About Import and Export Businesses
Entrepreneurs get involved in the import and export industries due to the high potential for profit. American businesses imported $1.2 trillion in goods while exporting $772 billion to foreign countries in 2007. Investments in goods traded internationally require careful planning, impeccable timing and a commitment to the longer view. The vagaries of operating ships, paying duties and dealing with customs officials need to be understood before diving into this industry.
History
The origins of the import and export industry go back to the first European traders journeying into Asia. These traders brought potatoes and bronze goods to Asia in exchange for silk, spices and firearms. Spain, France, Great Britain and other European nations began to use colonies for their natural resources as well as their dependent consumers in the sixteenth century. As colonies gained independence starting with the American Revolution, independent nations continued trade with their former colonizers due to common economic ties. Recent innovations like airplanes, computerized inventory systems and dedicated port districts have made international trade easier for nations big and small.
Types
Three types of import and export businesses exist in the twenty-first century. Small retailers looking to ship products overseas without investing in costly infrastructure can contract import and export services to an export management company. Investors and large corporations who have not yet developed relationships overseas can work with an export trading company to find eager trade recipients. Exporters and importers in niche industries can use independent export merchants to find trade partners overlooked by competing companies.
Function
The function of the import and export business is ensuring a diverse marketplace of products despite geographical boundaries. Importers and exporters ship products to ensure that airports, retail outlets and grocers from Kenya to Canada meet the demands of customers. While the homogenization of products in chain stores like Wal-Mart and McDonald's reduces market diversity, importers and exporters keep product prices low by shifting resources to existing suppliers. Importers and exporters have simplified international shipping, air cargo and inventory control through industry standards unavailable prior to the globalization of trade.
Size
The scope of an import or export business depends on a company's location as well as trade barriers between nations. American importers and exporters can work with Canada, Mexico and South American countries due to agreements like NAFTA and CAFTA that reduce trade barriers. European traders and companies working in the European Union have access to diverse markets without worrying about tariff and logistical costs. While the chasm between distant traders like Australia and South Africa has been lessened by shipping technology, these countries may lack the diplomatic history to expedite the importing and exporting process.
Benefits
The primary benefit of the import and export business is the exchange of goods unavailable overseas. Consumers in cold-weather places like Russia, Canada and the Scandinavian region benefit from imported goods like oranges, pineapples and coffee. Another benefit of importing and exporting goods is creating goodwill between nations with divergent interests. While the United States has political disagreements with China, both sides have created an effective trade relationship starting with imports to Chinese exiles in Taiwan during the 1950s.
