Before starting his importer/exporter business, Brad Fallon ran a small software company. He was interested in branching out into Internet
He was interested in branching out into Internet sales, but wasn’t sure if the products he wanted to sell would be profitable. Then a programmer from China tipped him off to the biggest success secret he’d ever heard: Brad could get the products he wanted at bargain prices … from China.
Without having to pay the steeper prices charged by U.S. wholesalers, Brad could widen his profit margins. And he did.
Brad launched a company in 2004 that sells wedding favors online. He imports his products from Chinese manufacturers at the lowest cost in the world. Then he sells them at substantial markups.
In 2005, Brad’s company had sales just shy of $3 million – giving him a net profit of about $600,000.
Brad is not the only one making money by importing inexpensive products and reselling them on the Internet. In fact, there’s a website devoted to helping entrepreneurs do just that: Alibaba.com.
Alibaba.com.is the world’s largest marketplace for global trade and the leading provider of online marketing services for importers and exporters. It is the place for buyers and sellers to find trade opportunities and promote their businesses online. Alibaba.com is an online business platform (rather than a trading company) where you can search for or post information to find potential business partners.
Here are some of the ways Alibaba.com helps entrepreneurs:
- Buyers (or importers) can search and browse sellers’ products, and make inquiries to negotiate or place orders.
- Sellers (or exporters) can post their company information and include product photos (together with descriptions, specifications, shipping terms, etc.) on Alibaba.com to attract buyers.
- Entrepreneurs can communicate with buyers and suppliers in real-time with the TradeManager platform, an operation center that provides instant communication functions.
- Entrepreneurs have instant access to more than 23,000 products available for import or export. They also gain instant access to more than 1,600 manufacturers and suppliers.
- Alibaba.com’s market niche is small- and medium-sized businesses – unlike eBay, which targets the consumer.
The best part about Alibaba.com is that it enables entrepreneurs to break into the import/export market quickly and easily. Members gain instant access to trade leads, contacts, and credit background information of companies and manufacturers.
If you need help ideating your import/export venture before going to a big name company, take a Perfect Life Workshop for an intensive session with some of the most successful entrepreneurs in the country, and walk away with a golden business plan.
How Importing/Exporting Works In Practice
Let’s say you saw an opportunity to sell water purifiers (a hot market, by the way) on your own website or on eBay.
First, you would search for companies that manufacture, export, and/or supply various water purifier devices. (You can find more than 1,383 such selling leads posted to Alibaba.com.)
Next, you’d contact one or all of those companies for more information or a price quote.
Armed with this information, you could calculate your profit margin (the difference between the wholesale cost plus shipping and the retail sale price online). Then all you have to do is choose which manufacturer or supplier will give you the best product for the lowest price.
Voila! Instant profits.
While Brad Fallon made big bucks by buying deeply discounted products and reselling them online, you can also generate huge profits by selling those products to the wholesale market.
Li Ji Cun, for instance, started the Yantai Kaiyuan Metals & Machinery Co. Ltd. in 1996 to manufacture and export fire-fighting equipment (and other industrial products).
In 2003, Li heard about Alibaba.com and started using the trading platform. Li concluded that there were three main types of customers he could meet through the website: people new to his industry; people active in his industry but who have had bad experiences with suppliers; and wholesalers looking to buy directly from factories.
Li’s company quickly attracted two buyers: one from South America, the other from Europe. At first, they communicated through the Internet. Then came factory visits, resulting in hundreds of thousands of dollars in annual orders.
And Li’s company expects to export $4 million in goods this year.
There are thousands of categories and hundreds of products within each category – to import and resell or to sell to the wholesale market.
China, India, Thailand, Croatia, Brazil, and Russia are importing products from the U.S., Canada, Europe, and South America at record levels. In fact, imports to China from the U.S. increased by more than 28 percent in 2005, according to the Commerce Department.
Today’s Action Plan: The demand for products in developing countries has never been greater – and the trend is growing at a phenomenal rate. It’s a good time to investigate the opportunities that exist in the import/export markets. Importing products at deep discounts and selling them on the Internet – or to the wholesale market – are two simple ways to break into this business.