A Lesson in Import Export Trade for Beginners
A Lesson in Import Export Trade for Beginners
Importing and exporting are ways that can improve one's life forever. There is often a situation when a person wants to start a business in this area but can't due to lack of sufficient knowledge and expertise. They are the beginners who need to learn about the ways of business world models on export and import. In this article the basic concepts, models and terminologies of this sector of business will be explained.
Basic Concepts
Import means to supply a product (or service) to one's own country from any other, while export means to supply a product (or service) from one's own country to any other. Trading is the basic need and development of society because it is by default that one region or group or culture can not produce everything.
So this type of business is not new; in fact it dates back to the advent of human civilizations, although it has grown more sophisticated through years of civilizations. Introduction of modern technology and science has made it possible to import and export even from the furthest corners of the world.
For example, think of modern life without perfumes from Paris, electronics of South Korea, China and Japan, beer from Germany, cotton from Egypt and bananas from Alaska. In a year alone the US export-and-import reaches $1.2 Trillion with like 150 countries in total.
International Trade Models
There are several import export business models of economics that describe or try to describe) the international trades. The most popular one is Richardian model, which focuses on comparative advantage, meaning that countries specialize in goods. It also says that labor is the only primary input to production. Other models are Heckscher-Ohlin model which focuses on productivity of popular productions of specific goods. Others are new trade theory and gravity model.
Terminology
Even experienced internet entrepreneurs can be baffled with the technical terms used regularly by economics experts in the field of business, let alone the newcomers. Importing and exporting are such a sector that includes some alien but basic terms such as availability (the probability of finding a good at any one place at a time), manufacture's representative (salesperson specialized in a line/type of products), distributor and wholesale distributor (an organization buying your stuff and selling it to the other side), representative (salesperson who sells the products to distributor), retailers (tail end of business-chain) and others.
The various types of importing and exporting companies are Export Management Company or EMC (that handles overseas business for a domestic company), Export Trading Company or ETC (that hunts down which products foreign buyers are willing to buy and then find the domestic organizations that make that product and then they export) and an import/export merchant, who is free agent i.e. an entrepreneur.
Beginning import export needs some import export training and some import export advices. A newcomer on the field will do good to remember this.
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