business, I also took some time for myself. I built a small greenhouse where I grow orchids and roses, I took piano lessons and I even started working out at the gym. Sure, this all cuts into my time on the job but, in all honesty, I don’t think it cuts into my income. Most of my regular partners know when I’m here if they want to phone me (no, I don’t carry a cell phone around with me except for long absences) and they know I answer my email twice a day. After I return from the gym, check my orchids and practice my piano, I head up to the office. This is really my favorite time of day. I work as an export intermediary mostly and I also buy and sell imports on a smaller scale. Just like you, I receive lots of junk emails but it’s always exciting to find a promising query buried amid all the junk. If you’re planning to be an exporter, here’s an important thing I learned early on: know who you work for. Yes it’s true, an export management company working as an intermediary is dealing with both the U.S.-based manufacturer as well as the overseas buyer but, as far as I’m concerned, my bread is buttered by the manufacturer. He’s the man I work for. He’s the man I want to keep happy. On this morning, one of the manufacturers I represent is writing to tell me about delays in shipment of products overseas and domestically because severe summer storms have shut down production of one of their component products. This is important to know so I can advise my representatives in Italy and Australia. I’ve found that people everywhere can deal with problems and delays. What they can’t deal with is a lack of communication. One of my most important jobs is communicating with all parties, whether it's the buyer, the supplier, the banker, or the U.S. Customs office. I talk with everybody. Some would say too much. I would say you can’t communicate too much. I won’t tell you what I’m buying from Hong Kong but I will tell you that my supplier has just advised me that the first shipment will be coming by air. My customs broker who will be clearing this shipment through U.S. Customs probably already knows this information but I send him an email anyway, passing along the information. My buyer is one of the large chain stores at a nearby shopping mall. The woman I dealt with really liked the product but was a little nervous dealing with a small-timer like me for the first time. I anticipated this and I make it a point to – you guessed it – communicate every step of the way. I don’t want her getting nervous and bolting on me. No email for her. I pick up the phone and let her assistant know that the shipment is on the way. The assistant seems pretty sharp but I send a follow-up email to the buyer anyway just to make sure she knows what's going on and that I'm following it. You see, one of the things I’ve learned in this business is you’ve got to let your partners know you’re looking out for them. They’ve got to believe that you are concerned about their best interests and making sure they get what they want, whether it’s money or product. Today I’m also receiving an email from another of my business associates. He’s an importer who travels overseas to visit factories, get prices and help develop products. I’m the stay-at-home guy who organizes new products into databases for companies like Wal-Mart, Target and others. It’s not as exciting as doing everything myself but the money is good. I issue sales confirmation, send purchase orders to suppliers, get specifications from customers (such as carton markings, test requirements) and track orders. Most of this work can be done at home although every month or so I pop into the importer’s office for a meeting. Actually, this whole job of tracking shipments for buyers and sellers is so easy (now that I have a system set up) that I’m thinking of expanding this service to other importers – even in other countries. Here’s an email from my export assistance center (EAC) telling me about a trade conference taking place 50 miles from here. Sometimes these conferences are useful but I usually find that most of the attendees are people whose business is working with exporters and they spend their time drinking coffee and talking with each other. That must be why no one is at the export assistance center when I call them! The EAC wasn’t much interested in helping me when I started in the business about a decade ago. Now that I’ve got 4 real clients, though, they are much more helpful. The fact is, they’re nice people who have helped me gain access to and understand government export programs. For instance, they helped me advertise in Commercial News USA which resulted in some handsome trade deals and they also got my client’s products showcased at a trade show in South America while I was back here tending to my phalaenopsis orchids! The thing I’ve learned is that government export assistance programs are most helpful when you have some kind of agreement with your supplier. The other thing I learned is that the quality of these EACs varies depending upon your location in the country. Anyway, the EAC is now a real trade partner. He even wanted to show me off at one of these trade conferences to prove to people how much he helped me. I agreed but, like I said, most of the people I met were simply other government representatives, chamber of commerce reps or bankers. Still, I think the government programs are a good deal for the most part. Just don’t expect too much. Now when it comes to importing . . . that’s a whole different animal. The government wants you to sell your products to other countries so they have all kinds of programs to help you do that, like I said. They’re not as happy when you import products from other countries. That’s why they have tariffs you have to pay, restrictions, licenses, etc., etc. Don’t get me wrong. I’ve done okay importing but make sure you're prepared for certain special challenges. That’s one reason I have a customs broker to deal with a lot of that stuff. I used to do it myself. I learned a lot but it cost me too much time. Now I trade off money for the time I save doing other things... Like the piano lesson I have this afternoon. I’m really getting good at it. I think this year I’ll play at my Christmas party. There are some really big export management companies out there. I’m talking about EMCs that employ hundreds of people and have established foreign sales and warehousing subsidiaries. But there are lots of us who simply appoint export agents, representatives, and networks of exclusive distributors and dealers in each foreign market. These are my real trading partners. These are my extended family even though I’ve never even met most of them. The secret to success as an EMC is to be able to handle all details. That’s where the communication thing comes into play. My job is to worry about everything. I try not to let it keep me awake at night but I’m constantly checking on orders, shipment, payments, everything. If people call me wanting to know the status of shipment or payment or whatever, I pride myself on knowing that status. Your job isn’t over until everyone gets what he wants and you have a fat commission check in your bank. When I started in the business, I took any job that came along. Over time I learned it was smarter to specialize and to focus on larger orders. Why? Because I’m often working just as hard and sweating over just as many details in a $5,000 commission sale as I am with a much larger sale. My advice? Work to learn the business but after you know something, focus on the bigger paydays. Now don’t do this at the expense of ignoring your first partners. That isn’t nice, it isn’t right and, oh yeah, it could end up cutting into a future payday when the old partner decides to make a big trade down the road. Don’t forget your reps overseas. They’re your sales team. Make sure they have good sales material, good price lists and good communication. Nurture them the way you’d nurture a beautiful orchid and you will be amply rewarded. As I mentioned earlier, I operate mostly as an export intermediary working on commission. This is the way I started out in the business and I guess I’m old and cranky enough not to want to change. A lot of new traders wonder what kind of commission to charge. There’s really no one answer but I can tell you what I do. I always seek a commission that equals or exceeds the best domestic commission which can be about 10 per cent for consumer products and as high as 15 per cent for many industrial products. I mostly deal in fixed quantities but higher volumes usually means a smaller commission and I’ve been known to increase the commission for small quantities. Like I said, the work can still be the same. I didn’t do it when I started but nowadays I often ask (and receive!) a monthly retainer during the early stages of getting a new company started in exporting. Once things get going, I stop charging a retainer. At that point, the profits I can make from sales are greater than retainer costs and it’s a lot easier to get a check from the company when they’re making money too. Recently I’ve started doing some limited buying and selling in addition to my commission work. If I’m taking this risk, I make sure I receive the company’s best U.S. discount and an extra discount on top of it. Unfortunately, I still sometimes must mark up the final product higher than a U.S. distributor would to make the kind of profit I want. Checking my mail (I still have a post office box but most of my communication comes through the Internet now) takes most of my time in the morning. I also try to nurture new clients and check up on customers I haven’t heard from in a while. Communicate, communicate, communicate. I’ll be typing in some figures in my database this afternoon and I want to look over a catalog I received from an overseas supplier. I have a friend who sells products similar to these at a flea market on weekends and he might be willing to test some of these products at his booth. Once I discover what sells well and at what price points, I can approach shops and stores to see if they're interested. It’s just about time for lunch and today I'll be dining with a local manufacturer of some high tech medical products. He’s thinking of exporting his products and wants to know what’s involved. I don’t want to say for sure but I’m guessing that before dessert shows up I’ll have a new client. And that's why I love this business!
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Copyright 2005, Spyglass Point Productions PO Box 13141 Pensacola, FL 32591 U.S.A. (850) 438-5527 |
