Comment by hluska | Hacker News Reader

Comment by hluska | Hacker News Reader

Hi there...

I started an import based company right out of University. It was perhaps the greatest learning experience of my life, so I might be able to provide some insight.

This part of your question causes me some concern:

> How do I start doing this? I just want to export/import large amounts of whole sale products, it doesn't really matter what the product is, but I don't know where to start.

The specific part that concerns me is that you say 'it doesn't really matter what the product is.' If I were you, I would start off by focusing on a general sector (if not one particular product). The problem with being too general is that you end up diluting your research time between a large number of different kinds of products. Starting an import/export company is about research.

> How do I get in contact with Chinese manufactures and people overseas? Are there any sites that I should check out in particular?

Alibaba is the 'correct' answer to your second question, but I will warn you - that site is full of con artists, so your research has to be spot on. A personal introduction from someone you completely trust is the absolute best way to get in contact with a manufacturer.

So how do you go about selling the stuff? I have set up a small online store, and have been selling on facebook. However, it is very small scale. Do you have any tips to scale a import/export business?

Forgive my dalliance into Shakespeare, but there lies the rub...

There are really three ways to scale a business of this sort - become a distributor with a whole lot of (small) retail clients, become a supplier to one or two large retail clients or become a supplier to a major distributor.

The problem with becoming a distributor is that the kinds of retailers you want to work with will naturally be skeptical of another distributor that gets stuff from China and tries to sell it in North America. There is an intense country of origin bias against China, so to serve really solid retailers, you are going to have to offer wonderful terms. For example, when you start a relationship with a smart (small) retailer, they are going to want generous credit terms, they will want you to pick up shipping, and they will want to know they can return anything they don't sell (at any time and in any condition) on your dime. Ultimately, it ends up looking like a consignment deal, only your margin won't be as high.

If you want to serve one or two large retail chains, you are going to have to spend big marketing dollars to reach them. Then, they are going to tell you how to run your business, how to set up your systems, how much to charge, and when you are getting paid. The last one is critical because large retailers know they are in charge of the relationship - they will pay you when they feel like. If you are a single SKU supplier, you will be the last one to get paid - if you have to go into debt to buy your stock, you can easily lose money because your margin likely won't be much higher than the interest you pay.

If you want to become a supplier to a distributor, you need a very compelling product. Distributors are tremendously smart and they have already thought about importing your product directly. Your prices/quality have to be good enough to justify going through a middleman (and not sourcing it directly, with all of their contacts to help out).

As a general rule, I would rather perform open heart surgery on myself with a spoon than work with large retailers. And frankly, going after distributors eats up a whole lot of time/marketing dollars. Consequently, the small retailer option is best, though they are still a very difficult group to reach.

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