5 Ways To Improve Your Import-Export Business Now
As an importer and exporter, your business is subject to the ebb and flow of global consumer sentiment and geo-national politics. It’s stressful and difficult enough to watch out for global headwinds and to keep an eye on your import-export business as well. Not to fear, here are 5 tips you can use to improve your trading business right now.
On a side note, we wrote about surviving your first year as a wholesale business as well. While the blog post was geared towards wholesale and distributions companies, the very same tips and tricks can be applied to importers and exporters as well. Continuously review and tweak your marketing strategy. And consider sales channels such as drop shipping.
1. Run on Global Time
Your import-export business runs 24/7. But you work 8-12 hour days. While you’re sleeping, the rest of the world is waking up to another day and business continues at a steady pace. As a small business owner, you know that having the “right stuff” or the right attitude towards your suppliers and buyers is critical. You work for them and not the other way around.
With the correct attitude in place, you need to organize your business workflow and tasks to reflect this. It can start with something simple that you see in every television newsroom broadcast. Buy a bunch of cheap wall clocks and line them up on your office wall. One clock for each country. This emphasizes that the rest of the world is ticking. And it looks cool.
Secondly, you need to run your business and workflows in the cloud. Nobody uses fax machines anymore (well, except in Japan). So dump analog and asynchronous means of communication and make yourself readily available to your suppliers and customers. This means installing and using whatever chat or messaging apps they are using.
Follow What Your Customers and Suppliers Use
In China, this means using the WeChat mobile app. For the States, it might mean Facebook Messenger. In Japan and South Korea, it’s the LINE messaging app. And for Europe and South-East Asia, it’s definitely WhatsApp. Your mobile app screen will be crowded but until there is a single chat standard, you’ll have to make yourself dispensable.
And with all these chat and messaging apps in place, you’ll quickly find that you don’t need to depend on good ‘ol email anymore. In fact, email is starting to look a little stale when you can directly message your recipient and see their status online. Attachments and photos are no problem at all.
And in the possible event that you need to speak to clarify some business points, or even catch up and say hello, these apps let you make voice calls for free. Heck, throw in a video call if you’re into that sort of thing. Just remember to floss your teeth and check your hair before the call.
2. Understand Different Cultures
Nowadays it’s not enough to just keep track of different time zones. If you’re already dealing with different countries in your business, you probably have a good idea of the cultural nuances of each. Take the effort to understand each country’s culture in a deeper way, and pick up a few words in the process! A little goes a long way in building the relationship.
In Japan, for example, it’s best not to bring Western standards in negotiation to the table. Aggression, shouting and banging on the table means an instant loss of face and respect for you. A polite bow and exchange of business cards are much preferred over a firm grab-and-grip handshake and a stare in the eye. Any form of physical contact is generally shunned.
And in Japan and parts of Asia, it’s true that more decision-making insights are revealed over post-work drinks and a round of karaoke. In fact, entertainment and social activities such as golf are part and parcel of doing business in these countries. Formal meetings in the office tend not to be conclusive or merely just motions to go through.
Your Business Card Represents You
And like the rest of Asia, your business card is an extension of you. Present your business card with two hands. Likewise, receive another’s card with two hands and take your time to read and study it. Don’t immediately put it in your pocket or wallet. Place the card in front of you and glance at it from time to time. Treat it with respect.
If you’re communicating with a place like Australia and New Zealand, take the time to read up on their local politics and sport. These two topics dominate local and national news. It’s not just all work there. They pride themselves on life and interests outside the office, too. Be sure to weave in some banter and chat about what you did for the weekend and what you plan for the next one!
Or, if you’re lucky to deal with tropical islands like Indonesia, Thailand and the Philippines, do remember the concept of island time. Not everything gets done on time despite the presence of contracts. Rather than to chase them incessantly to complete orders or make a buying decision, it’s far better to buffer in a week or two in your anticipated schedule.
3. Manage Multiple Currencies
It’s a given that you’re dealing in multiple currencies in your import-export business. It’s possible but very challenging to deal with different currencies if you’re still using paper or spreadsheets in your business. One good reason to use a software solution is to manage multiple currencies for your customers, suppliers, sales and financial reports.
Inventory management software such as EMERGE App allows you to use as many currencies as you need in your business. All international currencies are supported with the exception of cryptocurrencies! Define all the currency pairs that you need along with the exchange rate that you wish to use.
You’ll also need to define the default home currency of your business. This is the currency used by your business. And later on, you’ll see that this default currency will be used to report your financial figures. Be careful when you choose your home currency because you can’t change it later on. It’ll cause a lot of issues with reporting if you do.
For customers and suppliers, you can define their default currency easily by selecting them and editing the currency. To deal with product prices, specify different currencies in their price lists. And for sales and purchases orders, it’s easy to select the currency of the order from a drop-down list.
Finally, when it comes to financial reporting time, EMERGE App makes it easy to report all your transactions in foreign currency. By default, the software will convert all international currencies to your default currency based on the exchange rate that you established earlier on. These converted figures will be used for your financial reports.
4. Expedite Operational Workflow
Automate Where Possible
Another good reason to use inventory management software is to introduce efficiencies into your operational workflow wherever possible. Why calculate landed costs or CBM manually when your software should do it for you? This is why DIY solutions such as spreadsheets don’t really address the technology issue. You’re simply digitizing a manual process.
For exporters, calculating CBM and printing packing lists are a necessary but tedious step in the shipping process. EMERGE App lets you enter the packing dimensions of your products. It then automatically tabulates their weight and CBM for your packing lists. If you have additional units of measurements, you can apply different packing dimensions to them.
Use Time-Saving Shortcuts
It should also come with clever time-saving tips and tricks built-in so that you can focus on running your business and not mastering the software. In the past, it was acceptable or even expected that you would mold your business processes to software. This used to be called business process re-engineering. Thankfully, software today should fit your business and not the other way around.
Use barcode technology to dispatch your products before shipping them out. This means a faster and more accurate workflow. Use a barcode reader to scan the products in a shipment. The quantity in the order will increase by one if it matches the product. The best part is when you finally deliver the shipment, EMERGE App will automatically adjust the in-stock quantity in your warehouse.
And importers and exporters are likely to have multiple warehouses in different locations or even different countries. This helps to expedite orders as well as geographical convenience to receive stock and ship out orders. Just define as many warehouses as you need in EMERGE App. Then select the warehouses to receive stock for purchase orders or to ship out orders.
Keeping an eye on your stock between different warehouses is easy as well. You can generate inventory movement reports and inventory list reports in EMERGE App. An inventory list report will list all the stock in the selected location, their total quantity, and their total landed and non-landed values. The inventory movement report will show your incoming and outgoing stock movements in all of your warehouse locations.
5. Keep an Eye on Cash Flow
Cash flow is the bane of any business, whether small or large. But as you know, for those doing international trade the risks are magnified. It may take months between purchasing goods overseas and converting them to sales, and thus cash, in your various markets. And during this time you will incur import-related expenses upfront that needs to be paid now.
Thus a good part of expediting and making this import process efficient is to reduce the time to market. The shorter the time to import goods, clear customs and enter your warehouse, the faster you can sell and convert them to cash. This means reviewing your sourcing methods and reducing the time your stock spends on ships, trucks, and warehouses.
Some Ways to Speed to Market
One way is to start in the very beginning by using suppliers and manufacturers that you can trust to deliver on time, every time. This means sourcing them from trade portals or overseas trade exhibitions. You would have no doubt placed a few sample orders and perhaps a few more full orders to gauge their reliability. Narrow them down and remember to have stand-by suppliers!
A second way is to use the services of a third party to check for quality control. Often they will be able to spot issues well before they are shipped out from the factory. This saves you the hassle of disputes, unnecessary returns and exchanges, and disappointments at the receiving dock. This is valuable if you can’t be at the origin country to check on shipments.
Similar to quality control inspectors, you may consider engaging a customs broker to expedite your imports through customs. Misidentified classifications or insufficient documentation can mean unnecessary delays while your goods sit in a bonded warehouse. And you’ll be slapped with daily warehousing charges. Plus, depending on your type of goods you may need to deal with several government agencies to clear your imports.
Finally, you can reduce some of the shipping costs by using your own freight forwarder. Generally, it’s convenient to rely on your suppliers to ship the goods out to you. However, be aware of general shipping terms such as CIF and so on. Know who is responsible for what and where their responsibilities stop. Hidden import costs can add up and take a hit on profit margin even before you sell your goods.
It’s easy to implement any or all of these tips for import-export businesses. Some don’t require any investment of time or money. But picking the right software to run your import-export business is critical. Use the software’s time-saving and clever tips to improve your operations and manage risks elsewhere in your business.