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Tips Before Starting an Import/Export Business

excelsior on November 15, 2019

Tips Before Starting an Import/Export Business

Setting up a business is not a simple task, let alone offering products that can reach more people on an international scale. If you’re an aspiring entrepreneur looking to plunge into the tough competition of foreign commerce, you must be equipped with adequate skills and knowledge in order to survive.

Running an import-export business is now much more convenient than before with the advent of modern technology. The use of the internet to communicate with customers has become commonplace and the learning curve in managing different operations mostly requires competent organizational skills.

While you don’t have to be an expert in this kind of industry, it is still a necessity to be aware of certain things that can optimize your chance of growth as well as minimize the effects of potential risks. The possibility of failure is always present in any form of business, so you should always pay attention to every detail.

Here are some of the best tips that can help you when starting out an import or export business:

Consider Your Products

Since you will be taking on an import-export trade, the products that you’re going to sell can become the X factor for fate of your company for the following years. Think carefully when deciding which product should you sell and be sure to stick with it. Once you figured out the best products for you, use your judging skills to know whether these products are worth your investment or not.

Always keep these two important questions in mind:

  • Do people want those products?
  • Do you know how to sell it properly?

If you are confident that your products can become something that is sought-after by many people across cultures and you know at least the fundamentals of selling it properly, then you now have a set of products to sell.

Find Your Target Market

So you already have some products to sell, and the next problem you need to solve is how you can find the people that are more than willing to buy them. Those people are your customers, your target market. Identifying them from a specific country can be a herculean task, so you’ll be needing extra time and probably a hand to do this the right way.

Prepare in-depth research regarding the latest market trends of the particular location where you desire to offer your products. There are several agencies that can do this for you in case you have a pretty hectic schedule.

Set up a Website and Develop an Online Presence

Creating a website provides your company and your products the needed exposure for online users around the world. Take advantage of multiple online platforms to market your products especially your target market. Be responsive to customer feedback and complaints and establish an online community that can enhance their loyalty and ultimately accumulate sales for your company.

Amp up Your Logistics Connection

One of the most challenging things that your import-transport business will have to overcome is making a solid system or plan on transporting your products. With a bunch of legal processes that concern your line of profession, you must be ready to outsource services in logistics. Take for example freight forwarders. Hiring a freight forwarding agency can significantly lessen your load of tasks in complying with customs requirements and other legal processes. They can even help you find the best carrier so that you can cut down your expenses in shipping.

Excelsior Worldwide Freight Logistics conducts free orientation for those who are willing to learn. It is our advocacy to share our knowledge & experience worth more than a decade in the business. Visit our website today at www.excelsior.ph to learn more about our service.

 

Sources:

Philippines Top 10 Exports

excelsior on June 21, 2016

Workman, Daniel (2016, June 21). Philippines Top 10 Exports. Retrieved from http://www.worldstopexports.com/philippines-top-10-exports/

Exports from the Philippines amounted to US$58.6 billion in 2015, up 22.1% since 2011 but down -5.1% from 2014 to 2015. Philippines top 10 exports accounted for 80.1% of the overall value of its global shipments.

Based on statistics from the International Monetary Fund’s World Economic Outlook Database, the Philippines’ total Gross Domestic Product amounted to $742.3 billion in 2015.

Therefore, exports accounted for about 7.9% of total Filipino economic output.

From a continental perspective, 67.1% of Filipino exports by value are delivered to other Asian countries while 16.8% are sold to North American importers. The Philippines ships another 12.8% worth of goods to European clients with 1.3% going to Africa.

Given the Philippines’ population of 101 million people, its total $58.6 billion in 2015 exports translates to roughly $581 for every resident in that island country.

The unemployment rate for the Philippines was 5.8% as of January 2016 per Trading Economics.

Top 10

The following export product groups represent the highest dollar value in Filipino global shipments during 2015. Also shown is the percentage share each export category represents in terms of overall exports from the Philippines.

  1. Electronic equipment: US$26 billion (44.3% of total exports)
  2. Machines, engines, pumps: $8.2 billion (14%)
  3. Wood: $2.9 billion (5%)
  4. Medical, technical equipment: $2.4 billion (4.1%)
  5. Ores, slag, ash: $1.6 billion (2.8%)
  6. Ships, boats: $1.5 billion (2.6%)
  7. Vehicles: $1.4 billion (2.4%)
  8. Animal/vegetable fats and oils: $1.2 billion (2%)
  9. Knit or crochet clothing: $872.4 million (1.5%)
  10. Copper: $860.2 million (1.5%)

Medical and technical equipment was the fastest-growing among the top 10 export categories, up 276.5% for the 5-year period starting in 2011.

In second place for improving export sales were Philippines-made ships and boats which rose in value by 139.5% led by cargo vessels.

Filipino electronic equipment posted the third-fastest gain in value at 118.8%.
Leading the decliners among the top 10 Filipino exports were copper shipments declining by -36.8% and vehicles’ -35.8% slowdown in international sales.

Advantages

The following types of Filipino product shipments represent positive net exports or a trade balance surplus. Investopedia defines net exports as the value of a country’s total exports minus the value of its total imports.

In a nutshell, net exports is the amount by which foreign spending on a home country’s goods or services exceeds or lags the home country’s spending on foreign goods or services.

  1. Electronic equipment: US$6.1 billion (Up by 98.9% since 2011)
  2. Wood: $2.5 billion (Up by 70.6%)
  3. Medical, technical equipment: $1.5 billion (Down by -6,408%)
  4. Ships, boats: $1.4 billion (Up by 160.8%)
  5. Ores, slag, ash: $1.3 billion (Up by 357.3%)
  6. Knit or crochet clothing: $722.7 million (Up by 0.1%)
  7. Fruits, nuts: $588.7 million (Down by -24.9%)
  8. Animal/vegetable fats and oils: $577.1 million (Down by -36.3%)
  9. Vegetable/fruit preparations: $479.9 million (Up by 53.5%)
  10. Copper: $423.9 million (Down by -40.8%)

The Philippines has highly positive net exports in the international trade of electronic equipment including consumer electronics. In turn, these cashflows indicate the Philippines’ strong competitive advantages under the electronic equipment category.

Opportunities

Below are exports from the Philippines that result in negative net exports or product trade balance deficits. These negative net exports reveal product categories where foreign spending on home country the Philippines’ goods trail Filipino importer spending on foreign products.

  1. Oil: -US$7.6 billion (Down by -34.1% since 2011)
  2. Vehicles: -$3.4 billion (Up by 433.2%)
  3. Iron and steel: -$1.6 billion (Up by 48.6%)
  4. Cereals: -$1.6 billion (Up by 16.6%)
  5. Plastics: -$1.5 billion (Down by -2.9%)
  6. Pharmaceuticals: -$1.2 billion (Up by 45.2%)
  7. Food waste, animal fodder: -$971.5 million (Up by 16.3%)
  8. Paper: -$864.5 million (Up by 32.5%)
  9. Meat: -$814.2 million (Up by 97.7%)
  10. Other food preparations: -$802.2 million (Up by 50.8%)

The Philippines has highly negative net exports and therefore deep international trade deficits for fossil fuels including crude and refined oils, coal and petroleum gases.

These cashflow deficiencies clearly indicate the Philippines’ competitive disadvantages in the international fossil fuel market, but also represent key opportunities for the Philippines to improve its position in the global economy through focused innovations particularly in alternative energy sources.

Companies

Filipino Export Companies

Ten Filipino corporations rank among Forbes Global 2000 for 2015. Below is a sample of the major export companies headquartered in the Philippines that Forbes included:

  • San Miguel (industrial conglomerates)
  • PLDT (telecommunications services)
  • Ayala (industrial conglomerates)
  • Aboitiz Equity Ventures (industrial conglomerates)
  • Alliance Global Group (industrial conglomerates)

According to global trade intelligence firm Zepol, the following companies are also examples of Filipino export companies:

  • Acbel Polytech Philippines (electric static converters, primary batteries)
  • Calfurn Mfg Philippines (bamboo/wood furniture, kitchenware, tableware)
  • Yuenthai Philippines (shirts, blouses)
  • Pacific Paint Boysen Philippines (polymers, oils)
  • Aruze G A Philippines Branch (machine tools, printers, copiers, operated games)

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