General Business Model in Export/Import Business Blueprint and FAQ! Any comments and advices?

As a broker you shouldn't need a license. However I personally would at least register an LLC.

Contact a customs broker and make sure you get a clear. Also, I would contact an attorney to go over the legalities and possibly draft a contract for the parties to sign. The last thing you want is to be in the middle of an international law suite because of broken, or damaged material that you had no control over.

Here is an article to get you started.

http://www.sba.gov/community/blogs/i...usiness-owners

Honestly, I wouldn't take advice from anyone here. UNLESS they have done it themselves. Go straight to the horse. And ALWAYS cover your ass.

Hi Zuonline,

You sent me this via email today, and I read it, just havent had a chance to respond (Patience my friend).

As you can see the answers on each line of your plan would require several paragraphs...and a significant amount of time, which is why it is much more productive to answer in threads, because I have 20 other people asking the same questions on a thread I am tending to.. I do get to them all eventually, but I tend to answer the one or two line ones first, because others require significant time and energy investment.

For now, no you should NEVER CC the buyer on your correspondence with the seller. YOU are the one who negotiaties your deal with the buyer, the only contact information your buyer should ever have on your seller is on the final invoice.

On the question about establishing a company to act as a broker, let me ask... (this may sound cocky in print, but is not intended that way).

Do you have to establish a company to help your friend sell his used car and act as a go between , in between him and a buyer?

No, because you are already legally your own sole proprietorship, at least in America...and nobody is going to come bust your door down for helping to facilitate a deal as an individual between your friend who has a car for sale, and another friend who wants to buy it.

At some point it will be important to register your business with a name for various reasons, and "technically" maybe if you help your friend sell his car as a broker then you are doing "business", but in reality... are you going to get in trouble for putting a buyer and seller together without having a registered name for your business?

Well, if the country you pay your taxes to gets paid, then it's not likely.

If you are a local web designer, and someone pays you to design a website, are you going to get in trouble for that?

Not likely.

Now , when you get to doing 6 figures per year, and its a fulltime thing for you, then its advisable to give it a name and register it... and its even "prudent" to do it before you even make your first sale, but is it likely that anyone is going to care?

Not likely.

The technical answer is yes, but the reality answer is , "dont sweat the small stuff", you dont even have a business yet until you have tried it and its working for you.

Do the guys on the other end (manufacturers) care if you are a legal business entity?

No, they assume you are just an individual guy putting deals together unless you tell them different, and they dont care as long as you send them a customer. Most of their liquidators (offline) show up in cover alls, in a pickup truck, and spend their days digging through boxes in the back of a warehouse.

If you are doing enough business to justify incorporating, then do it. But for now, at least in America, you are already a sole proprietor, although at some point it is prudent to register yourself as a business and establish a DBA, more for image purposes than anything else, and so you can do things like establish a business bank account...

I dont know how it works in Asia.

Here there are rules, and there are "unspoken" rules.

Hope this helps.
-JD

Ps. Yes your basic outline looks good!


1: You should never have to deal with customs agents, that is for the seller and they buyer to do, and usually they are already both familiar with the procedures, and customs protocols are a "given" , already considered in their standard formulas for shipping and receiving ... A big buyer already knows how to deal with his receiving port, he does it for a living. The shipping companies already know how to ship... they have standard contracts that already include these things. Your buyer may tell you "I have to have it on plastic pallets or fumigated ones", Okay... No big deal, the seller will do that, the shipper will fumigate.

I understand all the concerns people have, and they feel like they need alot of knowledge that is unnecessary... but simply put, all you really have to know is how to contact a seller, make a commission deal with them, and how to contact buyers and send them the specs....

You dont even have to know how to make an INVOICE! lol

I will be honest with you, on my first deal I didnt know ANYTHING... my buyer coached me through their whole buying process, and I just paid attention, and googled things so I could understand terms... It's really not rocket science at all.

However I know that when a person talks about 20k deals, one might assume there MUST BE some rocket science involved...it simply isnt true.

Your buyer says "I want an FOB quote, and you tell your seller "My buyer wants an FOB quote", and the sellers sends you an invoice to fwd with an FOB quote on it.

That simple.

YOU yourself dont have to tell your buyer what his custom agent requires, he will tell you. There is almost NO reason you should ever have to talk to a customs agent unless both your buyer and seller have never done this before. Which is HIGHLY rarely going to be the case.

His customs agents say he needs fumigated pallets, so he tells you "I need an FOB quote that includes the price of fumigated pallets", and your seller sends you an invoice with an FOB quote that includes the price of fumigated pallets...you almost dont even have to know what the terms mean, although its good to familiarize yourself.

2: You will never find yourself as the target of a lawsuit on a business deal where the buyer and the seller are the ones entering into the contract.

You have nothing to do with the contract at all. That is between the buyer and seller, and it contains THEIR signatures and outlines THEIR agreement between one another.

Hi Zuonline,

Looking back through your questions, much of them are focused on liability. I would caution you against approaching this with your eyes on what could go wrong, as much as what could go "right", because there is a MUCH higher probability of something going right , than wrong with this.

These manufacturers VALUE your service, and your partnership, especially if you show them that you can sell. They arent generally going to go around you, or let anyone else do so, although Im sure there is a rare exception to that rule, we gain more ground by playing to the rules and not the exceptions.

There is only one contract that can really protect you, and if you listen this will make sense.

If you sign a contract with a manufacturer that says he cant sell to any of your customers, then what could potentially happen?

If he is dishonest he could go to your customer and tell them "I will sell to you without the middle man, but you have to do it under a different name".

So in that case your contract does not protect you.

On the other hand, if your BUYER decides to go to your seller around you, which they usually wont for SEVERAL reasons... then they could easily go under a different name and buy around you anyway... So, again, your contract does not protect you.

There is only one contract that will protect you.

That is when you sign an agreement with the seller that says they cant sell ANY OF THE INVENTORY without you. That means that you lock up their WHOLE stocklot, and no one else can sell it but you, not even the manufacturer.

Then it doesnt matter who goes around who... because if any of that stocklot goes missing, the seller is liable to you .

However "Good luck getting a seller to agree to that". If you havent sold out his warehouse before, and he doesnt know for a fact that you can get rid of the whole stocklot in a reasonable amount of time, he is going to tell you tio take a hike, before signing something like that.

Why?

because he has no guarantee of your ability, and he has other brokers that he might work with, and someone may come to him personally and want to buy some of it... He isnt going to let you lock it up in an exclusive unless you are DAMN convincing, and then he will do it reluctantly in a very rare case.

He isnt going to miss opportunities to sell because he has all his stocklot locked up in a contract with a guy who he doesn't know.

However, if you work on good faith the first time, and do a good job and sell it in a timely manner, then you may get a contract the next time around.

This is pretty much a handshake kind of business, and it has been for centuries because of these reasons, people develop trusting relationships and comradery...

If you approach this from a fear based perspective you wont get anywhere.

Some will argue this, but I GUARANTEE you, after much experience... that you will have to sell hard till you are blue in the face to even get one out of 100 sellers to do that, and then you better be able to back up your word and sell it all in a reasonable amount of time, or you just cost him months...

Whats generally going to happen is that you are going to sell a load of it here and there, or maybe a few, and he is also working on the problem simultaneously, because its his job, and trying to get rid of it along side you... in a rare case you may sell out the whole warehouse in one customer... but it isnt realistic to ask a manufacturer to lock up his whole inventory for months, with no evidence that you are actually going to sell it.

Others who think they know what they are talking about, and don't, can argue this, but I promise you, that is the ONLY kind of contract that will protect your interest, and most times a contract is not needed.

In a rare case you might get a bad apple, but thats business. Most of the people in it are honest.

I would just stick out my hand and shake with people (cyber shake) , create some good will faith, and rock and roll and move forward, and drop all the fears...

Some are going to advise: "It's not fear, its smart business"... Okay, then try it....Call 1000 manufacturers and see how many you can lock down to a contract while someone else has already made a deal...and then tell me who is smart.

Theory and reality are often different animals.

Thats my two cents, take it and you will do well. You COULD try to to lock some manufacturers down to exclusive contracts if you want to test this for yourself and see if Im wrong or not, but Im telling you that in practical application, it isnt going to work without a serious verifiable track record to present.

Once you have references and a track record, people will sign contracts like that with you sometimes, but not often, because usually they are working on their own prospects too.

-John