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How to Start Your Own Small Importation Business. It is Cheaper and Easier than you think!
Want to know how to start a small scale importation business in Africa? This article is packed full with valuable information for you!
The world is indeed becoming a smaller place. Who would have thought that ordinary people like you and I (who do not have a fat bank account) can now import goods directly from overseas suppliers?
Before I started researching the small scale business idea that I am about to share with you in this article, I thought international trade was reserved for the government and rich big importers who had strong connections with manufacturers and suppliers abroad.
Well, not any more.
This article reveals how small scale businessmen and entrepreneurs in Africa can become part of the import business with little capital investment. With the knowledge contained in this article, you too can import products at low wholesale prices and sell them for a much higher profit.
By the time you’re done reading this article, you’ll know everything you should to become an importer and international businessperson!
How the importation business works…
Before we get into the thick of this article, it’s important that we understand the basics of buying and selling.
How is money made in the ‘buy-and-sell’ business?
Simple; you buy something (wristwatches, for example) at a low price and sell them at a higher price to make a tidy profit.
To increase the size of profit you can make, there are basically two options you have. You can either find a way/place to buy wristwatches at a lower price or look for customers who will buy them at a higher price.
This is how everybody in the retail (buy-and-sell) business makes money (profit). Buy low, sell high. It’s simple math!
To make sure you understand the opportunity we’re about to share with you, we shall use a quick illustration:
Let’s assume you are the owner of a small business that sells foreign-made wristwatches. You have a small shop in which you display all your lovely wristwatches for customers to admire and possibly buy.
Because you can only afford to stock about one hundred wrist watches at a time, you have no option but to buy from big importers who, because of their large capital, can buy thousands of watches from foreign manufacturers at very low wholesale prices.
Although you would love to enjoy these low wholesale prices too (which will increase your profits), you don’t have the kind of capital the big importers have. Even if you could buy directly from the foreign product manufacturers, it would still be tough.
Most manufacturers and suppliers have a Minimum Order Quantity (MOQ) requirement. MOQ is the minimum quantity of products a supplier will sell to you in order to make a worthwhile profit. This is why they prefer to sell to the big importers who buy large volumes (container loads) of their products. Since you can only afford a few hundred watches, most of the big overseas suppliers won’t want do business with you.
As a result, you are stuck with the big importers. The profit you can make in your business is limited by whatever price they decide to fix on the imported goods.
The infographic below shows how the big importers act as ‘middlemen’ between you and the watch maker thereby reducing the profit potential of your business.
Thankfully, things have changed.
The internet has brought down the walls which used to restrict access to manufacturers located thousands of kilometers away. Improvements in transportation and logistics now make it possible for small businesses with little capital to import smaller amounts of stock at low shipping costs.
Finally, entrepreneurs and small businesses can enjoy the same low wholesale prices that the big importers have enjoyed for a very long time.
The illustration below shows how this new business opportunity cuts out the middleman and allows you to buy directly from foreign manufacturers at lower prices that allow you to make a larger profit.
Something you should know before we get started…
Many of the products and suppliers that shall be introduced to you in this article are made or based in China.
Although we shall also talk about products from the US and Europe, the tips in this article reveal more about buying products from Chinese manufacturers and suppliers. The most likely question on your mind right now would be: Why China? Good question.
I’ll tell you why.
As you may already know (or don’t know), most products in the world today are manufactured in Asia, particularly China. Toys, home appliances, accessories, computers, laptops, mobile phones and even Apple’s iPads are made in China.
Let’s try to verify this by doing a quick check of the products that are around you right now. You would be amazed that roughly 4 out of 5 things around you were manufactured in China.
I’d like to use myself as an example.
The laptop I am using to type these words is a HP Notebook made in China. The shirt I’m wearing, my earphones, my wrist watch and my iPad – all made in China. My mobile phone is probably the only thing that’s ‘Assembled in Brazil’. So the 4 out of 5 theory is true in my case!
Apart from food products, China is the Number One source of all the hot-selling and fast moving consumer products you know.
China is one of the cheapest manufacturers in the world because of its low labour and production costs. As a result, many of the big brands that you know (Apple, HP, Louis Vuitton etc) make their products through factories and contractors based in China.
To ensure the quality of their products are not compromised, US and European countries set very strict standards which the Chinese usually comply with.
Why am I telling you all this? It’s because many people in Africa have come to suspect Chinese products to be low quality.
While this may be true, I don’t think we should blame the Chinese. After all, China also produces many of the high quality products in America and Europe.
If our governments could enforce strict quality and safety standards for products coming into Africa, the Chinese would comply as they do for their clients in the USA and Europe.
However, you don’t have to worry about importing low quality products. In the later part of this article, I’ll share with you the secrets of finding high quality products and suppliers that meet US and European standards.
What do you need to get started?
To join the new and growing league of small business men and women who can now import products at low wholesale prices directly from overseas suppliers and manufacturers, you would need just the following:
A computer or mobile phone with access to the internet;
A valid email address
A valid and traceable home or office address in your country where the items you order will be shipped to.
A little money in your bank account. (We’ll talk about this a little later in this article)
Yes, you’re right, that’s all you need!
This means that you can shop for, order and import all the products you want to sell from the comfort of your bed, breakfast table or while you are sitting on a bus (via your mobile phone).
Please note that a P.O Box or PMB (Private Mail Bag) does not qualify as a valid and traceable address.
Let’s get started!
You should be excited to start your new and promising small-scale import business. But before you get on your computer or mobile phone to start shopping and ordering products, let’s walk you through eight of the most frequently asked questions.
By the time you’re doing reading these, you would know the best and most-trusted places to buy from, how to confirm the quality of products, the payment process and several more.
How much capital do I need to start?
As you will notice when you visit any of the websites we recommended, many of the products on sale are very cheap. Not all of them, but many of them sell at very low prices. In fact, the more units of a product you buy, the lower the price you pay; that’s the benefit of buying wholesale.
And don’t forget, the lower the price you pay, the higher the profits you can make.
You don’t need to break the bank or get into debt to start this business. As we always advise here on Smallstarter, start small!
Start with products that cost little but are in high demand in your area or country. Use this to test the viability of this business idea and grow your confidence.
For most of the products you import, you can make over 50 to 100% profit margins if you can find the right buyers to sell to. As you make some money in your new import business, you can start to try out other products that cost a little more.
Tip: Never let your excitement about this business get the better of you. Avoid the temptation to invest a lot of capital when you start out unless you already have ready buyers for your products.
Start small and then grow gradually. This strategy may take a little more time but it’s less risky and helps to build your experience and confidence.
