Do you wish to learn how to start importing (importation) and exporting (exportation) business? If yes, then you have really made a good decision.
Importing (importation) and exporting (exportation) business is some of the top best businesses that pay so much profit.
Before you go into this kind of business, you will need to learn how to start importing (importation) and exporting (exportation) business so as to have the basic hints on how you can start it and make it work profitably for you.
Starting importing (importation) and exporting (exportation) business is not as simple as starting any other business. Starting importing (importation) and exporting (exportation) business will need some international connections and documentation so as to grant your goods safe delivery.
What is Exportation and Importation Business?
Importation (importing) business is a kind of business that involves buying goods and services across borders. This simply means that an entrepreneur involves in such a business has to pay to get his or her goods from another country other than his or hers.
How does it work? Exportation (Exporting) Business involves Selling out of goods from a particular country to another country.
This is to say that Exportation and importation businesses are cross-border businesses. As a result of this, Exportation and importation business needs so many international relationships.
Important Factors on Exportation and importation
One thing to note about exporting and importing business is that there is always a challenge that lies in its structures.
As a result of this, one must be very good at setting up a structure that will be able to cope and adapt to the shifting factors affecting that particular country’s balance of trade which is usually defined by its net exports or exports minus imports.
Factors like, currency exchange rates, rate of productivity, social beliefs and consumer behaviours, rate of goods and services consumption, political circumstances, factor endowments (labour, capital and land), economy and trade policies, Climatic and weather conditions, taxes and levies, inflation and demand etc. must be taken into consideration before kicking off.
Requirements and Processes for Exportation and Importation
To successfully run an Exportation (Exporting) and Importation(importing) Business, certain documents and signatories must be endorsed so as to enable the entrepreneur to obtain a legal operation permit.
As such, the factors and processes for starting Exportation (Exporting) and Importation (importing) Business will be discussed simultaneously.
N/B: These factors and processes may differ from country to country. So endeavour to make findings of your country’s demand on this.
If you want to start exportation (exporting) and Importation (importing) business, then here is a guide to help you so as to avoid making a mistake because if you make a mistake, it may take a very long time to correct it and get your payment and delivery done.
This depends on your county as there are some countries that will require you to register as an exporter for SGS so as to enable customized quality checks.
European and African countries require SGS verification to enable them to carry out inspections on your factories, industry, company or goods before dispatching them for shifting.
SGS stands for Société Générale de Surveillance. SGS is an autonomous worldwide international inspection body that focuses on inspecting all fields of productions so as to improve the field of the company’s qualities & productivity, compliance verification and reduction of risks on products being exported.
2. Get Your Export-import License.
The next step in starting the exportation (exporting) business is to legalize it and this is well done by getting an IEC from DGFT as demanded from all exporters.
IEC means Importer Exporter Code. To get your IEC, you must, first of all, get an export/import license from the Director-General of Foreign Trade or DGFT. At DGFT, you will be required to provide the attributes, samples and particular types of goods you will be shifting.
3. Get Your Airway bill and bill of Lading as required.
The Airway Bill: This is a very important document that ensures that shifted goods have been received successfully.
The Bill of Lading: This is another important document that is usually issued by a carrier or its agent to the shipper. The document contains details of the goods shifted such as the type of goods, the number of goods and where the goods are being shifted to.
The two documents (the Airway Bill and the Bill of Lading) are very important legal documents in the shipping industry that one cannot do without.
4. Choose and Set up a secured, reliable and convenient payment platform for your transactions.
The most important aspect of this business is the capital you make from it and how to secure it. Due to economic, socio-political and environmental factors and behaviour of the particular country that the goods are to be shifted to, the entrepreneur must make sure he or she secures the transactions.
To help you with this, I will recommend the following ways for you.
- Take Advance:
Acquire your customers and take advance from them against your goods. This means you should at least take part in Payment before your goods are being shifted then you can receive the balance payment after the gods might have arrived at its destination.
- Use LC:
LC stands for Letter of Credit. This can also be called “Bankers Commercial Credit (BCC).
LC or Bankers Commercial Credit is a payment method used in international trade to provide an economic guarantee from a creditworthy bank to the exporter.
To use this method, you will be required to open a Letter of Credit (LC) which is also called bankers commercial credit with a first-class bank.
Three aspects to this document must be secured before taking any order or before supplying goods – LC must be irrevocable, must be from a, and should be at sight.
If you are from African Countries like Nigeria, then follow these steps to register, legalize and get authorized operational license to start your importation (importing) and exporting (exportation) business.
Requirements and Processes for Importation (importing) Business In Nigeria.
For you to successfully start an importation (importing) business in Nigeria, you must:
- Register your company’s name.
- Get a Certificate of Incorporation and a Certificate of your Company’s registration.
- Register your Company on Federal Inland Revenue Services (FIRS) with your tax payment (this should be up-to-date).
- Get your Tax Identification Number (TIN Number) with valid email.
- Choose a Bank of your choice that you will use as the Authorized Dealer Bank (ADB). It must be a Nigerian Bank. It is the Bank that will have to process the Form M / Pre Arrival Assessment Report (PAAR), as well as mediate among the Nigeria Customs Service (NCS), the importer and other bodies.
Once you have completed that above procedure, then the importer can start his or her importation business by following the following steps below to order goods:
1: The importer will now gets his or her Regulatory Certificates, like the Product Certificate (PC), for the items that are regulated.
2: After the importer might have received the PC, he or she is to activate the PC on the online single window.
3: After the Step 2, the importer will have to open a Form on the Nigerian Trade Platform (Single Window system) and attach the needed documents, like, Insurance Certificate, Proforma Invoice, Product Certificate and submit it to the ADB.
4: The importer must wait for the ADB to reviews and validates the Form M and sends it to NCS.
5: The importer also has to wait for the NCS to review the Form M. At this stage, the NCS are to either accept or reject the Form M. They only accept the Form M when if it is properly documented but reject it if it is not properly completed or if it lacks some information and documentation.
6: If the NCS accepts the Form M, then the importer will have to forward a copy of the Form M to his exporter.
7: The exporter will have to contact Cotecna, the International Accreditation Firm, with the Form M received from the importer, the Final Invoice, Bill of Lading and Airway Bill and packing list so as to be issued a SONCAP Certificate.
8: After the Exporter might have gotten the SONCAP, the importer will then be required to activates the SONCAP Certificate and apply for PAAR issuance at the Nigeria Single Window for Trade.
9: After the importer might have received a PAAR, he or she will now be eligible to of starting the clearance of his goods.
10: This stage covers the landing of the goods.
There are two categories here which are: The Shipping Company and Terminal Operator
- The Shipping Company handles the submission of import manifest to customs/NPA/Terminal Operator. They also bring in vessel, pay ship charges, pay NPA charges and Issue bill of lading.
- The Terminal Operator handles the Terminal Handling and Weighing, Loading of Cargo, Issuing of bills for handling and rent and delivers the goods.
Requirements and Processes for starting Exportation (Exporting) Business In Nigeria.
For you to successfully start an exportation (exporting) business in Nigeria, you must:
- Nominate agents known as a Forwarder.
- Get an importer to open LC known as letter of credit
- Take an Insurance Policy for Cargo
- Pay all necessary payments and logistics for all services. You may be required to pay up to Port (if shipped on Free on Board).
- Obtain Regulatory Certificate such as Product Certificate
- Arrange Transportation to Port
- Arrange inspection by NCS, SSS,NDLEA/ and other related Government Agencies
- Make Payment of Duty where applicable
- Make Payment of Shipping and Company charges such as Freight
- Book space with Shipping Agent
- Pay Terminal Operator’s Charges.
The shipping Company must:
- Bring in Vessel
- Pay Ship Charges
- Pay NPA Charges
- Issue Bill of Loading
The terminal Operator must:
- Do the Terminal Handling
- Carryout the Loading of Cargo
- Issue Bills for handling and rent
Receivers Agent Abroad must:
- Arrange for inspections
- Pay Port and Shipping Charges.
- Make sure of Transporting Cargo to Importer
Will now Receive his or her imported cargo.
Step-by-step Guide on How to start a profitable Exportation (Exporting) and Importation (importing) Business.
Starting a successful shifting business is very simple if only you know how and where to start your importing (importation) and exporting (exportation) business from.
I have discussed this before with you at the beginning of this article but let me recap them once more.
For you to start a successful Shifting Business, you should:
- Register with the authorize bodies in your country, legalize your business and document all required documents.
- Get Your Export – import License and some other operational permits.
- Get Your Airway bill and bill of Lading as required from the appropriate body.
- Choose and Set up a secured, reliable and convenience payment platform for your transactions.
- Make sure you go through the actual and appropriate registration processes as required by your country.
Following your country’s appropriate importing (importation) and exporting (exportation) processes will help you to have a more secured shifting and transactions of your goods and capitals.
Few Challenges in Exportation (Exporting) and Importation (importing) Business and how to cope with them.
There are some challenges you will face during this processes. As you can see in the section where I listed the processes and requirements for starting importing (importation) and exporting (exportation) business, you will notice that they are a lot of registrations that you will have to carryout. Apart from that, they are also many documentations that you will have to present.
Some of the major Challenges faced in importing (importation) and exporting (exportation) business are as follows:
- Delay in delivery and transactions:
In some shifting processes, goods arrivals may be delayed for months. This will as well delay the payment process in a kind of shifting where the importer is to see the goods before making payment.
- Long registration processes:
Starting importing (importation) and exporting (exportation) business in some countries requires a lot of registrations and documentations. You may spent months just for registration as you will be sent from offices to offices for confirmations of documents and so on.
- Lost of goods:
Some goods usually perish during the shifting process. This may as a result of delays on delivery which may cause perishable goods to lost their quality and finally get spoil.
- Payment of charges:
There are so many charges involve in importing (importation) and exporting (exportation) business.
In all, importing (importation) and exporting (exportation) business is very profitable if done in the actual and appropriate way.
What you should take away.
Importing (importation) and exporting (exportation) business is a very profitable business. For you to successfully run any importing (importation) and exporting (exportation) business, you must be ready to cope with some of the minor challenges and also make sure you have all the necessary document required for this.
Also make sure you follow the actual and a legalize process when starting this. Never try to by-pass any process as listed by your country so as to avoid your goods being banned or ceased.
The processes and requirements for starting importing (importation) and exporting (exportation) business listed above are for some countries and not all countries. The process may be the same for all countries but the requirements may differ. So make all the necessary inquiries from your country so that you know the normal process to follow.
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