Import Export Industry is one of the most flourishing industry engaged in providing high returns or profits. The process of selling and purchasing of goods are not new, but it is performed for centuries when merchants used to trade their goods and services from one country to another. The only thing which has changed now in the world of import and export is the ease of doing business, better transport management and opportunities at a larger scope with good support from the government to promote the export of goods and services from one country to another country.
Although the Import-Export Industry helps in earning high profits for anyone interested in expanding their business at a global level, small mistakes are never to be ignored in this industry. This is due to the fact, as one small mistake will lead to higher risks, and thus, it will reduce the profit margin business can earn through import or export.
Common Mistakes to Avoid in Import Export Industry
1. Signing a Contract without Confirming the Legitimacy of the Buyer/ Seller
Many small traders and manufacturers want to expand their business in international trade, but do not give much importance to check the reliability of the importer. If left unnoticed, the company might be under the risk of involving into more losses.
There are a large number of companies which try to lure the importer or exporter with fake company profiles and product portfolios. Understanding your customer is your right, be it on the international as well as on the domestic market, and checking the reliability or the legitimacy of the buyer or seller with proper government officials helps a business minimise the risk factor and maximise the profit.
2. Understanding the Country Regulations
One of the most common mistakes that an exporter does while supplying the goods to foreign countries is that they think that they can supply anything they want to foreign countries. In reality, it is not the case when it comes to getting your product in the Import-Export Industry as certain countries have their norms which allows only a few products and restricts the import of other goods from a foreign country.
Understanding these norms helps an exporter to save him a large amount of money and their products, both at the same time.
3. Lack of Import Export Knowledge
A common myth a small or medium enterprise has that they can easily supply a particular product in the international market without getting trapped in any losses. But a lack of knowledge of the import-export regulations may result in a greater loss than expected.
There are certain terms which ICC or international chamber of commerce has implemented to make sure a business done in the Import-Export Industry is performed smoothly with fewer risks and at a high-profit margin. Understanding the basic import-export regulations before stepping in the world of international business is a must to be on a safer side and avoid the risk of penalties by sending their consignments on time.
4. Neglecting the Importance of Incoterms
Incoterms, a short form of International Commercial Terms is one of the easiest terms defined by the international chamber of commerce to make the import or export of goods from one country to another easier. These Incoterms use abbreviations such as FOB for free on board, EXW for ex-works, FAS for free alongside ship, FCA for free carries, to name a few.
If you are willing to hit the international market or the Import-Export Industry, it is important to be aware of these Incoterms as it will help to overcome the risks of goods handling and providing a safer path for trade with the help of legal documentation, thus saving enough money.
5. Incompetent Customs Broker Increases the Risk of Losing Money
Customs broker makes sure that all your businesses are done in the Import-Export Industry adhere to the strict norms of the government of both countries (the exporter’s as well as the importer’s place or country). An incompetent customs broker will result in making a greater loss in the business if the documentation is not verified and met with the legal norms on-time.
Thus, it is very important to contact a reliable customs broker after enough verification from the competent authority to make sure all the businesses are met with ease with hassle-free documentations who is fully aware of all the paperwork required to supply certain products.
6. Insurance of the Goods Supplied or Imported
A very important factor in the international business which makes sure that the goods supplied or imported will reach safely or if any, loss or damage occurs, the items were insured before it was dispatched, either from the importer’s side or from the transportation authority.
While trading the goods and services in a foreign market, insurance of the goods are the best ways to secure your products which can be done through easy documentations between the consignee and the shipment company. Avoiding which may result in unbearable losses of products as well as of capital.
7. Not Paying Attention to the Exchange Rates
Many business owners tend to avoid foreign exchange rates while exporting or importing the product from one country to another. It happens because the traders overlook the risk factors and only focus on profit margins, but in reality, the rate fluctuations might be a reason to lose enough margin.
It is important to focus on the exchange rates when shipping material on the 30 to 90 days credit terms and wait until the fluctuations in the foreign exchange rates get stabilised for smoother transactions and higher margins.
Download the Infographic of this Blog for future reference
You can also view the complete information of this blog in the infographic displayed below. The below image contains the entire information and helps the import export business owners to stay updated about the mistakes in the import export industry.
As an experienced exporter, we understand that avoiding mistakes when exporting is crucial to the success of any international business venture. One common mistake that many exporters make is failing to conduct thorough research on their target market before entering it. This can lead to costly errors such as misjudging demand or violating local regulations and customs. Additionally, overlooking the importance of proper documentation can result in significant delays and even financial penalties for non-compliance with import/export laws.
To be a successful supplier or buyer in the Import-Export Industry, the mistakes mentioned above should be avoided. It not only helps you make a footprint in the foreign soil easily but also save your company in getting the risks of losing money and consequently helps you maximise the profits. For more queries or details, please call on+91 9211066888.
- Post-Pandemic Resilience in Global Supply Chains - 27-02-2024
- E-commerce and Its Influence on Cross-Border Trade - 26-02-2024
- Impact of Geopolitical Changes on Export-Import Strategies - 24-02-2024