There are many effective product sourcing methods for your eBiz. If you’re limiting yourself to one or two, you’re missing out on some tremendous opportunities to grow your business and increase your revenue. Importing is one extremely profitable avenue many retailers fail to employ.
Going directly to the manufacturer enables you to reduce acquisition costs, and allows you to offer products that don’t yet have U.S. distribution. Enthuses Richard Geasey, of the Australian Trade Commission (www.austrade.gov.au), “You can find niche products that address unmet needs here in the States.”
There are different resources for facilitating the importing process, and you should know what role each one plays:
• An agent is a company that accepts delivery of imported goods on your behalf. They deal with customs, pay duties, and pass those items on to you without ever taking ownership of them. If you import large volumes of product on a regular basis, an agent can help alleviate that workload.
• A distributor receives goods from the manufacturer. They offer credit terms, stocking, order-taking, shipping, etc. You need credit to work with a distributor.
• Fulfillment centers offer similar services to a distributor, but the supplier still owns the products. They take your orders and send them to your customers. However, they don’t offer credit or other services. Using a fulfillment center lets you establish credit, so that you can work with the distributors who offer more options.
When you’re starting out in importing, it’s wise to use an agent. If you’re unclear on how your items are going to be classified, how much they’re going to cost, or what potential issues may arise, an agent can help guide you through that process. Says Geasey, “In the future, as you feel more comfortable, you can take on those responsibilities and become an importer yourself.”
Since your landing costs are a significant portion of your expenses, you make your best profits when you import in larger volumes. The more items you combine into one shipment, the more you can spread your shipping costs over those additional items. This lets you keep end costs down for consumers. You want to avoid importing small quantities unless the items are high value and can be shipped in small packages, such as fine watches or pens.
The Potential is There
While importing isn’t necessarily for beginners, once you’ve established your business and know what you’re doing, it can be a terrific expansion tool. Many overseas companies are looking to do business in the U.S., and many of them engage ecommerce sites using drop shipping or light wholesaling. It’s a great channel to find new, unique products and get fantastic savings you can pass on to your customers.