New to Exports and Imports (Long story, please read and advice)
by Underdog LLC, Window Shopper
- Created: July 6, 2012, 1:54 pm
Hello, I'm in the process of starting an Import&Export type of business but I’m encountering some trouble as I started contacting different US manufacturers. My basic idea was to export a few products to South America and resell them mainly to small retailers but also to end consumers (industrial and individuals)however when I contacted the US manufacturers, They didn’t seem to really want to do business with me since they believe that I'm going to become direct competition to them. This makes no sense, since they have neither presence nor anyone know anything about their products in South America. I told them that i would like some kind of exclusivity contract in order to capture all of their sales coming from a specific country but they said that will be considered as competition to their firm and they wouldn’t want to do that . There are two issues that got me worrying. 1. If I introduce those products to this new market and everything goes well, then I know for a fact that other large/experienced local (foreign) firms will start contacting the US manufacturer directly and placing orders thorough them rather than through my company. I think that it's only fair for me to take all the orders coming from that specific country since my company is taking the initiative and spending resources in order to create a market for those products. 2. The manufacturer has a subcontractor/3rd party company handling all of their international sales which makes me believe that they pretty much only deal with foreign companies importing their products. The manufacturer suggested for me to start my own company in the foreign country and become an importer of American products rather than being and exporter/middle man. I'm not sure if this will be a good idea since I won't be able to oversee the operations on a daily basis and more than anything, I don't know much about taxation, rules and regulations governing companies in that specific country. Can anyone give me some advice on how to proceed and get my business started? Should I incorporate here in the US or should I do as the manufacturer suggested and incorporate in the foreign country I want to do business in? I'm still in the process of doing a lot of research on the foreign market and developing a business plan based on Michael Porter's 5 force's model combined with a SWOT analysis. I feel like I'm doing too much reading and taking to little action in order to capitalize on my ideas.
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