How To Do Import Export Business

How To Do Import Export Business

In general, Import is the process of buying or acquiring products from another company across the nation or another country, while export is
the action of selling our products and vice versa.
To enter this you have to go with the two processes

Process-1

In the first process, you have to register a company in five given options are-

• Proprietary company
• Partnership Company
• L.L.P company
• Private limited company
• OPC (One Person Company)

Proprietary is best for Beginners and OPC is for a single person company while Partnership, L.L.P, and Private Limited Company are for more than one person.
After register the company your next step is to open a Current Account after the Company name you registered then you need your basic documents such as IEC, RCMC, GST.

You can get IEC from the DGFT(Director General Foreign Trade) website, RCMC (Registration Cum Membership Certificate) from the FIEO (Federation of Indian Export Organisation) website at a fee of not more than 8000INR and GST certificate you will get from the GST council online which is free of cost.
Note:- Your RCMC will decide on the basis of your export type product.

There are other products which demand special certificate such as for food you need FSSAI certificate from FSSAI website, For Machinery, you need membership of EEPC (Engineering Export Promotional Council) and etc.

International Certificates Required

As you can see there are various certificates required in India for Exports/Import, If you are willing to Export other countries then you need also their certificates for approval on their terms and conditions.
For Example in India, we need FSSAI for food products but in

• U.S.A you must be approved by the FDA (U.S Food and Drug Administration of America)
• Europe you need GMP (Goods MAnufacturing PRactice)
• Gulf Countries you need Halal Certificate of Gulf
• The international level you need ISO (International Standard Organisation Certificate) 

Process-2 (Practical)

In Import/Export Business you have to do International Marketing. Actually, Marketing is the influence of the mental behavior of humans to buy your products/services with buyer's decisions.
In the first process, you make your documents IEC, EEPC, RCMC, GST ready but some other things you have to do such as make a Website of your Company, Visiting Card, Company Logo, etc which makes your profile in the market and without this no one takes you and your company seriously.

LC (Letter of Credit)

When we do business whether it's of manufacturing or service base, you have to buy or sell like in manufacturing you buy raw materials from other and sell your product to your customer While in service base, you buy products from other manufacturers or companies which you use your services for sell. In both cases you have to Buy or Sell, If you do that in across the country then you may not use this LC term but if your buyer or seller is from another country then we use "Letter Of Credit".
This is important because on both sides(from buyer or seller) there is a trust issue of them, so to solve that problem this term is introduced in which banks are the mediator for both countries of buyers and sellers so that there import/Export will be done easily.
So if you are going to import/export your product this term is the most important and without this, you are not able to do this at least from other countries.

Note- There are other modes of payment methods like "Cash in Advance", "Documentary collection", "Consignment", "Open Account" but "Letter Of  Credit" is a better option. 

Correctness of LC

• Name of the seller, Date, Amounts, Product Name, and Quality
• Slightly mistake in LC (e.g- Misspelling of seller's name or product name, late shipping charge) Bank will not pay 
• All parties in LC deal in documents & not on goods or services
• Payment will not depend on defects in goods and services

Advantages of LC

For Buyers	For Sellers
The certainty of goods to be received LC shows solvency for the buyer and allows the buyer to reduce or eliminate initial payment	Protection against buyer's payment default Reduced production risk in case of an order is  changed or canceled

How To Find Buyer

Now you think everything is ready like your products, documents, your profile. But where is the Buyer or demand of your products and how can you get the buyer, so there are also two processes which you can go for-


1.The Demand for your product countrywide

In this process, your product name or we can say the keyword we are going to find, which tells us the demand for your product, so follow the below steps to find the right place to sell your product.

Step-1 Go to Search Bar and type Google Adwords

Step 2- Click on the search result in red Circle

Step 3- Click on Sign in Button after you created your account in Adwords

Step-4 After sign in, click on "Tools And Setting" in Circle

Step 5- Click on Keyword Planner

Step 6- Type any keyword as we add "Footwear" you can see then click result below

Step 7- Now you can see the result which is of India as you can see above the circle and you can change it by clicking it

Step 8- After Click on the Location button, you can change the country as we changed India to Australia

Step 9- Now you can see the result of another country like Australia








2. Get Information Of Buyers

In order to find your buyer first, you need to do that to find your Product HS code, it is the unique code for every product you import/export.
Go to DGFT website where you can find a PDF file in which products and their HS codes are available, but here we gave you the link of website for finding HS Code click these links- Foreign Trade, Zuba.


After finding HS codes your next steps will become for you because in Import/Export you find it's a very open market, Example-You will get information about

• The Buyer
• Who is the Buyer
• Which item he is purchasing 
• Which port he is using
• At what price the item is exporting
• The quantity of the item

That means every detail of consignment is available in the market, And there is a cost you have to pay to get the above information but the cost to get data is low.
If you want to purchase footwear data for any port of 1 month so you can see the no. of customers are buying that product and you can target them for your business.

Advantages/Disadvantages of Import/Export

	Advantages	Disadvantages
Import	Get high-quality products in low prices Profit Margin will increase because of less price you  pay Access to goods and  services that the country is not able to or don't want to produce it -------------------	Unemployment will increase if  everyone is importing from other countries Local manufacturers will lose their  orders Return of bad quality and damaged products are difficult Importing reduces economic growth of the country --------------------------------
Export	The easiest way to get an  entry in the International  Market Lesser Invest of time  and money required when you want to set up manufacturing plants and  facilities in the host country Foreign investment risk is low  compared to other modes of  international business	High packaging, Transportation and Insurance cost Exporting is not a feasible option when import restriction exist  in a foreign country Location disadvantage

Data Graph Of Trade Export From India

Here are some Export Data graph of international Export according to Trading Economics Website
From India.

This is the export of Footwear from India, As you can see this is of 25 years graph and can easily understand that in the long term one can grow his company, picture source- https://tradingeconomics.com/india/exports-of-footwear 

This the second picture of Export Graph of  Pharmaceutical Products From India with 25 years and here is also you can see the J Curve, picture source- https://tradingeconomics.com/india/exports-of-pharmaceutical-products 

Here is an another example you can see, this is the Export of Iron and steel graph of 25 years. Picture Source- https://tradingeconomics.com/india/exports-of-iron-steel