The average North American home contains items from an around-the-world trip the residents never took. Furniture from Vietnam, shoes from Indonesia, or electronics from China are a few examples. These products made in other countries find their way to you through import-export businesses. They’re the matchmakers of global trade who connect manufacturers with buyers in foreign countries and vice versa.
For owners of import-export businesses, it’s a chance to tap into a sizable market. In 2024, the United States imported $4.1 trillion worth of goods and services.
Learn how to start a business in imports and exports.
What is an import-export business?
An import-export business focuses on buying and selling goods across international borders. It requires understanding trade regulations, market demands, and effective logistics to ensure smooth operations. Successful import-export businesses leverage global networks and relationships to navigate challenges and capitalize on market opportunities.
An import-export business is ideal for those with experience in international finance and global relations. Duties include overseeing customs issues, managing the supply chain, and coordinating shipping.
This business model might also be right for you if you can’t find the right products near you. April and Daryk Mall, founders behind plant shop Unsolicited Plant Talks, turned to importing because of a limited plant supply in the United States.
Types of import-export businesses
Import-export businesses facilitate international commerce across borders. The three main types of import-export businesses differ in focus, payment methods, and assumed risk.
Export trading company (ETC)
An ETC scouts hot market trends and focuses on foreign buyers who want to sell those exports. Then they match the buyers with domestic manufacturers who want to export their goods. The export company often takes temporary ownership of the goods while in transit, and after they distribute them, they make a commission.
International Hobbycraft Co. is an example of an ETC. It represents several exporters in the hobby and craft field. Hobbycraft helps these suppliers market and sell their products internationally.
ETCs can help with needs like warehousing, shipping, and billing for their clients. This type of business is a fit for entrepreneurs comfortable navigating local laws in foreign countries. It’s also helpful to have strong communication skills to facilitate conversations between buyers and sellers.
Export management company (EMC)
EMCs work on behalf of local sellers. They tend to specialize in a product niche or industry. If a furniture maker wants to sell to other countries, they pay an EMC to find dealers and distributors in an overseas market. The EMC arranges safe and secure shipping, and handles paperwork.
An EMC receives a salary, commission, or retainer. This is a good fit for someone with marketing skills, an understanding of international markets, and connections with foreign buyers.
An example of an EMC is Archesol, a company that helps sell US-made air conditioning and refrigeration equipment to African and Middle Eastern countries.
Import-export merchants
Import-export merchants find and buy various goods from a domestic company or overseas manufacturer then resell them at a markup. In this import-export business type, the merchant takes on all the risk, but has potential for higher profits.
US-based Diaspora Co. is an example of an import-export merchant because it sources its spices directly from farmers in India and Sri Lanka and ships them to customers in the US, Canada, the UK, Indonesia, Japan, South Korea, Hong Kong, and the EU. Aside from fresher spices, this supports its brand values like transparency and paying farmers a living wage.
“The hope is that it’s better for the land and the earth. It’s better for the farmer because we’re paying them better. It’s way better for the home cook and the chef because they’re getting things that are more delicious,” founder Sana Javeri Kadri says on an episode of Shopify Masters.
But it took the company years to build relationships with farmers. Diaspora Co. launched with only one product (turmeric), and when it sold out, they had to wait until the next harvest to restock. Because Diaspora Co. is a values-driven company, Sana was willing to grow her business slowly.
How to start an import-export business
- Find your niche and make a business plan
- Fund and register the business
- Find a target market and develop a marketing strategy
- Source winning products and forge supplier connections
- Price and sell your services
- Get shipping documents in order
It can be daunting to launch an import-export business due to the complexities of global trade rules and regulations. Below are some basic guidelines, but do the proper research and tailor the specifics to your business type.
1. Find your niche and make a business plan
Which industry or products inspire you the most? Start with the following:
Research the market
To determine whether your import-export business idea is viable, use tools like Google Trends, industry reports, Market Potential data, social media analytics, and the International Trade Administration’s data and analysis reports. These tools can help you gauge whether there’s interest in a niche.
Write a business plan
An international business plan, also known as an export plan, lays out how you’ll handle foreign qualification—the registration of the business with foreign countries—so you can conduct business there. It also maps out licensing, insurance, and permit requirements. Lawyers and advisers who specialize in international business can help you sort through the details. You may also seek guidance from government agencies.
2. Fund and register the business
Startup costs vary depending on your product type, inventory storage, location, marketing budget, and travel expenses. Also factor costs for salaries, office space, insurance, office equipment, operations, distribution, and logistics fees to pack, store, and ship goods. Then take the following steps:
Decide how you’ll fund your business
You’ll need to raise capital to cover the costs of starting a business. Here are a few options to consider:
- Self-funding. Also known as bootstrapping, self-funding is using your personal savings and resources instead of external debt or equity investments to launch your business. Sana Javeri Kadri of Diaspora Co. started her business with $2,000 of her own and waited five and a half years before seeking outside funding. This empowered her to build a mission-driven company without pressure from outside investors.
- Venture capital. Venture capitalists invest money in your company in exchange for equity or an ownership stake.
- Bank loans. Borrowing money from a financial institution, like a bank, can provide a steady cash flow. April and Daryk of Unsolicited Plant Talks took out loans to import plants. This model worked for them because they were able to quickly make back their money through propagation (cutting off a small piece of a plant to grow another).
- Friends and family. You can also turn to your friends and family to financially back your endeavor. This can be a fast and straightforward way to raise money with flexible terms, but you might have limited capital and risk relationships.
*Shopify Capital loans must be paid in full within a maximum of 18 months, and two minimum payments apply within the first two six-month periods. The actual duration may be less than 18 months based on sales.
Register the business
Register your business with your locality, home state, and federal government if necessary. The US Small Business Administration has information on how and where to register based on the business structure and location.
File for foreign qualification
Register the business with the foreign country where you want to do business. In most cases, you file paperwork, appoint a registered agent in that country, and pay fees.
Acquire business licenses
Many products don’t need a license to trade, but some—such as agricultural products—need extra authorization or permits from government agencies. For example, you may need a business license to follow health and safety standards, environmental regulations, or trade restrictions.
Register as an Importer of Record (IOR)
If you plan to import goods into the US, register with Customs and Border Protection as an importer of record (IOR). This ensures smooth clearance of your goods through customs. As an IOR, you pay customs duties, taxes, and associated fees, and are legally responsible for the imported goods. To become an IOR in the US, complete the Importer Identity Form, also known as CBP Form 5106.
For help with understanding and navigating tariffs and international shipping, consult government resources, like the International Trade Administration’s website, for updates on changing trade policies.
Get a customs bond
A customs bond provides insurance for any duties and taxes on imported goods shipment of $2,500 or more. New businesses may need to obtain a customs bond through a Department of the Treasury–insured surety. This is a party that agrees to take on the debt if a borrower defaults. Visit the Bureau of the Fiscal Services to find sureties.
Buy insurance
Import-export businesses can get export credit insurance and cargo insurance on top of standard business insurance. Export credit insurance, obtained from the Export-Import Bank of the United States (EXIM), protects against loss in case buyers in other countries don’t pay. This lets you sell on credit.
Cargo insurance protects against lost or damaged freight and compensates you for lost time and profits.
3. Find a target market and develop a marketing strategy
Market research involves investigating the end user you want to target. Because import-export businesses make connections with both exporters and importers, both sides of the trade are potential clients.
Conduct market research through in-depth interviews, industry reports (such as trade journals and government reports), and surveys. After you collect and analyze your data, create a report on your market, audience, and product.
This information is useful when developing your marketing strategy, or action plan to reach potential customers. Be sure your strategy includes the seven Ps of marketing: product, price, promotion, place, people, packaging, process.
To bring target customers in, establish a strong online presence and contact manufacturers and distributors or retailers directly. For calls or direct-mail campaigns, introduce your company, then pitch the potential of international markets and your business’s ability to deliver results.
4. Source winning products and forge supplier connections
This might be the most fun part of the import-export business—hunting for products to trade and building strong connections with a local or foreign manufacturer.
Sourcing products
To find exciting, promising goods to trade, you can travel abroad, respond to inquiries from foreign manufacturers, go to trade shows, contact development offices at embassies, scour trade publications, and follow up with leads you find on the internet.
Connecting with buyers
To find buyers for imported or exported goods, exploit all available online resources—such as B2B marketplaces, industry-specific directories, government trade resources,as well as trade shows, industry events, cold calls, trade associations, and chambers of commerce.
Building relationships
It takes more than finding the right suppliers to run your import-export business. You also need to develop lasting relationships with your manufacturers.
Diaspora Co. provides advances to their farmers, starting with the first farmer the company worked with. “I paid him upfront for the full [amount of] turmeric I was buying from him, which nobody else, I think, had done for him,” Sana says. “To this day, we give all our farm partners advances, which is just our way of saying, ’Your harvest is not in, but here’s some money because we don’t want you to go into debt. And we want you to trust us, and we will never, ever be late on a payment.’”
In five years, Diaspora Co. went from working with one farmer to 140.
5. Price and sell your services
Figuring out what to charge and how to get products from the manufacturer to the buyer is complex. Consider the best options for shipping, packaging and storing, and first- and last-mile transport. Many import-export businesses charge by commission or retainer.
Commission
In this model, the selling price depends on the volume of units sold and the commission earned—often a markup of 10% to 15%. If the product is easy to sell and broadly desirable, a commission model can be easier.
Retainer
Getting a retainer means receiving a guaranteed preset payment. Pricing a retainer depends on the estimated salary per hour, wages, benefits, time for conducting market research, overhead costs involved (operating expenses), and a profit percentage on labor, materials, and overhead.
Payments are processed in a number of ways as goods work their way through the export-import trading pipeline:
Cash in advance
The exporter takes payment before the product actually reaches the buyer, sometimes offering a discount or other break. Buyers may worry about paying for products they haven’t received yet, which is why cash payment in advance is risky for importers.
Letters of credit (LC)
These are a commitment by a bank on behalf of the buyer. The bank ensures that the exporter will receive payment, so long as they meet the terms and conditions of the sale. LCs are great for new buyers without long credit histories because the bank backstops the transaction.
Documentary collections
Here, an exporter delegates payment collection to its bank (the remitting bank), which sends required documents to the buyer’s bank (the collecting bank), and instructs it how to pay. Documentary collections tend to be more affordable than letters of credit, but they lack a verification process. In the event of nonpayment, legal recourse may be limited.
Open accounts
This gives importers 30, 60, or 90 days to pay for goods after delivery. This benefits the importer more than the exporter, who assumes more risk. But, the exporter can buy credit insurance to cover potential non-payment.
Consignment
The exporter doesn’t get paid until the buyer sells the products. The exporter technically retains ownership of the goods until the sale is complete. An exporter might prefer this arrangement if they want to ramp up availability of products and reduce storage costs.
6. Get shipping documents in order
Here are the most common shipping documents you’ll work with daily. Be aware that these aren’t the only documents an import-export business may need. See the Department of Commerce International Trade Administration for a complete list.
Pro forma invoice
It includes a description of the goods and a guarantee to provide them at a specified price and date. It’s typically used as a quote to negotiate the sale. Pro forma invoices are also useful for financing, opening letters of credit, and obtaining licenses.
Commercial invoice
This expanded version of a pro forma invoice adds items like reference numbers, payment terms, and banking information. Customs officers use the value of items on the commercial invoice to calculate the customs duty. Shopify’s free invoice generator tool might come in handy for you.
Packing list
When products are ready to ship, the packing list details the quantity of goods, packaging, weight, dimensions, and other relevant information. Customs officials use the packing list to check cargo.
Bill of lading (BOL)
This is a contract between the product owner and the carrier shipping the goods by land (inland bill of lading) or sea (ocean bill of lading). Shopify’s BOL template is a standard-compliant electronic form to streamline shipping anywhere in the world.
Air waybill
This is like a bill of lading, only for shipments by air carriers. It includes information on the goods for tracking during shipment.
Certificate of origin
Sometimes this is necessary for letters of credit or at the buyer’s request. A government official must sign it. When no trade agreements exist between the importing and exporting countries, you can use a generic certificate of origin. A Free Trade Agreement certificate of origin voids or reduces tariffs, depending on the language of the trade agreement between exporting and importing nations.
Export license
Before shipping, check with the government agency that oversees the product category to see if you need a license. Check also with state and local officials to see if any other regulations apply.
For example, check the Department of Commerce for the product’s Export Control Classification Number (ECCN), which identifies so-called dual-use items for export control purposes. This includes goods connected to national security, nuclear non-proliferation, missile technology, chemical and biological weapons, criminal activity, and terrorist threats.
Import license
With some exceptions, products entering the US do not need import licenses. Items often needing import licenses include food and dairy products, plants, animals, arms, ammunition, explosives, radioactive materials and nuclear reactors, prescription drugs, trademarked articles such as name-brand shoes, handbags, luggage, golf clubs, toys, and copyrighted material like books and art.
This government document on importing to the US provides detailed guidelines. This video provides an introduction to the CBP import process.
Harmonized System (HS) codes and tariff rates
Understanding tariffs and customs duties is essential for import-export businesses. The Harmonized System (HS) is a standardized numerical classification system used worldwide to identify products for customs purposes.
The HS code assigned to each product determines what tariffs and duties apply when crossing borders. Incorrect classification can lead to shipment delays, unexpected fees, or penalties.
Research the applicable tariff rates for your products and consider using tools that help simplify the process of finding the correct HS codes and understanding how to navigate changing tariff policies.
Electronic Export Information filing
When a shipment exceeds $2,500 in value or an export license is required, this filing is submitted to the Automated Export System. This is so the US Census Bureau can gather trade data on US exports and ensure customs compliance.
Import-export business FAQ
What documents do you need for an import-export business?
Required documents vary depending on the countries involved, but the necessary ones include:
- Pro forma invoices
- Commercial invoices
- Packing lists
- Bills of lading (BOL)
- Air waybills
- Certificates of origin
- Import-export licenses
- Electronic Export Information filings
Are import-export businesses profitable?
Estimated average profits range widely, but they can be profitable if you source hard-to-find items, control overhead costs, and price goods to ensure a healthy profit margin.
Do I need a license to import to the USA?
Typically, US Customs and Border Protection does not require a license to import or export most products. Some products, such as agricultural goods, will need licenses or certifications to import or export. Check with the government agency responsible for overseeing the products you plan on trading.
