How To Import Export without any knowledge?
Trust me you do not need to spent a thousand of your money in learning Import business from any institute. This article will cover all the steps required plus will give you some unsaturated methods to chose the suppliers.
Import Meaning :
I hope that you all know the Import Meaning ? Well in simple words, It is purchasing of goods and services out of your country and bringing them in your country by means of different kind of transport facilities.
It sounds very easy but sometimes it can be very complicated and risky as well. You need to be very careful while making the payment to your suppliers in the other countries. There is a full procedure to follow to be on a safer side, which will be discussed later in this article.
Import Meaning In Hindi :
विभिन्न प्रकार की परिवहन सुविधाओं के माध्यम से अपने देश के बाहर माल और सेवाओं की खरीद और उन्हें अपने देश में लाना। इसे आयात(Import) कहा जाता है।
I will be framing a step by step solution to follow on how to easily start an import Export without any prior knowledge of the same. The steps are as follow :
- How to get an Import Export Licence ?
- Market Research For Choosing A Product for Import Export.
- How to check if any extra Licence is needed for the custom clearance ?
- How to find the manufacturers and suppliers of the chosen product?
- How to bargain for the best prices ?
- What procedures to follow For making the payment abroad?
- Selecting the best custom clearance agent.
- Checking the Container after receiving at your facility.
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1) How To Get An Import Export Licence ?
For Starting an Import Export, IEC (Import Export Code) is a must requirement. It is a mandatory step and this licence is issued by the government of India. From Import To Export you will need this licence. Before applying for this licence, there are other things you need to get registered with as follow :
- Aadhar Card : It is a 12 digit Unique Identification number issued by the government of India. This number is a must for doing anything in India. This number is mandatory in getting benefits from any Government schemes in India.
- PAN Card (Permanent Account Number) : This is a must step to start any business in India. Its basically a one month process to obtain a PAN card. It is issued by the income Tax Department of India. You have to obtain an Individual PAN number for yourself and a PAN number for your company under which you will be carrying the import business.
- Current Bank Account : After obtaining the above two, you must open a current bank account. Current Bank Account is a mandatory step as well because you are going to make all the money transactions using this account only. Also ask them to provide a letter of memorandum for the Import Export.
- GSTIN : It is a 15 digit alpha-numeric PAN based Goods and Service Tax Identification Number. This will come in to the play when you will be selling the Imported goods in India. You also need this number for all the invoicing you will be doing in India. It will also help you to get Tax Credit which varies from product categories.
After Getting the Above four important registration we will be moving to get our IEC Number. Import Export Code is basically a 10 Digit number issued by DGFT (Director General Of Foreign Trade) Department of India. Here is a list of the documents required to apply IEC code online.
Now a days Government has made this process very simpler, which can be applied online Here.
2) Market Research For Choosing A Product for Import Export :
This is a very essential step in order to get success in this business. Because if you will not import a demanding product, all the hard work in making an import chain will go in vein. You can achieve the Best Business Ideas by following all the steps. You need to be very clear about the product you will be importing.
- Study the local demand of the market.
- Decide the market in which you want to enter and always Search from the bottom.
- Do not go with the people who are already importing a particular product in bulk.
- Become a Ghost and give your all the time in searching a reliable product as your profitability depends on this step only.
- Go in a super market and see what people are buying and check if it can be imported or not with a good amount of profit margin in it.
- Analyze the Market place websites like Amazon, Ebay, Alibaba, Etc as they will give you a fair idea on the trendy products.
Keep there Tips in your mind and search the product. Once you have a product you will proceed further.
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3) How To Check If Any Extra Licence Is Needed For The Custom Clearance in Import Export?
I don't think anyone will tell you about this very important step because i have faced this situation myself in my first Import. i faced this situation because there was no one to guide me about! I don't want you all to make the same mistakes i have made in the beginning.
Suppose you selected the product, imported it successfully and than you get a call from the custom department about an additional certificate required for that particular product. You all money will go in vein as the custom department will seize your container, on the top of it they will be charging you a hefty amount of Penalty. This penalty will disturb your all calculations and you wont be able to get any profit from this container. So this will be your Loss.
Always asks your exporters/suppliers who are sitting abroad to provide all the Lab Tests certificates they have in advance. Check all the certificates thoroughly.
From the last 2 Years, Indian Government has induced a mandatory BIS certification required in various imported goods. There is a Big Journal Printed on the products falling under BIS certification requirement.
The price for BIS certification is also very high at the moment. There are only a few labs performing this test as per the Government. But the government is thinking of reducing its testing price in future.
How to check the BIS requirement of a particular product ? Here is a Link of the website to check the same : Link
Else a very easy solution to check is to contact various Custom Clearance Agents, as they will check and let you know the same without any cost. I always opt this way only.
You must check with your supplier if they can provide you the BIS certification, else they can also bear the testing charges if you will give them a bulk order.
4) How To Find The Manufacturers And Suppliers Of The Chosen Product for Import Export?
Again this is the most mandatory step and I can bet that nobody will tell you their methods on How to find a supplier for the Import Export. I will here discuss my unsaturated method on How i trace the exact leads and prices they are giving to your competitors.
You must know that the each product entering in India must go through the custom clearance. This is the department which has all the data of the products importing in India with the original bill of landing. This includes The name of the suppliers company, the actual price on which the deal was made, the transportation cost till the port, time taken to the arrival. If you can have this data too, half of the battle can be won and you will be ready to fly for the success!
There are various websites who are selling this data of course by taking some money. Here is a list of a few Websites :
I have many more but these are very reliable in the data. Of course they will all bargain so do not forgot to Bargain! After all you are leaning the Import Export.
Do not forgot to say Thanks to me for providing this very unsaturated method of finding all the data you need to do the import Business. Because having all the above information will clearly make you stand on the top of the Importing business. And the chances will be very less that you will not get Succeeded.
5) How To Bargain For The Best Prices ?
There are two major terms used in Import Export Business :
- CIF and,
CIF : The full form is Cost Insurance And Freight. Lets take an example for better understating the term CIF. The suppliers will be quoting you, 1000 USD CIF Mumbai Port. In very simple words, this means in 1000 USD all the costs of the product, its transportation via sea, its insurance are covered up till Mumbai Port by your supplier. You do not need to pay any extra charge till your container is located on the port.
FOB : The full form is Free on Board. in this trade term, the supplier will drop the container till your selected cargo and he will not be responsible for the transportation charges as well as the insurance of the same. There is a basic formula to calculate the FOB charges :
FOB = Transportation up to Customs + Customs clearance + unloading charges + Loading Charges + Local Insurance
How to chose between these terms ?
In the beginning, many people chose CIF as this is very easy way to approach. You do not have to worry about the heavy load of the paper work,etc. Its is a tension free trade Term. But on the other hand it is not cost effective at all. As the supplier adds their commission too while quoting the prices from their forwarder to you.
Where as FOB is very cost effective as you are the in charge of the prices offered by your shipping forwarder. Also there is a better trace of the movement of the shipment in this trade term because you can get time to time update about the status directly from your forwarder.
Always keep in mind while trading in any trade term you are dealing with, there is always a scope of the bargain in importing goods. Always deals with the manufacturers directly without the involvement of any medium man in between. As the cost you will be saving here will be used in marketing your product. So think accordingly and Bargain till the last drop of the possibility.
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6) What Procedures To Follow For Making The Payment Abroad?
There basically two mostly used procedure terms in making payment abroad :
- LC and,
- TT Advance Payment
LC is basically a letter of credit. Which you can open with your domestic bank from which the payment will be made. It is basically an agreement which your domestic bank will made to your suppliers bank and will reserve the funds from your account and keep it with your bank. Your bank will release the funds to your Suppliers bank only when the certain conditions will meet. This is the safest way making the payment abroad for the import purpose. But most of the suppliers do not agree upon this term as this is a slow process.
TT Advance Payment is basically a telegraphic transfer or a wire transfer fully made in advance to the suppliers. Most of the suppliers demand for this mode of payment only. the reason is they get everything in advance. A large number of frauds are registered every year by using this mode of payment. So always be careful before advancing for this mode.
If your supplier is not getting ready for the LC, then the best way is to visit their promised abroad and verify the authenticity yourself before making any TT.
7) Selecting The Best Custom Clearance Agent :
There are a tons of clearance agents sitting in the market and there is a trust factor on whom to chose. The best practice is to find a connection person between you and your clearing agent in the beginning. You just can not trust any unknown and deposit the money in their account. And if even after searching a middle connection you are unable to find any, always go for the reputed clearing agencies.
If you have any difficulty in finding a reliable Custom Clearance Agent, feel free to shoot me up an email, i will be suggesting you the best in the market.
8) Checking The Container After Receiving At Your Facility :
After receiving the container at your facility, do not forgot to perform the following checks in order to avoid the fraud :
- First step will be checking the Seal. It is the most important step as the insurance will not be given to you if you will report a broken seal afterwards. If you find a broken seal always write the comment on the Bilty you will be giving back to the driver.
- While opening the container always make a full video of the same while checking the full container. As if something will be missing in the container, you will be providing a video proof to your supplier to get the things done in a right manner.
I have framed all the necessary steps as well as the precautions you will need to keep in mind while Importing the goods of your choice. I hope this article will help you to increase your Importing knowledge.
Please do not hesitate to write me back for any help or doubts if any. You can contact me by commenting below or Here.