Building an Import / Export Business

Acknowledgments xi

Introduction 1

1 Your Big Idea: Is It Any Good? 5

Importing Handicrafts from Ecuador 5

Exporting Hardware 6

Importing “World Clocks” 7

Exporting Printer Paper 10

Brokering Computer Equipment 12

Sources of Information and Help 12

2 Is This Business for You? 14

Have You Failed Yet? 14

How Is Your Financial Situation? 15

Interest in and Knowledge of the World 15

Familiarity with Foreign Cultures and Languages 16

Persistence, Patience, and Judgment 17

Attention to Detail 18

Contacts with Buyers or the Ability to Make Them 19

Twenty Important Questions 19

Import Merchant Example 26

Export Agent Example 27

Sources of Information and Help 28

3 Setting Up Your Business 30

Forms of Organization 30

Your Trade Name and Logo 34

Opening a Bank Account 36

Setting Up Your Office 37

Stationery and Printing Needs 38

Accounting and Taxation 39

Obtaining Financing 41

Sources of Information and Help 43

4 Beginning with a Buyer 45

Why Someone Would Buy from You 45

What Value Means to Your Customers 46

Attracting Customers—Some Examples 47

Finding Buyers as an Importer 49

Finding Buyers as an Exporter 50

Sources of Information and Help 54

5 Choosing Products and Suppliers 56

Finding Products to Import 56

Getting Product Samples 60

Testing Products in the U.S. Market 61

Finding Foreign Suppliers 63

Finding Products to Export 68

Lining Up Suppliers 73

The Formal Supply Agreement 75

Protecting Your Interest 80

Sources of Information and Help 81

6 Marketing in the United States and Abroad 86

What Is Marketing? 86

Marketing Imports 87

Marketing Exports 100

Sources of Information and Help 104

7 Money Matters 108

Credit Decisions on Suppliers and Customers 109

Methods of Payment in International Trade 112

Export Credit and Credit Insurance 124

Foreign Currency Transactions 126

Countertrade 128

Sources of Information and Help 130

8 Packing, Shipping, and Insurance 133

Packing for International Shipment 134

International Transportation 141

Shipping Terms 150

Marine Insurance 153

Brokers and Forwarders 155

Sources of Information and Help 160

9 Oh,Those Lovely Documents Contents 164

Commercial Documents 165

Banking Documents 173

Transportation and Insurance Documents 176

Government Formalities Documents 182

A Few More Thoughts on Documents 187

Sources of Information and Help 188

10 The Regulation of Foreign Trade 191

U.S. Customs and Border Protection 191

Getting Deeper into Customs 200

Other Federal Regulations 207

State and Local Regulations 217

Regulation of Exports 218

Sources of Information and Help 224

11 NAFTA, GATT, and Other Trade Pacts 229

Trade Agreements 229

Preferential Arrangements 239

Sources of Information and Help 243

Epilogue 247

Appendix A: Sample Market Study Outline 249

Appendix B: Guidelines for Business Planning 253

Appendix C: Possible Sources of Financing for Your Business 257

Appendix D: Sample Supply Agreements 261

Appendix E: U.S. Export Assistance Centers 279

Appendix F:Avoiding Import/Export Scams 283

Appendix G: Letters from Store Owners 289

Index 297