International trade:

International trade is the exchange of goods and services across national boundaries. 

International trade is one of the most developing industries. Despite some of the restrictions and disruptions in international trade, this is not a new type of business opportunity, and it tends to grow steadily. Trade exists because one group or country has a supply of some merchandise that is in demand by another group or country. This demand creates a need for international trade, importers and exporters.

Marketing:

Marketing is vital to the success of the import and export business. There must be enough market potential to justify undertaking the import and export business.

There are many market opportunities for the products. You just must find it and see if there is enough market for you to make it worthwhile after buying the product and importing it and the same mindset applies to exporting goods as well.

The major functions of marketing are product, price, place/distribution channels and promotion.

Online marketing and social media marketing.

Quotation:

A quotation is basically the product information and the price for which you can buy the goods for the specified shipping and payment terms.

The key elements of a quotation are: Product description and specifications, price, quantity, shipping terms and method of payment.

Typical cost elements for import/export: Manufacturing cost of product, packing for shipment, transportation (local and international), insurance, tariffs, bank and payment processing fees, and advertising. Each cost element for import and export needs to be detailed and evaluated.

Shipping terms:

Shipping terms quite simply define the geographical point where the risks and costs of the exporter and importer begin and end.

There are four groups: E group for ex works, F group for FCA, FAS and FOB, C group for terms where the seller has to contract for carriage CFR, CIF, CPT and CIP, and D group for terms in which the seller has to bear all costs and risks to bring the goods to the place of destination DAP, DPU, and DDP.

Methods of payment:

Inexpensive, secure payment is vital to any business. In international transactions, there is an extra element because money must cross international boundaries.

In international trade, there are several means of payment, each of which has its costs, advantages and risks. Both parties seek a term that is favorable to themselves but still acceptable to the other.

The most important methods of payment are open account, documentary collection, letter of credit and payment in advance.

International money transfer and methods of international money transfer.

Transportation:

International transportation is moving goods from one country to another. Importers and exporters are inevitably involved in transportation functions such as shipping, packing, and insurance.

There are several different methods of shipping. The method chosen will depend on the cost and other factors. Small items can easily be handled by mail and couriers. You might use air freight, sea/ocean freight or land (road and/or rail) for larger ones, but the decision varies with such factors as the value and fragility of the cargo. You can also use different methods of shipping together which is called intermodal shipment.

Documents in international trade:

Most international trade documents can be placed into the following categories. Commercial documents, shipping (transportation and insurance) documents, government formalities documents, and banking documents.

In general, the purpose of all of them are to facilitate control and keep track of international cargo movements.

Typical ones are invoice, bill of lading, packing list, certificate of origin, inspection certificate, insurance certificate, and there are various others.

Bank, customs broker and freight forwarder:

Banks, customs brokers, and freight forwarders are important part of the import and export business.

Bank is the primary industry that supports the financing of importing and exporting.

Customs broker’s functions are to locate your goods, fill out an entry form and arrange for a customs inspector to clear your goods. The customs broker is an important asset to importers. It is their job to know the ins and outs of importing in intimate detail and to handle all the paperwork and details on your behalf.

Freight forwarders handle the transportation and can assist by advising you of freight costs, port charges, consular fees, special documentation charges and insurance costs. They can recommend the proper type of packing to protect your merchandise in transit.

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