What is Import Export Business

An import is a good or service brought into one country from another country as well as export; which is the process of taking product from one country to another country. The backbone of international trade is specially formed around the term import and export; because the act of international exchange of goods is a significant part of international trading. It is very necessary to balance the value of trading between importation and the amount of product leaving the country so that the host country will have a positive trade balance; else there will be negative balance of trade; which is a critical factor of economy growth and development.

There are two basic categories of import/export:

1. Industrial and consumer goods

Industrial goods are made up of machinery, manufacturing plants and materials, and any other good or component used by other industries or firms. Consumer goods are ready for the consumption and satisfaction of human wants, such as clothing or food.

2. Intermediate goods and services

Intermediate goods such as partly finished goods, are used as inputs in the production of other goods including final goods. A firm may make and then use intermediate goods, or make and then sell, or buy then use them.

The Main Objective of Import Export:

Companies import goods and services to supply to the domestic market at a cheaper price and better quality than competing goods manufactured in the domestic market. Companies import products that are not available in the local market to enable domestic surplus and encourage good economy growth.

There are three broad types of importers/exporters:

The categories of importers or exporters are based on their need and basic requirements such as highlighted below;

1. Looking for any product around the world to import and sell.

2. Looking for foreign sourcing to get their products at the cheapest price.

3. Using foreign sourcing as part of their global supply chain.

Amongst these categories there is an important factor to understand in the levels of import export business called as; Direct Importation.

Direct-import refers to a type of business importation involving a major retailer and an overseas manufacturer. A retailer typically purchases products designed by local companies that can be manufactured overseas. In a direct-import program, the retailer bypasses the local supplier; middle-man and buys the final product directly from the manufacturer, possibly saving in added cost data on the value of imports and their quantities often broken down by detailed lists of products are available in statistical collections on international trade published by the statistical services of intergovernmental organizations supranational statistical institutes such as Eurostat, and national statistical institutes.

The Benefits of Import Export Business

• Importation

If your business wants to extend profit margins, importing goods or raw materials is one potential path towards achieving this goal. Importing from offshore sources provides a host of benefits, including lower prices, higher quality goods, and the advantages associated with international trade agreements. Importation can help small and medium businesses develop and expand by reaching larger markets abroad, thereby increasing their market values.

• Exportation

Achieve your business goals by exporting products. Exporting products can be highly beneficial for businesses today as it can increase the profits of medium and large businesses by helping the exporter to satisfy the need in the external countries. This returns the exporter with foreign exchange opportunities and more.

Common Import Export Documents

These documents are based on the related countries and their individual requirements.

1. Commercial Invoice. A commercial invoice is a bill for the goods from the seller to the buyer.

2. Export Packing List.

3. Pro Forma Invoice.

4. Airway Bill.

5. Generic Certificate of Origin.

6. Dangerous Goods Certificate.

7. Insurance Certificate.

8. Shipper’s Letter of Instruction.

A healthy economy is one where both exports and imports are growing, since this typically indicates economic strength and a sustainable trade surplus or deficit. If exports fall sharply but imports surge, this may indicate that the domestic economy is faring better than overseas markets.

Example of Import Trade

The definition of import is to introduce or bring goods from one country to be sold in his/her country. An example of import is a trader bringing artwork from India to sell at Vietnam Market which is the trader’s home country market.

Example of Export

The definition of export is to discover goods in another country to be sold in another. An example of Export is going to another country to discover product scarcity such as for jewelry and produce or acquire this product from the trader’s country to send to the foreign market.

The future of import export business is one that will always continue to grow. The concept of supply chain which involves the process sourcing for the product and until it is delivered to the receiving market. This process in the recent years has integrated a good amount of technology advancement. We are experiencing the inflow of block chain technology in international trading and there are more of their kinds that will enable feasibility in import export industry. The major requirement is to be updated and close to the necessary information when and where it is available.