Definition: An import export business is a company that facilitates trades of goods and commodities between domestic and foreign companies. In other words, it’s a company that buys goods internationally and ships them in for domestic purchases and vise versa.
What Does Import-Export Business Mean?
What is the definition of import export business? The Export/Import business is primarily an expansion of trade boundaries wherein several business models exist. Just like the conventional business, a person with the requisite Export/Import license can sell his manufactured goods to clients abroad, can act as an intermediary between the local manufacture and overseas buyer or vice versa, and can be directly purchasing good produced abroad and selling them in the native market. The export-import business becomes unique with the involvement of various stakeholders and risks, which do not come into picture with domestic trade.
Let’s take a look at an example.
Potato Joe is a Japanese french fry company that imports potatoes from the United States and makes them into fresh, hand cut potatoes. It has been doing well in the domestic market. Now they wish to expand their business and look for possible buyers abroad. After the initial discussions, sample testing, and price negotiations, Potato Joe has finalized an overseas buyer for their product.
With the purchase order from the buyer, Potato Joe produces the batch and is ready to ship. Now comes the difference with the overseas business. While what would have been just a matter of logistics with the domestic trade, now with an overseas buyer, Potato Joe has some additional issues to be addressed. The custom regulations, the longevity (expiry) of the product, the transport mode, in-transit insurance, counterparty default risk are some of the check-points that Potato Joe has to be adept with.
Potato Joe also has to understand the international food rules, guidelines, and laws for shipping consumables overseas. There may also be licensing requirements that foreign countries impose on businesses that ship goods into their countries. After Potato Joe has all of these obstacles figured out, he will be able to export his products around the world.
Define Import-Export Businesses: Export import business means a company that trades of goods and services across the geographical border of a country.