Importing and exporting can be a very lucrative business to operate. For starters, this is one business that requires very little startup capital. You need to invest in a few basics, like a good training program, a website, office supplies, a computer, phone and an internet connection. Aside from that, you do not have to buy promotional or sample products, stock or warehouse any merchandise, nor do you need a large commercial office space. Many import export business people keep their business in their home to help keep costs down.
Now that you know the investment and operating fees are relatively small, let's look at a few methods of earning income as a trade broker. First, the most common way is to work as a commissioned agent. You represent a buyer or seller or both, negotiate the transaction, then receive a commission for your work. Make sure that you have a signed agreement in place that defines the business relationship, commission agreement and payment terms. For example, Jim has a buyer who wants to purchase 1,000 touch-screen tablets for $150.00 per unit. He has a source in China where he can get the tablets for $125.00. He makes a profit of $25.00 per unit, at 1,000 units, he earns a commission of $25,000.00. In another example, Karen has an American maker of a baby carrier product. She finds a Korean distributor who wants to buy the product at $10.00 per unit and they wish to purchase 2,000 units. The manufacturer will sell them for $8.00 each. Karen earns $2.00 per unit, and at 2,000 units, she just made a commission of $4,000.00 As you can see, the commission will vary depending on the product price.
The second way a trade broker or agent can earn income is by negotiating professional services. Perhaps your client who just ordered those touch-tablets needs a warehousing contract. You get with the owner of a warehouse, negotiate the contract and you may earn a flat fee, hourly rate, or a percentage of the contract. You can also negotiate a freight forwarding contract, and draft documents as well. Mary represents an American manufacturer that has never exported before, and they have a new contract to sell to a buyer in Latin America. She locates several freight forwarders and receives quotes for a one year contract. They choose a forwarder and Mary received an 8% commission for neotiating that contract. Her commission fee is $4500.00.
Another way the international broker can earn money is by offering to represent a client at trade shows or trade fairs. Many small businesses do not have the staff nor the time to attend shows, either foreign or domestic. Agents can work an arrangement to where they will attend the shows on behalf of the manufacturer while the manufacturer pays travel and related expenses. The agent can charge an hourly rate or work out a flat rate. One trade broker does this with wine. If an overseas winery wants to participate in a U.S. based wine show, she imports the sample, the wine maker pays her travel and expenses and she charges $500 per day for representation.
An import export professional can make money by offering consulting services. Most professional consultants earn $50 - $150 per hour. Get paid to help develop marketing plans, export management plans and systems, or train key personnel within the organization.
There are many ways for a broker or agent to earn income - just find a need and fill it!
copyright 2012, Import Export Institute