Import/Export to India

[Mikkel]

I came across an interesting opportunity for myself and was hoping for some input.

I have been networking with people from India, as I have been working to import products for a brand that I am working on. I got to talk to a CEO of a biotechnology company who wants to export his products to the United States. Because we have a good working relationship, he asked me if I wanted to help him bring his products to US markets as well as export products to India for him. He is already in talks with some major US companies to buy his products, so he will most likely already have buyers set up.

Now what I am trying to figure out is, what would be the best business model to work with that will be mutually beneficial. We both came up with two possible business models. Are these the only two models, or is there a different business model that I am unaware of?

Option 1: I start a branch office in the United States. All products are paid for by the company so I personally have no overhead, but it seems more like a slow lane job. The benefit, from how I look at it is, I can gain some good experience with importing and exporting and can use this opportunity as a springboard in the future.

Option 2: I act as a separate company, maybe work out a deal that I am the sole distributor of the product. The more I sell, the more money I make. Of course, then I may need a large amount of capital for start-up costs. The benefit would be that I can use that same company to import/export products from other companies in the future as this CEO is willing to introduce me to other business owners who might be interested in the same service.

I have never had this opportunity offered to me, and wanted to see if anyone had insight on this topic.

If I can hash out a good deal with the company's owner, I'll make a progress thread on the topic!

 

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[growth]

I came across an interesting opportunity for myself and was hoping for some input.

I have been networking with people from India, as I have been working to import products for a brand that I am working on. I got to talk to a CEO of a biotechnology company who wants to export his products to the United States. Because we have a good working relationship, he asked me if I wanted to help him bring his products to US markets as well as export products to India for him. He is already in talks with some major US companies to buy his products, so he will most likely already have buyers set up.

Now what I am trying to figure out is, what would be the best business model to work with that will be mutually beneficial. We both came up with two possible business models. Are these the only two models, or is there a different business model that I am unaware of?

Option 1: I start a branch office in the United States. All products are paid for by the company so I personally have no overhead, but it seems more like a slow lane job. The benefit, from how I look at it is, I can gain some good experience with importing and exporting and can use this opportunity as a springboard in the future.

Option 2: I act as a separate company, maybe work out a deal that I am the sole distributor of the product. The more I sell, the more money I make. Of course, then I may need a large amount of capital for start-up costs. The benefit would be that I can use that same company to import/export products from other companies in the future as this CEO is willing to introduce me to other business owners who might be interested in the same service.

I have never had this opportunity offered to me, and wanted to see if anyone had insight on this topic.

If I can hash out a good deal with the company's owner, I'll make a progress thread on the topic!

Hello Mikkel. Both options are great. In my own opinion and little experience, being a sole distributor requires a huge start-up capital because you have to purchase products in large quantities. So what happens when you purchase in large quantities and do sell all at once? I would suggest option 2 with a little tweak. Instead of being a sole distributor of that product, become an agency that help import and export, even with scouting buyer. Here's how you make money as an agency,
1. Charge a certain percentage on the total cost of the goods. i.e If the total goods costs $5,000 you charge 10%, 20% or any % of the cost of goods as your service fee. You sell at company pice but agree on a percentage you'll be given.
2. Charge on each item. i.e If 1 item costs $2, you can quote $2.5 or $3. You'll make $0.5/$1 on each item. You sell at your own price after the company gives you a discount.
How would you benefit from being an agency, compared to a sole distributor,
1. You don't need huge capital.
2. You don't have to purchase with your money, you only deliver what is needed.
3. You can import and export any kind of product, not just the product this brand wants. You are not limited to being a biotechnology distributor but you can also do other things.
I hope this helps, good luck with your business Mikkel.

If you'd like to discuss more, write to me at faithfulychi@gmail.com

 

[Mikkel]

Thank you @growth

I had been doing more research on both options since making this post. I think you are correct. To decrease my risk and overhead, being a middle man who organizes shipments from one company to the other seems to be the most scalable and cheapest option with the most amount of control.

Now, I believe an import/export company(option 2) can still have the ability to sign a contract where my company is the only company that can distribute a certain product in a certain country. Rather than hold the product in a warehouse(USA), I may hold some samples of the product to help promote their product, but all orders must be shipped from the manufacturer.

I have a meeting with the CEO in the next few days. I will propose these two options but suggest the 2nd option.