Importing is profitable. However, the Global Village is overrun with swindlers and firms offering unprofitable export opportunities. Before you start importing anything, learn the basics to the business. Otherwise, your expected profits will turn into paving stones to the poorhouse.
There are three rules that lead to profits.
1. Buy at the source. If you fail to follow this rule, you are paying too much for whatever you are importing. If you don't know the source of what you want to import, you don't know enough about the product to import it.
2. Meet the exporter before buying whatever from him or her. This means visiting their plant or source of exports. It costs money to travel, but the meeting gives you insurance against outright fraud. If you can't follow this rule, then start small. Risk less than a thousand dollars until you are certain that your exporter is reliable.
3. Importers are often given 90 to 180 days to sell the imported items before they must pay for the goods. The idea is to pay for the goods from the sale of those goods to your buyers. You should try to lineup your buyers before the shipment arrives.
The Two Common Internet Import Scams
1. The spam reads something like this. "We're an exporter. We want to reduce our taxes and so we want you to accept payment from our clients on our behalf. We'll pay you 10% of the money you collect for us and send to us." If this offer were real, the pigeon would probably be liable for taxes on the entire transaction. The fact is exporters have numerous legal tactics to manage national taxes. The truth is the exporter is a swindler seeking to gain access to your bank account and relieve it of all of its deposits.
2. The spam reads something like this. "We're an exporter. We want you to be our agent and earn 10% working with our importers in your country." In fact, what they want you to do is import their product. They will expect advanced payment. The product will be shoddy. The price you pay may be below retail, but it will be above wholesale. The odds of you finding retailer buyers for these exports are slim to nonexistent.
Payment Method Swindles
1. Any payment that involves Western Union is very likely a scam. There is no way that you can determine who is paid, when Western Union makes the payment. They say Western Union and you should say "goodbye."
2. Letter of Credit Scams are common and numerous. Many of these swindles involve the selling, discounting, or hypothecating Standby Letters of Credit. The pigeons are individuals or firms who want to get involved in international trade financing. In general, you can't sell a Letter of Credit. It's an obligation by the importer's bank to pay the exporter's bank a sum of money. The reason that Standby Letters of Credit are used in the swindle is that they usually require far less documentation than a Letter of Credit. Keep in mind that Letters of Credit are not investment instruments. An often used by swindlers and meaningless term in these phony documents is "one year and one day." If that term is on the Letter of Credit, by very wary. The Usual Scam
The exporter sends you samples that more than meet your specifications. You agree to buy a dry cargo container load of the goods expecting that all the items will be the same as the samples. Unless you have someone check the contents of the dry cargo container as it awaits shipment, you are likely to be in for a serious disappointment and resulting financial loss when the shipment arrives at your Customs House. Be sure that whoever does the checking for you, knows the bait & switch scams that can be used to ship shoddy goods.
A great deal of profitable importing is based upon the parties knowing and trusting each other. About half the regular imports into the States are done without Letters of Credit. The exporter ships quality goods. The importer pays for those goods on time. If you want to make money in importing become part of this segment of the international market. Remember the adage. Travel to wherever before you buy from whomever.
William Cate has imported high value goods for over forty years. [http://home.earthlink.net/~beowulfinvestments/beowulftrading/] His import business was one of the foundations for the creation of Beowulf Investments [http://home.earthlink.net/~beowulfinvestments/]
No comments:
Post a Comment