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First of all, I want to thank you for having started this thread here. I have been reading it and I like the wealth of information that only comes from first hand experience.<br />
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My question is about starting an Export Management Company (EMC). From what I have read, the difference between an EMC and a regular import-export trader is that the former is basically an outsourced international trade department for companies wanting to export, while the latter, which is what you have been describing here and most people think when one speaks of import-export, is about reselling a foreign product, or private-labeling it. So from what I understand, an EMC would entail less risk but also less rewards as you’re working for a fee or even a retainer instead of keeping all the profits from buying and then selling the product in another market. <br />
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As to why I’m thinking of starting an EMC, I see many benefits: There is less risk involved and thus less potential profits, yes, but also you could get to establish more stable and longer relationships with the manufacturers as they will see you as their partner instead of merely one of their buyers; also if you do your job well there is less of a possibility of being replaced by another company. Looking at the medium and long term, I think (but I might be completely wrong) that many manufacturers will eventually try to sell directly to other markets on Amazon, EBay or by using their own stores online by themselves, instead of waiting for the middlemen to come. And as FBA, for example, grows and its service is being established in more countries, it could be a matter of time before it starts happening en masse. So starting an EMC specializing in e-commerce would be to a certain degree a “if you cant beat them, join them” kind of thing. EMC’s also seem to be more adaptable and wide ranging in the kind of things they do: they can do everything from consulting, doing the market research, contacting buyers to basically taking care of the whole export process.<br />
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Am I right in my analysis of what an EMC does? Are there other things to consider if one would want to start an EMC? Is it a business one can start as easily (easy being a relative term here, of course) as importing and reselling? Would it be impossible to do as a one-man operation?
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</blockquote>Hi Gallus,<br />
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What you describe is the activity of an export broker.<br />
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Your biggest hurdle will be your first one, and that is to learn the basics of both importing and exporting. You need to learn to talk the language of the industry, and that is very important. It is not only the exporting industry for which you need to learn the language. The same applies to the industry you are offering to represent as their export broker.<br />
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If for example you want to be a broker handing wallpaper, it is essential that you know all there is to know about wallpaper. Both the sellers you want to broker for, and the buyers you want to sell to will expect that you know what you are talking about.<br />
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Any very slight mistake in the description on a Bill of Lading could make it difficult or impossible for money to be collected on the Letter of Credit. There you are - I have used two import/export industry jargon terms that you need to understand, but there are heaps more.<br />
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I know it looks tempting, but I advise against rushing in. Educate yourself first.<br />
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My book is probably not suitable for you because although it deals with those terms you need to know, as well as things such as container shipping, freight forwarders etc, and the basics of importing, it is not an exporter's book. It deals primarily with safely sourcing products overseas and importing them the easy way.<br />
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I have some experience as an indent broker, which is the opposite of an export broker, and I know how hard it can be. Selling on indent means acting as an import broker, selling product on behalf of an overseas supplier and obtaining a commission on the sale. It can be a long time between meals. <br />
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The same principles apply when acting as either an import or an export broker. There are many small manufacturing businesses that produce items that could sell competitively in another country, but the owners are ignorant of the fact that it is even possible. Your task would be to find those manufacturers, identify their strengths, locate potential markets overseas, and convince the business owner that you could give them a trouble-free boost to their turnover.<br />
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There is a short cut for you in finding those potential markets overseas, and that is Alibaba. You could register as a vendor, and advertise your client's products there. You might even be able to make some sales, but I can assure you that in the process you will be swamped with opportunist, wannabee importers who will waste a huge amount of your time.<br />
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If I seem negative, it is only because I have seen the process first hand and I want you to understand that it is not easy.</div>
