John J. Capela

Article / Updated 07-10-2023

In a perfect world for your import/export business, you could select a product you’d like to deal in and identify a great supplier, and customers would fall over each other to do business with you. Unfortunately, the real world is far more complex and unpredictable. Doing business no longer involves just making and selling a product. Today, you must present your products to your customers through a comprehensive marketing program to get your imports or exports into the hands of your customers. Identifying your target market is the most important starting point for any business to consider. Your market is that particular group of people who have a need for your product as well as the authority, willingness, and desire to purchase the goods. As soon as you know who these people are, you can develop a marketing plan to reach them and appeal to their values so that they’ll see and like you and eventually purchase from you. A targeted plan minimizes the use of your resources in the marketing effort while getting the desired results. The primary objectives of market research are to assist you in identifying your target market and provide you with the competitive product information you need to know. Today, this information is readily available online, in libraries, and in various industry trade resources. All these resources can assist you in finding customers for the products you’ve chosen to import or export.

Cheat Sheet / Updated 03-01-2022

If you're thinking about starting an import/export business, do some research and ask yourself some key questions to see if a career in international trade is right for you. Make sure you're in agreement with the buyer or seller of goods about basic issues regarding your import/export business and stay current on trade rules and regulations in the countries that you're importing from or exporting to.

Article / Updated 03-26-2016

Whether you're importing or exporting goods, business agreements need to exist between the person you're buying from or selling to, and the following key points need to be included in those agreements: The products: You need to be clear about their exact specifications so that you know what you're getting. Sales targets: This includes things like order quantities and the frequency of shipments. Territory: In which territory may the distributor sell? Will the distributor have exclusivity there? Prices: What are the prices of the products and the allowable markups? Payment terms: Will you use letter of credit, sight draft, open account, 30 days, consignment, and so on? Shipping terms: Will your terms be free on board (FOB) airport; free alongside ship (FAS); cost and freight (C&F); cost, insurance, and freight (CIF); and so on? The level of effort required of the importers: How hard does the importer have to work to sell the products, including minimum order commitments and long-term commitments? Sales promotion and advertising: Who will do it, who will pay for it, and how much will be invested? Warranties and service: How will defective or unsold products be handled? Order lead time and price increases: Lead time is the time required to ship the product to the company purchasing the product. When negotiating with the supplier, you need to be clear on who's responsible for any increases in material or transportation from the time the order is placed and the time it's actually available for shipment. Trademarks, copyrights, and patents: Who will register, and in whose name will it be in? Provision for termination of the agreement: Under what circumstances can the agreement be dissolved? Provision for settlement of disputes: If a product is defective or there is a misunderstanding about some aspect of the purchase or sales agreement, what process will be used to resolve disagreements?

Article / Updated 03-26-2016

When you're in the import/export business, you need to realize that the process of global negotiations differs from culture to culture in many significant ways. You have to take into account communications issues such as language, gestures, facial expressions. And you also have to consider differing negotiating styles and problem-solving techniques. Language: In spoken and written communication, using the wrong words or incorrect grammar is just one concern. The meaning of the message often depends on the set of circumstances surrounding those words. The danger of misinterpretation of messages requires an understanding of these various contextual factors. Non-verbal communication: Unspoken language is just as important as words or writings. Differences in customs and cultures can cause misinterpretations. You need to be aware of the meanings of gestures, facial expressions, posture, appearance and dress, conversational distance, touch, and eye contact. Time influences and the pace of negotiations: Some cultures like the Americans or Germans are very fast-paced and punctual, while there are many other regions (such as Asia and Latin America) where time is not of the essence. Individualism vs. collectivism: In some societies, people primarily take care of only themselves and their families, while in other societies, the good of the entire group is put ahead of one's individual needs. Understanding these belief systems will affect how you negotiate. Role orderliness and conformity: Some cultures are characterized by a high need for order and conformity. These countries place a great deal of importance on how things are done. Formalities aid in successful negotiations. On the other hand, negotiators from the United States, Canada, Germany, and Switzerland place more emphasis on content than of procedures. Uncertainty orientation: This term refers to the degree people are uncomfortable with ambiguity and a reluctance to take risks. People in countries like Spain, Belgium, Argentina, and Japan tend to proceed cautiously following rules, laws, and regulations. On the other hand, people in countries such as the United States tend to feel comfortable in unstructured situations, are more ready accept change, and attempt to have as few rules as possible.

Article / Updated 03-26-2016

If you're considering entering the world of global trade by starting your own import/export business, ask yourself these important questions to see if ready to commit your time and money to the venture: Why are you thinking of starting a business, and what makes you think you'll be successful? How much money will you invest and how much will you earn? Will you be starting part time or full time? Do you plan to import, export, or both? Will you work as an agent or a merchant? What will be your company name and form of organization? Where will your base of operations be? Where will you locate your office? What will be your business telephone number, mailing address, and fax number? What type of products will you choose to deal in? Who will be your suppliers? What companies will you deal with? In what countries? Who will be the consumers/users and buyers of your products? How will you handle distribution? Set prices? Promote yourself and your products? Which method(s) of international payment will you use? Which means of international transportation and insurance will you use? Which shipping terms? Who will be your bank? Your insurance company? Your Customs broker? Your freight forwarder? Which U.S. and foreign government regulations will you be concerned with? What sources of information and assistance are available as you begin and as your business grows?

Article / Updated 03-26-2016

Import and export laws differ from one country to the next. Make sure you know the laws regarding international trade wherever you're doing import/export business. Watch out for these common legal pitfalls: Regulations and restrictions: Be aware of how your transactions may be affected by the import/export laws in the United States or in the foreign country involved. Agents, distributors, and representatives: Know the laws that govern their retention and, equally important, their termination. Shipping: Avoid misunderstandings over shipping. Shipping arrangements must be written and spelled out in detail. Dispute resolution: Make sure that any contract designates how and where differences will be resolved.

Article / Updated 03-26-2016

Import/Export Kit For Dummies includes all kinds of useful documents and forms. Just go to the Import/Export Kit For Dummies accompaniment site, click the Downloads tab, and click on the files that you would like to download. Useful documents These documents should be helpful as you set up and run your import/export business: Distributor and Agency Agreement Outlines: This document provides two outlines — one for distributors and another for agents — that you can use in your discussions with other companies. General Business Plan Outline: This document gives you a template for developing your business plan. Glossary: Key terms you need to know in the import/export business. International Trade Commission Offices: A listing of trade commission offices around the world. Government forms Here are all of the government forms you can download from the book’s web page: CBP Form 17: ATPA Declaration CBP Form 19: Protest CBP Form 26: Report of Diversion CBP Form 28: Request for Information CBP Form I-68: Canadian Border Boat Landing (Permit Sample) CBP Form I-95: Crewman’s Landing Permit CBP/ATC Form 101, Event Application DHS Form I-193, Application for Waiver of Passport and/or Visa CBP Form 214: Application for Foreign-Trade Zone Admission and/or Status Designation CBP Form 214A: Application for Foreign-Trade Zone Admission and/or Status Designation CBP Form 214B: Application for Foreign-Trade Zone Admission and/or Status Designation Continuation Sheet CBP Form 214C: Application for Foreign-Trade Zone Admission and/or Status Designation Continuation Sheet CBP Form 216: Application for Foreign-Trade Zone Activity Permit CBP Form 226: Record of Vessel Foreign Repair or Equipment Purchase CBP Form 243: CCFR Event Application CBP Form 247: Cost Submission CBP Form 255: Declaration of Unaccompanied Articles CBP Form 262: Request for Printed Material CBP Form 300: Bonded Warehouse Proprietor’s Submission CBP Form 301: Customs Bond CBP Form 301A: Addendum to CBP Form 301 CBP Form 306: Sensitive Security Information (SSI) Document Receipt CBP Form 339A: Annual User Fee Decal Request – Aircraft CBP Form 339C: Vehicle Application CBP Form 339U: Update Transponder Information CBP Form 339V: Annual User Fee Decal Request – Vessel CBP Form 349: Harbor Maintenance Fee Quarterly Summary Report CBP Form 350: Harbor Maintenance Fee Amended Quarterly Summary Report CBP Form 400: ACH Application CBP Form 401: Automated Clearinghouse Credit Enrollment CBP Form I-408: Application to Pay Off or Discharge Alien Crewman CBP Form I-418: Passenger List – Crew List CBP Form 434: North American Free Trade Agreement Certificate of Origin CBP Form 434A: North American Free Trade Agreement Certificate of Origin Continuation Sheet CBP Form 442: Application for Exemption from Special Landing Requirements CBP Form 442A: OVERFLIGHT Pilot/Crewmember Personal Information Release CBP Form 446: NAFTA Verification of Origin Questionnaire CBP Form 449: Certificate of Origin - ATPDEA CBP Form 450: United States-Caribbean Basin Trade Partnership Act (CBTPA) Certificate of Origin CBP Form I-510: Guarantee of Payment DHS Form 590, Authorization to Release Information to Another Person CBP Form I-736: Guam-CNMI Visa Waiver Information CBP Form I-736 Guam-CNMI Visa Waiver Information – Korean CBP Form I-736 Guam-CNMI Visa Waiver Information – Japanese CBP Form I-736 Guam-CNMI Visa Waiver Information – Simplified Chinese CBP Form I-736 Guam-CNMI Visa Waiver Information – Traditional Chinese CBP Form I-760: Guam Visa Waiver Agreement CBP Form I-775: Visa Waiver Carrier Agreement CBP Form 823F: FAST Commercial Driver Application – Mexico CBP Form 823S: SENTRI Application CBP Form 1300: Vessel Entrance or Clearance Statement CBP Form 1302: Inward Cargo Declaration CBP Form 1302A: Cargo Declaration – Outward with Commercial Forms CBP Form 1303: Ship’s Stores Declaration CBP Form 1304: Crew’s Effects Declaration CBP Form 1400: Record of Vessels Engaged in Foreign Trade Entered or Arrived Under Permit to Proceed CBP Form 1401: Record of Vessels Engaged in Foreign Trade Cleared or Granted Permit to Proceed CBP Form 3078: Application for Identification Card CBP Form 3124: Application for Customs Broker License CBP Form 3124E: Application for Customs Broker License Exam CBP Form 3171: Application-Permit-Special License Unlading-Lading-Overtime Services CBP Form 3173: Application for Extension of Bond for Temporary Importation CBP Form 3227: Certificate of Disposition of Imported Merchandise CBP Form 3229: Certificate of Origin CBP Form 3299: Declaration for Free Entry of Unaccompanied Articles CBP Form 3311: Declaration for Free Entry of Returned American Products CBP Form 3347: Declaration of Owner: For Merchandise Obtained in Pursuance of a Purchase or Agreement to Purchase CBP Form 3347a: Declaration of Consignee When Entry Is Made by an Agent CBP Form 3461: Entry/Immediate Delivery CBP Form 3485: Lien Notice CBP Form 3495: Application for Exportation of Articles under Special Bond CBP Form 3499: Application and Approval to Manipulate, Examine, Sample, or Transfer Goods CBP Form 4315: Application for Allowance in Duties CBP Form 4455: Certificate of Registration CBP Form 4457: Certificate of Registration for Personal Effects Taken Abroad CBP Form 4609: Petition for Remission or Mitigation of Forfeitures and Penalties Incurred CBP Form 4630: Petition for Relief from Forfeiture CBP Form 4632: Lien Holder Financial Statement CBP Form 4811: Special Address Notification CBP Form 5106: Importer ID Input Record CBP Form 5125: Application for Withdrawal of Bonded Stores for Fishing Vessel and Certificate of Use CBP Form 5129: Crew Member’s Declaration and Instructions CBP Form 5297: Power of Attorney CBP Form 6043: Delivery Ticket CBP Form 6478: Application for CBP Approved Gaugers and Accredited Laboratories CBP Form 7501: Instructions CBP Form 7501: Entry Summary with Continuation Sheets CBP Form 7507: General Declaration Agriculture, Customs, Immigration and Public Health CBP Form 7509: Air Cargo Manifest CBP Form 7512: Transportation Entry and Manifest of Goods Subject to CBP Inspection and Permit CBP Form 7512A: Transportation Entry and Manifest of Goods Subject to CBP Inspection and Permit CBP Form 7514: Drawback Notice (Lading/FTZ Transfer) CBP Form 7523: Entry and Manifest of Merchandise Free of Duty, Carrier’s Certificate and Release CBP Form 7533: Inward Cargo Manifest for Vessel under Five Tons, Ferry, Train, Car, Vehicle, etc. CBP Form 7551: Drawback Entry CBP Form 7551 Instructions CBP Form 7552: Delivery Certificate for Purposes of Drawback CBP Form 7552 Instructions CBP Form 7553: Notice of Intent to Export, Destroy or Return Merchandise for Purposes of Drawback CBP Form 7553 Instructions I-94: Arrival/Departure Record I-94W: Visa Waiver Arrival/Departure Record Commercial Gauger and/or Laboratory Agreement Canadian Customs Invoice Certification of Origin Sample Form e370 Application to Transact Bonded Carrier and Forwarding Operations (Canada) Harmonized Tariff Schedule Statement of Origin Sample Forms — Australia (4)

Article / Updated 03-26-2016

In the past, opportunities for many small import/export businesses and entrepreneurs ended within the borders of their own country, and international trade was only for large multinational corporations. The Internet, changes in technology, and increased access to affordable information have made it easier for firms of all sizes to engage in international trade. As you pursue these opportunities, you need to understand the major mistakes to avoid. Here’s what you need to do well to be a successful importer or exporter in the United States: Decide how to best set up your business and whether to act as an agent or merchant Evaluate import or export opportunities Become aware of all applicable rules and regulations Select the product(s) to deal in Find suppliers for the goods you’ve chosen to import into or export from the U.S. Identify target markets and find customers Understand all the elements that are going to be part of any purchase or sales agreement Develop an understanding that individuals from other countries have different customs and approaches, so negotiations can be difficult and require a great deal of patience Learn about the different terms of sales and methods of payments that are common in international transactions Become aware of all packing, shipping, and documentary requirements Combined with some hard work, the availability of this information will get you well on your way to starting a successful import/export business.

Article / Updated 03-26-2016

The single most important document in an import or export transaction is the purchase agreement. With a suitable purchase agreement, you can eliminate or greatly reduce most of the problems that might occur. The terms of sale upon which the seller and buyer must agree include the passage of title, risk of loss, price, and payment. The terms of sale are conditions regarding who will be responsible for which expenses as the goods move from buyer to seller. In a domestic sales transaction, the buyer may be used to purchasing on open account or receiving credit. But in international purchases, it’s customary to use methods of payment designed to give the exporter and importer a greater level of protection. If you’re an exporter dealing with a small importer who’s essentially unknown to you — a company with whom you have no prior payment experience — you’ll likely seek some secured method of payment. On the other hand, if you’re an importer, a payment term that offers assurances that the goods received are exactly as ordered and in good condition is critical. International terms of sale can differ from those used in domestic transactions, so become familiar with Incoterms, the universal trade terminology developed by the International Chamber of Commerce. If you’re an importer, then to avoid potential problems in the clearance of your merchandise, familiarize yourself with U.S. Customs policies and procedures prior to actually importing your goods. Also be aware of any entry requirements specific to the particular commodity you’re importing, including those of other federal agencies.

Article / Updated 03-26-2016

Your potential customers can choose from an overwhelming variety of products by assessing the value each product can deliver. Your business exists to satisfy your customers while making you a profit, so selecting the right product and identifying the best supplier are critical to the success of your business. The number of products that you can import into or export from the United States seems infinite, so how do you choose? Research shows that the key issue in your initial product selection is finding a niche or an area of specialization. The more focused you are in your initial presentations, the better your chances of communicating clearly with your customers and making the sale. When making that selection, rely on your knowledge and experiences. The more you know about a product, the greater the chances that you’ll be successful, so don’t be afraid to ask questions and learn as much as you can about the product. Finally, make sure you choose a product you personally believe in. Note that gaining access to major branded products is almost impossible because the company more than likely already has an extensive network of exclusive distributors. Beware of counterfeits. After you choose the product category, the next task is to identify the suppliers. If exporting, you focus your efforts on finding suppliers in the United States; if importing, you look for suppliers from other countries. The task of finding suppliers today has been simplified; you can accomplish it through the Internet and business-to-business platforms such as www.thomasnet.com and www.wand.com (for U.S. suppliers) or www.alibaba.com and www.globalsources.com (for overseas suppliers). This process of finding a good supplier requires a great deal of patience. One of the more frustrating aspects of searching for suppliers is spending a lot of time to locating a supplier, only to be rejected or have them not respond to any of your requests. Be persistent.