Selecting Products & Suppliers for Importing

Selecting the Right Products

  • Focus on Your Niche: Specializing in a particular product category increases your chances of success, especially when starting. Avoid being a generalist.
  • The Three E’s:
    • Experience: Leverage your existing knowledge from your employment history, family connections, or hobbies.
    • Education: Even without direct experience, you can educate yourself about a product and industry. Look for areas with readily available information.
    • Enthusiasm: Your passion for a product will drive your success. Choose something you’re excited about.
  • Assess Market Potential:
    • Demand: Research if there’s a viable market for the product in the United States. Consider economic, cultural, and other differences that might influence demand.
    • Competition: Analyze the existing competition. A market with many or a few dominant players might require a niche focus to succeed.

Connecting with Overseas Suppliers

  • Identify Promising Countries:
    • Product Availability: Research which countries produce and export the goods you want.
    • Cost Factors: Compare labor costs, exchange rates, and transportation expenses to find the most cost-effective sourcing location.
    • Business Environment: Consider factors like ease of doing business, familiarity with the country, language barriers, and the country’s level of development.
  • Locate Specific Suppliers:
    • Trade Publications: Subscribe to industry-specific catalogs and magazines listing suppliers and manufacturers.
    • Online Databases: Utilize resources like Kompass, WAND.com, and the World Network of Chambers of Commerce to search for suppliers by product or country.
    • Direct Contact: Reach out to foreign embassies, consulates, and trade commissions for assistance in finding suppliers.
  • Vet Your Supplier:
    • Reputation and Reliability: Request references from other US businesses that have worked with the supplier and verify their track record.
    • Financial Stability: Use services like the International Company Profile program to check the supplier’s financial health.
  • Request and Test Samples: Before committing to a purchase, obtain product samples to assess quality and suitability for the US market.

Hammering Out an Agreement

  • Formalize the Relationship: A written contract is crucial to avoid misunderstandings and ensure a smooth transaction, especially with cultural and language differences.
  • Key Contract Points:
    • Product Specifications: Detail the exact goods, including any required quality standards.
    • Pricing and Payment: Define the price, currency, exchange rate, and payment terms (e.g., letter of credit, sight draft).
    • Shipping and Delivery: Specify shipping terms (using INCOTERMS like FOB, CIF), delivery methods, and responsibilities for shipping costs and customs duties.
    • Sales and Marketing: Outline any territory restrictions, sales targets, and agreements on marketing and promotion.
    • Legal Protections: Include clauses regarding warranties, product liability, intellectual property rights, dispute resolution, and termination of the agreement.

Key Factors for Selecting Import/Export Products

When selecting a product for import/export, several key factors come into play:

  • Personal Connection: Do you like the product? Would you buy it yourself or recommend it to family and friends? A strong personal connection to the product can fuel your enthusiasm and make it easier to sell.
  • Experience: Your background and knowledge are invaluable. Choose a product category where your experience gives you an edge. This could stem from your employment history, family connections abroad, or even a hobby.
  • Market Demand: Research is crucial. Is there a need for your product in the target market? Analyze existing sales data and competitor offerings to understand market demand and potential challenges. Are there existing sales of similar products? This indicates an existing demand you can tap into.
  • Product Uniqueness: What sets your product apart? Unique features, like patents, superior quality, or cutting-edge technology, provide a competitive advantage. However, even without unique features, a well-executed marketing strategy can lead to success.
  • Product Adaptability: Can your product be modified to meet the target market’s needs and regulations? Factors like cultural preferences, climate, local regulations, and labeling requirements might necessitate product adaptation.
  • Competition: Who are your competitors, and how strong are they? A market flooded with competitors, especially large, established ones, might be challenging to enter. Consider focusing on a niche market within a larger market if dominated by a few large companies.
  • Profitability: Can you price the product competitively while ensuring a reasonable profit margin? Factor in all costs, including production, shipping, duties, and currency fluctuations, to determine a viable price point.

By carefully considering these factors, you can make informed decisions and increase your chances of success in the import/export market.