The process to start an import business can be very easy and fairly inexpensive. This blog post will discuss how you can start an import business and how bonds and custom brokers can play a role in your business.
Determine the Type of Import/Export Business You Wish to Open
There are three different kinds of import/export businesses. An export management company is a kind of import/export company that works with domestic companies that want to export and sell their products abroad, but don’t know how. Among other responsibilities, export management companies hire dealers and advertise and market the good the domestic company wished to sell abroad. Export management companies generally specialize in a certain good, foreign market or both. Another kind of import/export business is the export trading company. Export trading companies see demand in foreign markets and then search for domestic companies and services to meet that demand. Export trading companies generally do not specialize on markets or in niches like an export management company. Export trading companies seek out domestic companies that are willing to see good abroad and then helps them fill the need of the market. The last kind of import/export business is the import/export merchant. Import/export merchants are free agents that abstain from specialization in terms of clients, markets and goods. Import/export merchants buy goods directly from foreign and domestic companies and manufacturers. They then pack, ship and resell the good independently and assume all risks and receive all the profits from the sale of the goods.
Find a Target Market and Niche for Your Import Business
If you have a background in something, say textiles, this can be advantageous if you are looking to start an import business. If you know a lot about something, it can help you find your target niche and markets that are receptive to the product you are importing and exporting. You’ll need to find the people that want to buy textiles and try to get them to buy the textiles regardless of where they are in the world. In the modern day era of globalization, it is easy to get goods around and it is significantly easier to find the people that want to buy them.
Knowing a field and feeling comfortable there can be a great first step in getting your business of the ground and it can help you learn the basics of importing in a context that is already familiar to you. It may also be easier to acquire business if you know the jargon of the industry and can speak in the same speech code as them. Once you have your foot in the door with an industry you know, it can be much easier to build a client base that is more diverse.
What is a Customs Broker and How Can They Help Your Business?
If you do start an import business you might want to hire a customs broker. A customs broker is a private person, entity, partnership, association or corporation that is licensed and regulation by the United States Department of Homeland Security under the U.S. Customs and Border Protection. Custom brokers help importers and exporters navigate federal standards and requirements pertaining to the importing and exporting of certain goods, in certain ports. According to the U.S. Customs and Border Protection Agency, custom brokers must have expertise in the entry procedures of ports, the admission requirements, classification of goods, valuation of goods and the going rates of duties and taxes to the relevant imported merchandise.
To be eligible to become a customs broker, you need to be a United States citizen over the age of 21 who is not currently working for the federal government. Customs requires that you posses a “good moral character”, that you pass the Custom Broker License Exam, submit the Custom Broker License Application and that the application be approved by the Department of Homeland Security.
Law does not require the use of a customs broker for an import business but customs brokers are the only persons who are authorized by Customs and Border Protection to act as agents for importers. Customs brokers can also be useful to your importing business because of their knowledge of federal legislation and regulations. Custom brokers prices can vary, but they usually determine the fee for their services based on the total value of the goods being imported. However, in some cases the broker and client will decide upon a fee beforehand.
The Role of Bonds in Importing and Exporting
The United States Customs Department requires that within 15 days that a shipment is set to arrive in port, certain documents need to be filed with the port director. These documents include the entry manifest, the evidence of the right to make entry, commercial invoice and a packing list, if required. Accompanying these forms needs to be some form of security. This can come in the form of a cash deposit, in US dollars. Or, it can come in the form of a surety bond. The purpose of this bond is to ensure that the federal government is paid all due duties, taxes and charges applicable. Security, in the form of a bond, is required if you import goods in to the US worth more than $2,500 or if the goods are subject to other government agencies’ requirements. If you are an importer and you use a customs broker, the broker’s bond can help and secure the goods you are importing.
There are two different options for imports and import businesses to get bonded. They can either chose between the “single entry” bond or the “continuous bond”. The single choice bond needs to be obtained every time you import something, whereas the continuous bond is valid for a set period of time. If you occasionally import things, then the single entry bond may serve your needs better. If you import often and in many different ports, it is likely that the continuous bond will better serve your bonding needs. You can apply for your bond to start an import business by clicking here.