1– Agreeing a deal with a supplier before a customer – “The boy who cried sale”
Many exporters and traders get their start by acting as a middleman or broker; they don’t buy stock themselves, they seek to find a supplier for a buyer or vica versa. This can often be a result of living in a different country and having the advantage of understanding both the domestic and export markets. For example many Nigerians in London ship goods home to Lagos; they understand where to buy the stock because they live in London but also understand their home market. The problem arises when eager first time brokers and exporters look to establish deals first with the supplier and then to find the customers. This system can be effect when the broker is able to find customer fast, but when they fail to do this, they can seriously affect their standing with the supplier (they can start to become the boy who cried “sale”)
Tip – Always remember that your standing with a supplier is worth its weight in gold. If you are considered a reliable broker who rarely lets a deal fall through, you are likely to get the best deals. Also be sure to get all the relevant details of the deal from the supplier first but don’t commit to buying the stock until you have the
2 -Not checking local importation regulations
Many countries around the world restrict the importation of certain goods. These regulations are not just for weapons and hazardous chemicals, many products (even used mobile phones and used laptops) have particular packaging or documentation. Not being aware of these restrictions and the costs of conforming to them is a major error on the part of many first time exporters.
Tip – Find professional and reliable freight forwarders and local clearing agents. Ensure you have some feedback from a previous customer (try to get a friend to recommend a service)
3 – Buying the wrong product for your market.
You might believe the iPhone is the best gadget ever, miles better than any other phone, but does that make it a good product to buy and sell in your market? Supplying the right product at the right price is rarely about what you think of an item. The important factor is of course what your potential customers think of the product.
Tip – Research your market well before embarking on any purchasing missions. Be sure you are looking for products that will sell in your market for the right price, not just looking for products you’d like to own.
4- Payment / currency issues
Import/export, by its very nature, will likely involve making purchases and transactions in different currencies. It’s important to remember that many suppliers may not have facilities to accept currency other than their own. Many first time exporters neglect to make arrangements for the exchange and transfer of their funds. Restrictions in bank transfer of certain currencies, such as Nigerian Naira, can make directly transferring funds impossible. It can be necessary to make two conversions, adding costs and time that may not have been accounted for.
Tip – Check with both your prospective supplier and your bank regarding the different options open to you. Ask your supplier if they have a preferred method and currency (you may even be able to secure a better price if you are able to pay in the preferred way)
5 – Not asking the right questions – The only stupid question is one you didn’t ask
Suppliers should be more than happy to answer any question you have regarding their products and sales procedures. However, it’s not worth asking questions for the sake of asking and without knowing what you are trying to establish, inexperienced buyers can often ask the same questions over and over in different ways without realising it.
Tip – Before calling to ask questions, ensure you have a clear idea of the information you need.