About IMPORT BUSINESS REFERENCE GUIDES will get you working like the pros in no time. These short topics are packed with links to valuable online research and data used every day by those in the import trade.
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 Top 10 Countries Exporting to the U.S. and Their Products
Let’s take a snapshot of the 2008 U.S. trade balance. Complete statistics can be found at the U.S. International Trade Commission by running the U.S. Trade Partner Report.
We’ve highlighted the top 10 trading partners exporting goods to the U.S., and have listed their top 5 product categories based on dollar volume. These listings can be helpful in narrowing the search for countries that are supplying a product category in large volume. For example, if you’re looking for a key exporting country for toys, furniture and footwear, look to China.
- Canada
a. Petroleum oil
b. Passenger motor vehicles
c. Turbojets and propellers parts
d. Plastics and packaging articles
e. Cell phones
- China
a. Cell phones
b. Computers and laptops
c. Toys
d. Furniture
e. Footwear
- Mexico
a. Televisions
b. Petroleum oil
c. Passenger motor vehicles
d. Computers
e. Medical and surgical appliances
- Japan
a. Passenger motor vehicles
b. Printing and copying machines
c. Televisions, video recorders
d. Medical and surgical appliances
e. Organic chemicals
- Germany
a. Passenger motor vehicles
b. Turbojets and propellers parts
c. Medical and surgical appliances
d. Cell phones
e. Pharmaceutical products
- United Kingdom
a. Petroleum oil
b. Turbojets and propellers parts
c. Pharmaceutical products
d. Passenger motor vehicles
e. Organic chemicals
- South Korea
a. Cell phones
b. Passenger motor vehicles
c. Machinery parts
d. Steel tubes and pipes
e. Petroleum oil
- France
a. Turbojets and propellers parts
b. Pharmaceuticals products
c. Helicopters, airplanes and satellites
d. Petroleum oil
e. Wine and other alcoholic beverages
- Saudi Arabia
a. Petroleum oil
b. Organic chemicals
c. Sulfur
d. Fertilizers
e. Inorganic chemicals
- Venezuela
a. Petroleum oil
b. Organic chemicals
c. Iron and steel
d. Sulfur
e. Inorganic chemicals
U.S. Businesses: Be Careful Whom You Trade With
If you operate your global trade business in the United States, you are prohibited from importing or exporting goods from certain countries or trading with certain business entities or individuals. These rules are maintained by the U.S. Customs and Border Protection agency.
As of March 2009, it is unlawful to conduct import or export trade with the following countries:
• Burma
• Cuba
• Iran
• Iraq (certain restrictions apply to trade with this country)
• North Korea
• Parts of Sudan
Along with these countries, the U.S. Department of the Treasury Office of Foreign Assets Control keeps a comprehensive list of persons or entities from many countries with which import/export trade is prohibited. While not all-inclusive, the Specially Designated Nationals (SDN) list is an extensive .pdf file with over 400 pages as of October 2009. Because the list includes known aliases among the alphabetical listings, use the .pdf search tool for a comprehensive search.
Restrictions and tariff treatments for all countries can be found on the U.S. Customs and Border Protection (CBP) website.
 Quotas – Is Your Imported Product Impacted?
An import quota controls the amount or volume of some items imported into the U.S. for a specific period of time. Quotas are established by the U.S. government to bring balance with our trading partners. Some quotas result in preferential treatment in which you will save duty fees, while other quotas may increase duties.
Three Types of Quotas
• Absolute quota: strictly limits the quantity of goods imported during a period of time.
• Tariff-rate quota: a specified quantity is permitted at a reduced rate of duty during the quota period. Once the quota limit is reached, goods will be entered at a higher rate of duty.
• Tariff preference level quotas: various types of handling based on legislation and trade agreements between the U.S. and the trading country.
Key Factors
Common products that are impacted by quotas include textile products of any kind, agricultural products, and products from certain countries. Once you know the product you will import, some quick research or a phone call to your customs broker will alert you to any quotas to be aware of.
Textile Quotas
All textile imports are governed by quotas. If you’re importing textile items, it’s wise to have a general understanding of the quotas that may impact you and your shipment. For example, in 2008, hosiery items from China reached 93% of the absolute quota limit. If your item may reach a quota limit, you’ll want to adjust the timing of your shipment to arrive before the limit is reached. As of June 2009, absolute quotas exist for textiles from China, Vietnam, Russia, and Ukraine.
Textiles are organized by a category number; with this number you can make sense of the vast array of reports and articles to see if your shipment may be impacted by quotas. Visit the International Trade Administration Office of Textiles and Apparel website for the category listing of apparel and textiles.
Other Quotas
The Customs and Border Protection (CBP) website also has a FAQs page to help determine what other types of goods are subject to quotas. The rules can be exhaustive, so save time by knowing your product HTS classification before digging in to the research. For a lesson on using the HTS classification tool, see The Import Channel’s topic “Find Products With Big Profits”.
Or make it easy on yourself, and call your customs broker.
Take 2 Minutes to Find the Best Country to Source Your Product
You’ve decided on a product to import. The next step is to locate suppliers. But where in the world do you start?
With a powerful (and free) online tool provided by the Office of Trade and Industry Information from the U.S. Department of Commerce, you can find trade statistics in a matter of minutes.
The excellent online interactive tool, known as TradeStats Express, provides statistical results based on your input of product, dollar volumes, and date ranges. You can also use this tool to review exports leaving the U.S. headed for other shores. It’s a fascinating and fun tool, and it provides global trade statistics with ease.
Let’s take the following example: you want to import cut flowers and want to find out which countries are major import sources based on dollar volume. Quick interaction using TradeStats Express (located at http://tse.export.gov/) gave us our answer.
In the TradeStats Express tool, we set the Product flow to “Imports” and changed the Product item to Harmonized System Code HS0603 for cut flowers. After setting our other display parameters we see the following chart:
It appears that the highest volume of imported cut flowers is arriving from Colombia. In 2008, U.S. businesses imported $501,552,000 from Colombia, while in second place was Ecuador, with $134,051,000. The Netherlands came in third, at $60,216,000. We can also see the five-year trend in Colombia’s import numbers is on the rise, while the Netherlands is seeing a loss of imported volume.
With these statistics on the cut-flower trade, we can quickly determine which country to focus our energies in for sourcing suppliers.
Along with dollar-volume trends, it’s also important to understand trade and political relationships between the U.S. and the source country. Temporary embargoes are put in place from time to time by the U.S. government, resulting in additional duties on goods arriving from certain locations. Quotas may also be in place, preventing some product categories from being imported after a certain volume is reached. Textiles and garments are often subject to quotas. A quick conversation with your customs broker will give you some direction on quotas and embargoes for your particular product or country.
A wealth of information is available online for U.S. imports at the U.S. Department of Commerce International Trade Administration, most of it at no cost.
 An example big-profit category: floral stems With Free Online Tools, Find the Most Profitable Products to Import
Want to know how much profit there is on those items made overseas? With a little research using free online tools, you can review the average price per unit of goods being imported into the U.S. We’ll show you how to quickly find a product’s classification code so you can review powerful importing statistics.
We’ll use the fresh-cut floral industry for our research. Roses are popular, but how are their profits compared to other varieties of flowers, such as chrysanthemums. Let’s look at the two simple steps to quickly compare the two varieties and determine the average import value per stem for each. We can also see trends in pricing and import quantities.
Let’s Get Started
Step 1: Determine the Harmonized Tariff Schedule (HTS) Classification
First we need to determine the classification code for our products. The United States Harmonized Tariff Schedule contains all the classification codes for goods imported into the U.S. This number is also used to assess duties upon importing. (Note: While this tool is useful for research, it’s recommended you work with a customs agent to provide a final determination of your product’s HTS classification. The discipline of assessing a classification code is complex and takes years of experience to master.)
We go to the United States Harmonized Tariff Schedule website. We enter the first search term “roses” to capture the HTS number, then enter the second search term “chrysanthemums” to capture the second HTS number:
0603.11.0010 – Sweetheart roses
0603.14.0010 – Pom pom chrysanthemums
With these two cut-flower variety classifications known, we can now look at the import trade statistics.
Step 2: Find Trade Data for a Specific Product
The U.S. International Trade Commission website has a wealth of statistical data that can help you explore any product you may consider importing. Best of all, it’s free to use once you set up a user account. Then proceed to use the trade data tool.
We enter our classification numbers and request data on value and quantities, giving us the average price per unit (before duties and custom fees are applied). Here are our results:
Roses: U.S. import average price per stem
2008 – US$0.147 per stem
2007 – US$0.136 per stem
Pom pom chrysanthemums: U.S. import average price per stem
2008 – US$0.135 per stem
2007 – US$0.136 per stem
What We Conclude From These Statistics
Roses: There is substantial gross profit margin between the retail price per stem we see in the U.S. versus the average price per stem paid by flower importers. A bouquet of a dozen roses on 1-800-Flowers.com sells for $59.99 (including the glass vase), while we find the average price per rose stem of just under 15 cents, or $1.76 per dozen before duties. We also see the average per-stem price is on the rise, increasing 8.60% from 2007 to 2008.
Chrysanthemums: A check at our local grocery store floral stand shows pom pom chrysanthemum stems are selling at $2.99 per stem. To order these through a florist will be much higher. We see the average imported price running 13.5 cents per stem. Again, a nice gross profit margin. However the trend on pricing from 2007 to 2008 is on the decline, although not by much, decreasing by 0.60%.
Even with a substantially lower gross margin per stem than roses, the chrysanthemum is often used in all types of floral arrangements throughout the year. While roses see a sharp sales spike for Valentine’s Day and Mother’s Day in the U.S., the chrysanthemum sells in bouquets consistently throughout the year.
Do-it-yourself Research Along With a Professional’s Input
Conduct preliminary research online with these free resources to narrow down the product categories of interest to you. Once you know the product to import, contact a customs broker and ask that your findings be validated. The broker will become your partner in global trade, and will provide ongoing information about trends, regulation changes, and other important issues that will make a difference on your bottom line.
 Customs Brokers – Partners for Success
Every product you import into the United States needs to be identified with a tariff classification number. The tariff classification indicates the duty rate you will pay. The classification is also used to review the country of origin, along with the product type, to see if the item is impacted by any quotas or embargoes. Determining the proper tariff number is not an easy task and is best left to a professional who is knowledgeable in this discipline — the customs broker.
Once you have done some preliminary research and know the product you are importing based on profitability, and the country with which you intend to import from, you’re ready to find a customs broker.
Refer to the U.S. Customs and Border Protection (CBP) website to locate a broker. This page provides a listing of all U.S. ports sorted by state. Click Trade in the top bar; then click Locate a Port of Entry under Resources. Select a state, and then a city, and the resulting page will include key port information and key contacts. You will see a link “Brokers: View List” which will give you a great starting point.
In a quick phone call to a customs broker, you can explain which item you intend to import, give a description of the materials made in manufacturing the item, and name the country you intend to import from. The broker will assist you in narrowing down a tariff number with relative ease, and there is typically no charge for this phone call.
Customs brokers look up tariff classifications all day long. If they have a relationship established with a business, answering a question like this is quick and part of the service they provide their clients. If you are new to importing, most brokers will gladly assist in your early education for no charge; they see it as an investment to gain your future business.
Import duties, quotas, and embargoes can change from time to time and can have a big impact on how you negotiate your offshore buying price, as well as how to set your selling price. This step should not be overlooked and should be completed before you begin contacting manufacturers — or certainly before you begin negotiating your buy price.
 Is It Possible To Start an Importing Business Without Quitting the Day Job?
With the internet giving us instant access to anyone on the other side of the globe via email, chat, and Skype, starting a global trading business has never been quicker and easier.
Any new business takes a commitment of time and start-up money. But an importer’s hours can certainly be spent after a day’s wage has been earned with an existing job. You don’t have to quit your day job to lay the groundwork for a small importing business. Many global suppliers are located on the other side of the world, and their work day is beginning after your commute home from your job. The day-to-day timing element couldn’t be a better fit.
Whether you are at a crossroads in your career, have concerns about the stability of your job with your employer, or are finishing school, owning your own business in global trade is very realistic with a minimal investment. This is a relationships business. People connecting with people, understanding what the market needs, and knowing where to source products overseas are keys to success as an importer.
What You Don’t Need to Start an Importing Business
- You don’t need to quit your day job. You are communicating at any hour of the day and moving goods with the help of key partners, such as customs brokers and warehouse personnel. All this can be done online or via phone without your personal presence.
- You don’t need a lot of start-up capital. Successful importing companies have long enjoyed sizeable profits operating as small businesses with small staff.
- You don’t need office space. A desktop and computer connection is where you’ll spend most of your time. This could be in your home, a small executive suite, or a coffee house providing wireless internet connectivity.
- You don’t need to sign a long-term lease for a storefront. You can market your goods and reach your customers with a modest website built on Yahoo for a minimum cost.
- You don’t need to commit to large warehouse space, or even give up space in the guest bedroom to store your inventory. You can have a third party logistics vendor handle all your warehousing and fulfillment from another state. You never need to see your product if you wish!
What You Do Need to Start an Importing Business
- A drive to own and grow your own small business.
- An internet connection and computer for communication and marketing your company.
- A desire to play a key role in helping your global partners succeed in their business.
- A curiosity to know what’s new in the marketplace, and excitement in discovering new trends and products before the rest of the world.
- A relationship with a customer base that is looking for new, innovative products.
- Enough capital to meet the minimums of the initial purchase order your supplier requires. This may be a smaller investment than you’d expect.
You can get a solid foundation built for your importing business without quitting your day job and finding large investors. You’ll be in complete control.
 Gain Control of When and Where You Work, and How Much Money You Make
Buy at the lowest offshore price. Sell direct to the consumer at full retail. Or discover a niche somewhere in between. When operating an importing business, you are in complete control of when you work, where you connect, and how much money you make.
Importers are in an excellent position in the supply chain. Manufacturers depend on the importer to develop markets for their items, and retailers look to importers for the latest and greatest gadget and trends coming from overseas. The importer can buy at the lowest cost, and sell at the highest price.
Every season retailers asks “What’s new?” They need to keep inventory fresh and exciting for their customers. An importer has first access to items coming into the market. This knowledge makes him a valuable partner in the retailer’s success.
The offshore manufacturer needs to receive purchase orders from new customers to grow his business. He depends on the importer’s knowledge of sales trends and distribution channels in worldwide economies other than his own, and to help sell his goods into these markets.
Importers have mastered the art of sourcing, shipping, and distributing products across borders. They enjoy a lifestyle that includes travel to exotic destinations (while writing off travel costs), finding the latest products from eager manufacturers, and many ways to make money. A small minimum order of US$2,000 could conceivably gross nearly US$9,000 in sales revenue if sold direct to consumers on a website. How is this possible? It’s the magic of straddling several distribution points in the supply chain.
Importing is a relationship business on a global scale. Some start an importing business because of a desire to travel, or love of a product. Others start because family or friends living abroad can be trusted to help with initial sourcing of goods. And others shift from employee status to business owner, building their dream from the ground up.
The profitability in importing is limitless, and the opportunities are as vast as the world itself. Realize the highest profit margins selling imported items direct to consumers on the internet. Or act as an importing agent bringing buyers and sellers together, where commissions are paid on the deal without ever taking title to the goods.
Realize how easy it is to build a global business with today’s internet, voice, and Skype technologies. Weigh the investment of time and cost with the reward of more control, more money, and business ownership satisfaction. Then answer for yourself, “Is Importing for Me?”
>> Get started now! Select the reference guides from the list located under REFERENCE GUIDES in the right column.
We’re giving you the key to uncovering trade secrets in the importing industry. The Import Channel IMPORT BUSINESS REFERENCE GUIDES are written for quick reading, so you can get back to doing business. The short topics are loaded with links to dozens of crucial sites that professional U.S. importers and customs brokers depend on every day to be successful. These FREE guides will have you working like the pros in no time.
Whether you are an established business owner looking to source products from overseas, or exploring the importing trade as a new business, the reference guides provide the basic answers used daily by everyone in this global industry.
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