Export-Import business is a worldwide business. And when you are ready to start, there are too many options will stand in your way.
Where to start, how to get fund, how to source product, where to find buyers etc.
There are some liabilities that are a little bit hard to maintain as an exporter or importer.
But if you are just getting started in the international business journey, becoming an export-import agent can be a great starting point. It helps you to get understand the entire foreign trade before you become a direct exporter.
I am going to share the whole picture of International Export-Import Agency Business.
What is Export-Import agent or broker?
The Definition and Meaning:
An agent is who play a role as an intermediary person between exporter and importer. He is the matchmaker of both parties to make the deal.
When an exporter is unable to find a buyer or an importer looking for a reliable supplier for goods, the agent arrange a buyer for the exporter and supplier for the importer
He links up the buyer and seller, negotiate the deal and get his commission. The agent makes this procedure very easy way.
How many types of export-import agent in international trading?
Well, there are three types of Export-Import Broker you can learn to become.
1. Sales Broker or Commission agent.
A commission agent introduces a buyer to a seller to make a deal and take the commission for any future sale.
A commission agent interferes between buyers and seller who want to make a trade but they don’t have sufficient experience of the international trade, like in which term to purchase the goods, what would be the best method of payment. How the goods need to be delivered to the buyer. What would be custom clearance procedures?
This is where an agent becomes the valuable middleman and he is able to make the transaction in a possible way and then he gets his commission from both parties.
2. Overseas Company agent:
An overseas company agent does not act like as the commission agent instead he is appointed directly by an overseas company. When a buyer intending to purchase goods from an overseas country, it seems like a suspicious understanding for the first time.
Like what if the supplier sends him an obsolete product that doesn’t match with the samples.
What if he doesn’t send the goods after the made the advance payment.
There are lots of suspicious thought came into the buyer’s mind. That’s why he appointed an agent person to check the product and make a convenience deal for him. This agent work for a buyer either for a commission basis or salary system.
3. Stockist Agent or Buying Agent:
A stockist agent is alike semi exporter or importer. He purchased the commodities from a seller and stock the product on a wirehouse. Then he finds either an international buyer or regional buyer anybody, he sells the goods.
The buying agent is not recommended for them who just starting out in export-import business. Because it requires a depth knowledge of the entire International business from start to finish and requires much investment to proceed.
Is there any license to be obtained to become an agent?
An agent or broker neither export the goods nor import the goods himself. He works as a broker for importer and exporter. So you don’t need to obtain an export-import license to become an export agent.
If you want to operate this business from an office, then you need just only a trade license. Otherwise, if you can operate this job from your home, you don’t need any license to proceed.
What is the exact job of a Broker? What do they do?
To operate an agency business, it’s not just the cheap options that you are thinking of. To play the best game on this platform, you need to concern to many things.
Becoming a successful international broker, you need to be focused, hardworking mentality, acting like a tangible person with time and dedication. Starting an agency business can take effort and need to be stable in all situation.
Although, if you are very passionate to become, then these roles you should maintain and keep in-depth of your mind.
The role of an export-import agent in international trading:
#1 Deliver Accurate Product Information:
You must learn to get all the detail of the product that you are working for. All information should be at beside of you hands.
When there is a query of the product and you are delaying to provide the information, you could get rejected and could be lost your reputation.
Study about the product where it produced or manufactured the most, Various quality, Production cost, and selling price, etc.
Share the information to your buyer before he got this from somewhere else.
#2 Understand the whole international business:
You must have a piece of depth knowledge about the whole international trading procedures. If you couldn’t provide the right information or satisfied details to your party, then you may get ignored.
Since most of the buyer and seller find an agent because they don’t fully understand the whole procedure of foreign trade.
From purchase contract to deliver the goods to the destination country, you must act there as a constant person.
#3 Be an expert on negotiation skill:
The most interesting part of the export-import business is price negotiation.
There is no fixed price for goods in foreign trade. Prices are rising up and down every day because of International economic fluctuations. So you should help them to negotiate the price in a reasonable manner and set the payment method between buyer and seller as much as the tangible condition.
Don’t be biased by any party. Supporting to one-sided only could not get you to the forward.
So you should always master the negotiation skill thoroughly to make every deal confirmed in a convenient way for them.
#4 Provide great communication:
When you start communicating with the buyer or seller, you should provide a very concrete personality of yourself.
Like you are at home and doing your homework, you should not express him your homework situation or just cut the phone and talk when you are actually free time.
You must earn the business value of yourself before you earn your commission.
Provide the same information between the buyer and seller about what you know for the deal. What buyer told you, provide the exact information to the seller. Negotiate them but don’t force them to be compelled.
The role of an agent is the whole responsibility between buyer and seller of behalf of them. You can’t think to operate the business by just working a few hours from your home in the evening.
Why do people need an agent?
There are many circumstances or situation come into the foreign trade that people always struggle.
When a startup buyer is unable to find a reliable seller to import goods or an exporter could not get a buyer for his product from a couple of months, they seek help from others to move forward. They are unable to make deals not because they are not interested anymore but they are inadequate for lack of proper knowledge or faith on overseas traders or could not handle all the situation at all.
A sales agent or broker came to this middle section between them and provide a convenient service to create an opportunity for trade.
Nowadays people couldn’t ignore the need for a sales agent that provide more value to their business. People delegate an agent to save the travel expenses to the abroad visiting or participating in a Trade fair or conference to find buyers.
Advantage of an agent is that they sell or buy products without any extra expenditure.
- A sales agent furnishes better result because they are more experienced than the exporter or importer. They help small business to export their goods in a beneficial way.
- An agent already has too many established connections with potential buyers or sellers, so it saves time for the exporter or importer to find themselves.
- Many companies figure out that hiring an agent expanded their businesses nearly 70% than they do by themselves.
In many ways, people recruit an agent to reduce the risk of a trade.
Why becoming an International trading agent are great to start rather than direct export?
As I told you that export-import business is a wild business. It scattered its wings internationally across the world. When you are very serious about to start, you find the way very risky and a strong capital base.
That’s why becoming a trading agent could reduce the capital risk for your start-up.
- It does not force you to export directly or it does not need a huge investment to begin.
- It’s like playing the football of exporter and importer and shot the ball to the goal post.
- You don’t need to go to the field to source the product. You can just do this from your computer.
- You don’t need to invest the capital. You just take the commission from them.
- its a risk-free option for you than doing business directly.
Everyone who wishes to start the export-import business, starting a trading agency business can be a great startup point.
What are the steps to becoming an agent?
Now I am sharing you about how to become an import-export sales broker step by step.
Here is 11 simple guide to becoming a successful International Trading Agent.
#1 Get a license:
Becoming an agent does not require an export-import license though, but if you are willing to operate this agency business from an office, then you need to obtain a local business permit which calls trade license.
#2 Set a computer with an internet connection:
In these days, you can’t go forward in any business without using the internet. And, in the agency business, you must have proper knowledge of how to use the internet, send mail, online profile making, etc. All the task should be done online.
#3 Get product knowledge:
You should have sufficient information about the product you are working with. If you are unable to provide accurate information of the product to the buyer for the first time, the buyer treats you as an inexperienced broker or a fake person.
To get rid of that situation, you must study well about the product before proceed.
#4 make your Agency website:
As you are starting up the business, you first create a website of your company to let know the buyer and seller about your presence in foreign trade as an agent. Having a website become a compulsory thing to exist in the export world.
It doesn’t matter how good your now or how much you’re knowledgable about international trade if you don’t have your website, your value becomes obsolete.
And your website should be enriched with your company character details including the product information which you are trading with.
#5: Mark Your Business operating Boundary:
First, think that in which countries you are intending to work with. Are you willing to operate in the whole world or in your nearest country?
Set your limits in which boundary you want to serve your business.
If you’re starting out, it’s recommended that you should work within your region or in a neighbor country. As you grew up by the time, you can start to look at a broad network.
#6 Build your buyer-seller database:
Now its time to find the buyer and seller for yourself before they find themselves.
Find some manufacturer or supplier first. Collect their contact and save them in a database. Organize them by product category and list their product into your website.
Now find some buyer as much as you can. Collect their contact address and save them in your database. As much as you can build your database, your business will grow up according to it.
#7 present the buyer to the seller:
Now call the buyer or email them and give them your proposal. or establish any marketing strategy to reach out to the buyer. If they interested in the product you presented, forward this to the specific supplier.
#8 Show the samples first:
It’s much harder to sell a product without showing up the product sample. The buyer wants to check the quality of the product. So, manage a sample from your supplier for free of cost or by charge.
#9 set a meeting for the buyer and the seller:
When everything is pitched up with the buyer and the seller, then its time to set a meeting for them. If you bring them together in a place to finalizing the deal, that means you won the game.
#10 Convince the buyer:
You can’t get commission until you make a sale however you did the hard work to find a buyer. You must convince the buyer to make a successful sale in a reasonable way.
As I told earlier that there is no fixed priced product in the entire international business. Negotiate happens from both parties.
Negotiate the deal in a rightful manner that both can get the benefit. you’ll need to learn to negotiate with exporter and importer, you certainly must understand how to trade on an international level.
How much an agent earn?
International sales agent commission rate and fees:
An export agent in international trade usually earns their commission a maximum of 5% of the FOB value of the goods after the final payment.
The agent either get a commission from the buyer or the supplier or from both of them.
So whenever you are working as an agent, your earning depends on how many deals you have made. If you are great at convincing the buyer, you can make more and more earnings.
Can I be an agent alongside a full-time job?
Agency is not a job that’s not required being timed. As I discussed the type of Export-Import Agent, you can choose the option according to your situation.
If you really desire to become an export-import agent, it will take time and effort to build relationships with buyers and sellers,
And most of all I could say, YES can do it by having a fulltime job. But you must show the full responsibility to the buyer and the seller.
You need to understand the circumstances and the deadline that the buyer provides you.
You will face problems in your way and you should have the ability to solve these problems quickly and efficiently. And according to it, you need to follow the whole procedure. If you can provide, then you can do it.
Understand the day to day task of an agent. When will you contact the seller, and when you should provide the details to the buyer. When will you meet them if there is an urgency for the product?
If you handle this while on a full-time job, then you can run this business with a robust profit margin.
So I have discussed here all the possibilities to become an Export agent. If you master all the options surely climbed the success from the bottom all the way to the very top.
It’s not an overnight success. You need to know all the process of export-import business.
What do you think? Is it shows you a clear path to become a Trading Agent?