Import export and what business am I in?

Client comes to me with an idea of a product he wants to import. It does not matter what the product is, but an important question is if it will constitute enough to provide for a full time venture. And there are more questions to ask.

Will I sell the imported product wholesale or retail? And, what business will I really be in?

EarringThose are logical questions to ask, but many would be importers do not think the questions through. In wholesale business many products are best sold as part of a line. For example, earrings. You will likely sell not just once single style of earrings but perhaps a collection of three dozen styles with the minimum order being a specific selection.

One selection may be six styles, one piece per style. Another selection may be dozen pieces, one piece per style. Third selection maybe based on another related idea.

But in retail? Twenty years ago gas stations pumped gas, some had a car mechanic on duty. Later they added car wash. After that they added convenience store, which first sold few food items, but later as sales grew the station added gift items to their floor inventory.

Suddenly the question “What business am I in?” is not that unusual. Similarly hair salons did hair and no more at first, and then they started selling shampoo, later, jewelry and fashion accessories. Why? Because they sold the stuff and made money in it.

Similarly, a bookstore sold first only books, and then added a coffee shop. Why? Because not only that people stayed in the shop longer and read while sipping coffee but also because the shop made good profit on sales of the coffee and donuts and pies etc.

Logical conclusion is then that you need to ask yourself what line of business you will be in and approach what product to import accordingly. It may be that two years after you will have started importing you will be in a different business than the one you thought you will be in.

Be flexible and track your profit margin on different inventory that you will stock carefully. Then eliminate those products where you make too little to make it worth pursuing, and beef up the product line that makes you money.