Importing cars can be a profitable business. In 2016, the US imported more than $1.25 billion in used passenger vehicles. This data proves that the business of importing cars is a driving force in the world of commerce. If you’re interested in becoming a part of this thriving import business that furthers trade around the world, you’ll need to first understand the basics of how to start a car importing/exporting business.
Below is a beginner’s guide to starting a car import/export business. If you’re ready to get started setting your next exciting business venture into motion, take a look below to learn how it’s done.
What are the startup costs?
Starting a car import/export business can be done with minimal startup costs. You’ll, of course, need the basics like a phone and internet connection, but that’s about it unless you want to go the extra mile and hire a marketing professional to help you with branding, which never hurts.
Once you work out your startup costs, next focus on narrowing down a market. This part requires a good deal of research. Think about who your customers are, which locations internationally you want to market to, and the types of cars you’d like to import or export. Your ideal customer should be someone who is looking to trade internationally.
Register your business.
To register your business, you need to fill out and complete the US Department of State SNAP-R Company Registration. Once you complete your registration, the State Department will email you instructions on how to get a company identification number (CIN).
For the most part, you won’t have to worry about obtaining a license to import or export products, because the US Customs and Border Protection (CBP) does not typically require a license to do so. However, there are exceptions with certain products. Have a look here to learn if the car you plan to import or export requires a license.
Finalize the paperwork.
It’s important to note that imported vehicles have to adhere to US environmental and safety standards. Be sure to research what compliance standards and required forms the EPA and National Highway Traffic Administration require.
Since you’ll be importing/exporting cars you’ll also need to research what forms the Automated Export System of the US Census Bureau requires you to fill out and send in.
Choose a business model.
Import/export businesses charge based on commission or retainer. Consider going with a commission model if you believe the product will be an easy sell. However, if you think the product will be hard to sell, consider going with a retainer model.
The idea here is if you sell a lot than its to your advantage to be paid on commission, but if sales are slow down then using a retainer model ensures you’ll be paid even during sales lulls.
After you’ve chosen a business model, you may want to consult with a money transfer specialist due to the complexities of international billing and payment methods.
Since you’ll be shipping and receiving vehicles from other countries you’ll need to arrange how the goods will be sent and received.
You can research how to ship the vehicles on your own or hire a freight forwarder to move the vehicles for you. The benefits of using a freight forwarder are it saves you time and you don’t have to worry about how to transfer the vehicles to their final destination.
With the right business planning and strategy, importing and exporting cars can be quite profitable, especially in places like Africa. There are many untapped markets throughout many countries in Africa, and untapped markets make for great places to target for an importing/exporting business.
Take the plunge and learn how to buy cars in Nigeria and import them to the US perhaps or maybe target untapped markets in South Africa for a car exporting business. Taking the time to research untapped markets gives you a better chance of setting your car import/export business into drive from the start.