How to be an importer...and pay for your world travel "How much?" "100 dirhams," answers the young boy, barely looking up from his work. You make a quick calculation in your head and determine that the cost of the hand-fashioned silver bracelet is about $10. The workmanship is exquisite, and you find it hard to believe that these young boys, no older than 8 or 9, are able to create such beautiful jewelry. "I'll give you 800 dirhams each," you respond. "And I would like to purchase 25 of them." The boy nods excitedly and turns to fetch the wooden box filled with finished bracelets that is sitting on the table behind him. You are wandering the dirt roads of downtown Tiznit, a tiny pink-walled city of Berbers situated along a caravan crossroads in southern Morocco. You've come in search of merchandise to ship back home and resell. You figure you can sell the bracelets back home for about $35 to $40 apiece. That's a profit of 300%. Not planning to visit Morocco any time soon? That's OK. You could buy furs in Finland. Finland is the world's biggest seller of farmed furs. The pieces are well-made and inexpensive. So you can buy silver fox furs in Helsinki along the North Esplanade...and then resell them for a warm profit. These scenarios may sound exotic and far- fetched at first. But think again. Purchasing unusual and unique goods around the world, and then shipping them to other countries, where they can be sold for tremendous profits, is becoming increasingly common among travelers who want to see the world but who can't afford an endless vacation. Setting yourself up as a small-time importer is the next best thing. It allows you to satisfy your wanderlust while earning at least enough to pay for your trip. Plus, it makes all of your travel tax-deductible. One woman's story Kathleen Rozelle, an interior designer from Dallas, Texas, first thought of going into the international importing business when she and another designer were planning a trip to England to visit family. Once in London, they teamed up for a shopping spree. They shipped their treasures to Dallas, and then sold everything to clients and other designers. Within three years, the team made enough money to pay for the expenses of their trip (including transportation, accommodation, purchases, and shipping) -- and earned a $14,000 profit. Confident after that success, Kathleen and her family teamed with two other designers for a three- week buying trip in France. They began their buying trip at the March aux Puces in Paris, which is open three days a week. The March Biron section of this enormous market is the place to search for antiques. Another place to shop in France is Rouen. All the shops here are retail; they are clustered near the cathedral and close from noon until 2 p.m. In the south, visit Biot, known for its hand- blown glass. (You'll have to pay more to have these fragile items packed and shipped.) Also visit L'Ile-Sur-La-Sorgue, where the antique shops are open only two days a week. At Moustiers-Saintes- Marie, an open-air market is set up every Friday in the main square. This region is known for its beautiful hand-painted dishes. What lessons can you learn from Kathleen's story? First, that you must begin by choosing a country where you'll feel comfortable doing business. England is a good first choice, because there is no language barrier. (Of course, you should also pick a country where you want to travel.) Second, study the market back home. Is there a demand for the items you plan to purchase? This is the most important consideration when deciding what exactly to import. The second thing to consider when choosing a product is personal experience. What do you know something about? What are you interested in shopping for? If you have a bit of experience with antiques (and if you love poking around in the dark and dusty corners of antique shops), then go with that. In this market, smaller pieces of furniture, such as chairs and end tables, and knick-knacks and art objects that aren't easily found back home are the best bets. (Small accessory pieces also make sense from the perspective of shipping. They can be stashed inside the larger pieces to conserve space in the freight container.) Always mix your purchases. On return buying trips, purchase what sold well last time, and then buy a few new items to test. The Peruvian sweater trade Antiques is an obvious market for small-time importers. But it is hardly the only market. Take Annie Hurlbut, for example. She imports alpaca sweaters hand-made in Cuzco, Peru. It all started as a birthday present for her mother. Annie, then a graduate student at the University of Illinois, was studying the market women in Peru. She spent her days at the marketplace in Cuzco, working with the Andean women, who make their living selling handmade tourist goods, especially alpaca sweaters and ponchos. Annie planned to fly home to Kansas City for her mother's 50th birthday party -_ and she needed a gift. She chose a fur- trimmed alpaca sweater- coat made by one of the market women. The present was extremely well-received. In fact, Annie's mother and friends went so far as to suggest that Annie had stumbled upon a real opportunity. The Peruvian Connection was born. Annie continued her graduate studies, visiting Peru to do research, and then returning home with all the handmade sweaters she could carry. Her mother ran the business end of the company from her farm in Tonganoxie, Kansas. Their first customer was a local store, which placed a wholesale order for 40 garments. "When my mother told me we had an order for 40 sweaters, I almost panicked. I couldn't even remember where I had bought the first one." Annie began running small space ads in the New Yorker and selling her sweaters across the country. She personally visited the owners of stores in New York, Philadelphia, Chicago, and California, asking if they'd like to carry her line. By this time, Annie had created her own design, patterned after what she'd found in Peru. She'd made the sweaters of the market women into a classic fashion product that appealed to upscale boutiques. The business really took off in 1979, when a reporter for The New York Times Style Section saw Annie's sweaters at the Fashion and Boutique Show in New York. Annie and The Peruvian Connection received front-page billing -- which brought in thousands of requests for catalogs. Annie has been running her import business for 10 years. She spends part of each year at home in Kansas -- and the rest of the year in Peru. Not only does her business bring in enough money to pay for her regular trips to South America -- but it has grown into a big-time mail-order company that provides a living for both Annie and her mother. Annie has organized 25 cottage industries in Peru that work for her under contract. She works out the designs and patterns, and then hands over the production to the Peruvians. Everything is shipped by air to the United States. What words of advice does Annie have for anyone considering getting into the international import trade? First, don't try to handle the production and the marketing yourself. You end up spreading yourself -- and your money -- too thin. It's better to come up with a good product, something that no one else makes as well, and focus all your attention on the production. It's not that difficult (or costly) to set up the overseas production of a product. It's the marketing and advertising that can drain you. Sell yourself once to a backer, and then let him handle it from there. Annie's other piece of advice is that you should give a lot of thought to where you set up shop. Americans should think twice, she warns, before opening a home office for an international importing company in New York. This city is overwhelmed with shipments, and you can end up waiting a couple of weeks to see your merchandise. Things go much more quickly and smoothly in the Midwest, for example. Another thing to consider is customs regulations. However, Annie assures all would-be entrepreneurs that they won't have any problems with customs. Importers bring a lot of revenue into their home country and are generally treated well by their home governments. Nonetheless, you will have to pay import duties. In the United States, duty is generally about 20%, depending on the type of goods being imported. Cashing in on Brazil's mineral rush How much money do you need to go into the import business? Harvey and Michael Siegel, brothers born in Long Island, New York, did it with about $400. A boyhood fascination with rock and rubble led these two to Brazil, where they filled their knapsack with $400 worth of agate ashtrays. This was the beginning of Aurora Mineral Corporation, which is now a leading wholesaler of semi-precious stone and mineral specimens, with a client list that includes the Harvard University Museum, the Smithsonian Institution, and H. Stern Jewelers. The brothers didn't fly down to Brazil with armloads of research, deep pockets, and a long list of connections. On the contrary, this was a seat- of-the-pants operation. The Siegels' cousin had traveled to Brazil for Carnival the year before, met a Brazilian girl, and decided to stay. He was their only connection in the country, and he agreed to act as their agent. Having a reliable agent can really make or break an import business. The agent's role is to screen products, accompany the importer on buying trips, consolidate orders from multiple suppliers, and arrange for a shipper to transport your merchandise back home. You can work without an agent -_ doing all the legwork yourself -_ but your job is made much easier if you have someone working with you. "It is invaluable to have someone on the spot to shop the market constantly," says Irving Viglor, a New York-based international trade consultant. An agent is independent and acts as an intermediary in a deal but does not take title to the merchandise. "Pay the agent a commission to protect your interest," warns Viglor. "Don't let the vendor pay the commission. And always check references." Aurora Mineral Corporation mines for its minerals (figuratively speaking) in the tiny towns of La Jeado and Salto Jaqui in Rio Grande do Sul, Brazil's pampas grasslands bordering Uruguay and Argentina. Actually, the local Brazilians do the mining. They dig for amethyst and agate with back hoes on land leased from farmers. The bounty is sold by the kilo from wood shacks. North of Rio Grande do Sul is the state of Minas Gerais, where quartz crystals, rose quartz, fossils, aquamarines, topazes, and uncut emeralds are mined. The finest quality pieces are purchased in their natural form and sold to museums or collectors at trade shows. In addition to the minerals themselves, the Siegels also import decorative pieces made of amethyst, agate, and quartz. The stones are carved into birds, grape clusters, coasters, spheres, book ends, ashtrays, and clock faces. These finished pieces are culled from one- person workshops and larger factory warehouses. "In Minas Gerais, unlike in the south, you deal with many small suppliers. An agent is particularly important here," says Michael. The recent craze for quartz crystal, believed by some to have curative powers, has meant big business for Aurora Minerals. The World Prayer Center, a Buddhist house of worship in Maryland, mortgaged its real estate to pay for its collection of quartz crystal, which it purchased from Aurora Minerals Your Brazilian connections All Brazilian exporters are required to file annually with the Department of External Affairs in Brasilia. These records are accessible, free of charge, from the Brazilian Government Trade Bureau, 551 Fifth Ave., New York, NY 10176; (212) 916-3200; fax (212) 573-9406, or their offices in many major countries. If you're interested in going into the import business in Brazil, it would be a good idea to review these records to find out something about the competition you'll be up against. In addition, the Brazilian Government Trade Bureau offers free consultations for anyone interested in doing business in Brazil. Other complimentary services include use of meeting rooms, conference calls with simultaneous translating services (you pay only for the telephone charges), assistance with travel arrangements to Brazil, and referrals for accountants, lawyers, and agents who are experienced with matters of import and export. The deputy director of finance for the trade bureau, Luiz de Athayda, can answer all your questions pertaining to the Brazilian economy, banking, and financial regulations. Contact him at the address given above. Or contact the trade bureau's office in Washington, D.C., (202) 745-2805. The Brazilian-American Chamber of Commerce publishes a listing of trade opportunities for U.S. businesses in Brazil and vice versa. This international swap meet is part of a bilingual business newspaper called The Brazilians. To submit a listing (which is free of charge) or to reply to a posting, contact The Brazilian-American Chamber of Commerce, 42 W. 48th St., New York, NY 10036; (212) 575-9070; fax (212) 921-1078. To receive a copy of the newspaper itself, call The Brazilians, (212) 382-1630 in New York or (55-21) 267-3898 in Rio de Janeiro. Choosing an import If you're intrigued by the idea of setting yourself up as an importer as a way of paying for your world travel, but you don't have an idea for what exactly to import, attend the Frankfurt International Fair. This exposition, held every August, is known as the Cannes Festival of Consumer Goods. It is the best place in the world to preview the latest European trends. Among the exhibits are clocks, tableware, home accessories, lighting fixtures, giftware, housewares, arts, and handicrafts. For more information on this year's festival, contact Messe Frankfurt Office, Ludwig- Erhard Anlage 1, 6000 Frankfurt am Main 1, Germany; tel. (49-69) 75-63-64. If you can't make it to this annual fair, you surely can make it to one of the other 16 internationally renowned trade fairs held each year in Frankfurt, which has become a mecca for international importers. For a calendar of the fairs and more information on how to make arrangements to attend, contact Philippe Hans, Frankfurt Fair Representative, German American Chamber of Commerce, 666 Fifth Ave., New York, NY 10103; (212) 974-8856. And remember, if you attend any of these fairs to do research for your import business, all the costs of the trip are tax-deductible. A publication that has provided many product sources since 1963 is Worldwide Business Exchange, a monthly newsletter with hundreds upon hundreds of leads, contacts, sources, and resources every month. It covers not only import sources, but also business financing, channels of distribution, franchises, new products, finder's fees, mergers & acquisitions, venture capital, joint ventures, partnerships and more. A one year subscription is $48 from Phlander Company, Dept. 70197, P. O. Box 5385, Cleveland TN 37320. New subscribers can try it for 6 months for $27. The value of a home-grown import The import companies that prove most successful are those that grow out of a native cottage industry whose product is considered exotic or rare back home. That's why Annie Hurlbut's import business is booming. She discovered a cottage industry that was already thriving in Peru -- and then transported the fruits of that industry back home to the United States, where alpaca sweaters handmade in Indian designs are valued -- and not easy to come by. An idea for a similar import is handmade cotton clothing from Guatemala. The colorful and comfortable shirts and skirts being made here can be bought for virtually nothing -- and then shipped back home, where young girls are willing to spend a pretty penny on these fashion statements. We know of a couple, living in Maryland, who travel to Guatemala several times a year to purchase the handmade clothing, and then ship the pieces to the United States for resale. Like Annie Hurlbut, this couple is not only able to travel to their favorite South American country three or four times a year free -- but they are also making a comfortable living off of the profits of their small import company. The ideas are virtually limitless...handmade Mexican blankets, which can be purchased anywhere in Mexico for a few dollars and then resold in the United States for $30 or $35...brass pots from Morocco, which can be purchased in any shop or from any street vendor for about $15; these can be sold in the United States for at least twice that...tiny wooden boxes from Uruguay, useful as decorative objects or for storing jewelry; these sell for $5 or $6 in nearly every gift shop in Montevideo and can easily be resold in the United States for $10 or $15... Similar deals can be made between any two countries. Where do you want to go? Which country of the world are you interested in exploring? That should be the primary determining factor when trying to decide on an import. Remember, the whole idea is to use the import business as a way of paying for your travel. An unusual suggestion for the importer in Sulawesi In Sulawesi, Indonesia, craftsmen make traditional wooden sailing boats using methods little changed from those used hundreds of years ago. These boats, built without hand tools and without electricity, come minus an engine, and they have two huge steering oars instead of a rudder. Known as an Indonesian pinisi, a boat of this type is a cross between a junk and a 16th-century galleon. The pinisi was once the sailing ship of choice among the fierce Bugis pirates, who ravaged the islands of Indonesia and conquered much of mainland Malaysia. It is possible to buy one of these boats for as little as $5,000 or $10,000. Of course, you must travel to Ujung Pandang, the capital of Sulawesi, to do so. But that's where the adventure begins. Once in Ujung Pandang, your first job is to find a reliable agent, who speaks the language and who knows something about building a pinisi. One agent we can recommend is a Mr. Rustum, who can be contacted at Jalan 302/10, Ujung Pandang, Sulawesi, Indonesia. But perhaps the most helpful person in the traditional boat trade in Sulawesi is a Yugoslavian sailor named Ivo Rebic. Ivo speaks fluent English and Indonesian and has spent two years researching traditional wooden boat building. He is your best bet for reliable and enthusiastic local assistance. Contact him in care of Evie Rumagit, Jalan Sumba 86/9, Ujung Pandang, Sulawesi, Indonesia. Once you have found an agent, the next step is to find a competent builder. The biggest boat building center in Sulawesi is Tana Beru. At any given time, there are 50 boats being built along the palm-lined beach of this seaside village. One of the most respected builders in this area is Usman Hasan, an Indonesian Chinese who has the most Western-style approach to the boat- building business of anyone in Tana Beru. You can contact him at Jalan Tokambang 072, Bulukumba, Tana Beru, Indonesia. Now, you may be thinking, that all sounds intriguing, but why in the world would I want to buy an Indonesian pinisi? First, it is a wonderful excuse to travel to exotic Indonesia and have the adventure of a lifetime. But more than that, investing the time and money in building a pinisi in Sulawesi makes it possible for you to see Indonesia free. Before you take off for Sulawesi, contact marinas and boat clubs in your area. Put up notices on the club bulletin boards explaining what you're planning to do. If you're lucky, you may be able to arrange for a buyer -- or a sponsor -- before you depart for your trip. But at the very least, you'll build interest in your venture. Once your boat has been built and shipped back home, contact all those marinas and boat clubs again. And place small ads in boating magazines and newsletters offering your rare and authentic Indonesian pinisi for sale -- for several times what you paid for it. You should have no trouble finding a buyer -- these boats are beautiful and truly exotic in any other part of the world. Any boat lover anywhere would be thrilled at the opportunity to own one -- and probably more than happy to pay enough to cover all the costs of your trip to Indonesia. Buy a Chinese junk Years ago, the harbor at Hong Kong was filled with Chinese junks. These flat-bottomed, high- sterned sailing vessels with square bows and masts carrying lug-sails served as floating homes for thousands of the island's residents. Today, these traditional junks are disappearing from the harbor. They are inconvenient and uncomfortable places to live. And few new junks are being built. But that is not to say it is no longer possible to buy a junk. You can get one for as little as $8,000 or $10,000. They are listed for sale in the classified sections of local newspapers. This gave us an idea. You could travel to Hong Kong, purchase an old junk, and then go on an extravagant shopping spree in the myriad antique shops that line the streets of this city. Oriental carpets. Porcelain and marble statuary. Centuries- old Chinese vases. Jewelry. Carved wooden boxes. Then you could pack up all your Chinese treasures, stash them in the holds of your Chinese junk, and have your junk loaded on to a huge ocean freighter and shipped back home. While your treasure chest is crossing the sea, contact the local media of the city where the ship will land. Send out press releases. Alert everyone in the area that an authentic Chinese junk, filled with valuable Chinese antiques, will be landing in the city's harbor. Make it a gala event. All the press coverage of the junk's arrival will help you sell the treasures it contains. You should make enough to pay not only for the antiques you shipped home, but also for your adventure in Hong Kong. What do you do with the junk? Well, you may decide to keep it -- you'd surely be the only one on your block to own one. Or you could sell it. A Chinese junk is a rare and valuable thing outside its home country. You could sell one back home for several times what you paid for it in Hong Kong. The real wealth angle here, however, is not buying a Chinese junk. It's using your imagination to unlock profits that no one else ever thought of. Ultimately, your imagination -- along with your patience and energy -- is the key to your fortune. Before you buy anything... You can simply take off for parts unknown, with several hundred dollars cash (or traveler's checks) in your money belt, and buy up a few dozen of whatever strikes your fancy and you believe will sell well (and for a premium price) back home. It really could be that simple. But taking off blind can also be a bit risky. Better to do a bit of homework first. Begin by reading everything you can get your hands on about the country where you want to travel. What do the local craftsmen make there? What do they make it out of? Where can you buy it? How much will it cost? Will it ship easily? A good first contact is the embassy or tourist board for the country where you'll be shopping. Representatives at these offices should be able to provide you with some of this information over the phone; most are natives of the country they are representing. Also ask a staff member at the tourist board for a listing of department stores or specialty shops in your area that carry handicrafts or other goods imported from his home country. Then go to see for yourself what is being sold, for how much, and to whom. It is also a good idea to introduce yourself to the owners, managers, or buyers of a few shops in your area. Tell them about your shopping trip and your plans for importing goods back home. Ask what they would be interested in carrying and what prices they would charge. (Remember, most retail outlets mark prices up 100%.) You might even get an order before you leave. The other things to investigate before you take off on your grand shopping adventure are customs and rates of duty in your country. Explain to your local customs service what you are planning to import and to where and ask that you be sent all relevant information on clearing customs and paying the appropriate duties. Setting a price Don't wait until you've returned home, suitcases full of silver bracelets and brass pots, to determine prices for all of your exotic treasures. If you leave all of this to chance, you may be in for a very unpleasant surprise. Instead, do a bit of arithmetic before you even get on the plane. Start with the purchase price. What do you think you'll have to pay for whatever it is you plan to buy? Add the expected costs of shipping and duty. This gives you your total cost. Double it, and you have the cost you can charge the retail outlets you do business with. Double it again, and you have the cost the retail outlets will charge their customers. Say you plan to buy wool blankets in Mexico for $8 each. You know the cost of shipping each blanket will be $1, and the cost of duty will be $2. That's a total of $11. Double this to get $22, the cost you should charge when selling your blankets to a retail outlet. Double that again, to get $44 -- that is the cost to the consumer. Is the blanket worth $44? Is it worth more than $44? Consider the market. What else is available? How much is it selling for? Who is buying it? If the total cost to the consumer you come up with sounds like too much -- or too little -- make adjustments one way or the other. In the case of the Mexican blanket, for example, $44 is a bit high. The retail outlet may only be able to sell the blankets for $35 apiece. Thus, you can only sell them for $17.50 apiece. This means that the most you can pay is $5.75. It's possible to buy blankets in Mexico for $5.75 apiece -- if you buy a dozen or more at one time, and if you know how to haggle. If, however, once you get to Mexico, you find that you just can't find the blankets you want for the price you can afford, reconsider. Maybe you ought to be shopping for silver earrings instead. Remember also that the whole purpose of importing the goods in the first place is to pay for your trip. So, once you've arrived at a price, determine how much you will make if you sell all of the merchandise you have imported back home. Make sure you'll come out ahead -- or at least even. If not, reconsider, both the pricing and the merchandise you're importing. The shipping factor One of the most important considerations for anyone in the import business is shipping. The shipper you deal with is responsible for picking up your purchases at the shop, packing them, and shipping them back home for you in 20- foot containers. With some shippers, you can arrange for a split-container. This way, the shipper doesn't send the merchandise until he has enough going to your city to fill the entire container. Shipping costs about 15% of the value of the merchandise when a full container is sent; about 25% or more when a partially filled container is shipped. The shipper should provide you with stickers (one is attached to every item being shipped), a shipper booklet (in which you record the merchant's name, the agreed-upon-price, your company name, and a description of the item), and the name of a driver, if you need one. (If English is not spoken in the country where you're shopping, you'll need a driver to help you find the markets and to negotiate with the merchants. A driver can be expensive -- as much as $75 a day. But this is a worthwhile investment.) How can you find a competent and reliable shipper? Two good places to try are your embassy in the country where you will be shopping and the local chamber of commerce office. Tricks of the trade Always carry a Polaroid camera, a 35mm camera, and lots of film with you when shopping for merchandise to ship home. Take two pictures of every item purchased, one Polaroid and one 35mm. Keep two ledgers: one that lists prospects, another that lists actual purchases. This way, if you're unsure of something, you can easily go back to buy it later -- you've got a record of where to find it. Europe does not have the same type of wholesale market, but they do have large wholesalers. They may not be willing to deal with an individual, which is one good reason to form a company first. But if you tell merchants that you are buying for export, they'll usually give you a 15% to 20% discount. In some countries of Europe, especially France, the entire country goes on holiday at the same time. In France, it is the month of August. Plan your buying sprees around these holidays. Always keep all of your invoices and receipts. If your merchandise doesn't arrive as expected -- or if you have to prove the value of your goods to a customs official -- you will be lost if you've accidentally thrown away your documentation. What governments won't allow you to import Many countries have passed stringent laws against importing many of Mother Nature's souvenirs from foreign countries, and many of these types of products are protected by international treaties. These laws have been established to protect endangered animal species. Certain plant species are also outlawed as imports. If you ignore the regulations and try to import two dozen pairs of Brazilian alligator pumps (because you're sure you can sell them back home for a 200% profit, and you simply can't resist the opportunity), you risk having your booty snatched. You may even be hit with a hefty fine. So check the regulations of your destination country carefully. Sell American...And make a fortune doing it! What would happen if, in your business, all you did was "buy" from yourself? You wouldn't make very much money, would you? Think about it! That's exactly what this country would be doing if we only "Buy American." Every time we sell an American made product in the international marketplace, those dollars come back into the U.S. economy, increasing profits, creating jobs, making America stronger. 80% to 85% of U.S. businesses don't export. But American products are in demand. Amway recently went into Mexico, expecting $3 to $4 million in sales the first year. Instead they hit $15 million in sales the first year and $50 million the second year, and said that they have never seen such strong demand for American products in any of the more than 20 countries they are now in. Yet it seems that when someone thinks about getting into international trade, they decide to import instead of export. Actually, exporting is just as easy as, maybe even easier than, importing. Besides, as an importer, you have to buy things to sell here...that takes money. But, as an exporter, you are selling things overseas...which doesn't take much money at all. As a matter of fact, you can actually start your own export business for a couple hundred dollars. Your very first order could easily return your investment ten-fold or more. There are thousands upon thousands of products you can start exporting tomorrow! Most of the books and courses on exporting being offered today are theoretical, not practical. In reality, selling overseas is no more difficult than a company in New York selling & shipping a product to a buyer in California. A most useful complete startup is a new manual called "Sell American", available for $104.95 postpaid from Phlander Company, Dept. 70197, P. O. Box 5385, Cleveland TN 37320. Or they'll send you a free brochure describing the book in more detail. Once you finish reading "Sell American" you can export U.S. made products simply and easily, and start earning your fortune in the international marketplace. With the end of the cold war, unification of Europe, the breakup of the Soviet Union, and free trade agreements being established in the Americas, every entrepreneur should now recall the words of Thomas Jefferson -- "A merchant, by his very nature is a citizen of the world." While the governments discuss the issues of world trade, it is up to us as merchants (entrepreneurs) to meet the challenge head-on with action, instead of talk. As an American entrepreneur, you should make it your responsibility to "Sell American."