Considering expanding overseas business to engage in transit trade, with a focus on France, I want to understand if its policies, logistics, etc., are suitable. The best answer states that France, located in Western Europe, has convenient transportation. As an EU member state, its policies are standardized and transparent, and its financial system is well-developed, making it suitable for transit trade. However, challenges like high labor costs exist, but with proper planning, its advantages can be utilized.
Is Import-Export Trade Worthwhile? Come and Analyze it for Me!
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Our company is mainly in the trade business and is currently considering developing an import-export trade business. I want to know if this import-export trade model is worthwhile. I'm worried about whether the operation process will be very complicated and whether it will involve many extra costs? Moreover, isn't the risk of transit trade also relatively high? If anyone has experience, can you share it? Is it worth trying?
Trade Expert Insights Answers
Whether import-export trade is worthwhile requires comprehensive consideration of various factors. In terms of costs, if the advantages such as tax preferences and low logistics costs of the transshipment country can be rationally utilized, costs can be reduced. For example, some free trade ports have lenient tariff policies and convenient warehousing and logistics. However, if the transshipment link is operated improperly, extra expenses will be incurred, such as loading, unloading, and warehousing fees at the transit port.
From the perspective of risk, trade policy changes, political and economic instability in the transshipment country, and other factors may bring risks. For example, if the transshipment country suddenly raises tariffs, it will affect profits. However, if policy research is done in advance and stable and reliable transshipment countries and partners are selected, risks can be reduced.
If the enterprise has a mature supply chain and can control risks, import-export trade is worthwhile, and it can expand the market and increase profits; otherwise, it may face losses.
I think it depends on the specific product. Some products are prone to damage during transshipment, so the cost will be high, and it may not be worthwhile. Moreover, if the transit procedures are cumbersome and time-consuming, it will also increase costs and may affect the timing of product sales.
If you can find a suitable transit agent, such as a professional like Zhongmaoda, who is familiar with the process and can help you handle many troublesome matters, it might make import-export trade worthwhile. But if the agent you find is not good, it will be troublesome.
Exchange rate fluctuations must also be considered. The cycle of import-export trade may be relatively long, and exchange rate changes may shrink profits or even lead to losses. Therefore, before doing business, you must closely monitor the exchange rate trends and take necessary exchange rate risk management measures.
You also need to look at the transshipment market situation. If the market for the product in the transshipment country is saturated, and you transfer it there again, it may be difficult to sell, and the cost of inventory will be high, which is definitely not worthwhile.
The complexity of operation is actually not bad. Many trading companies now have mature processes. The key is to be familiar with the entire chain, including the fees and regulations of each link. Once you understand them, it's not difficult, and it might be worthwhile.
If you can make good use of transit trade to avoid some trade barriers, then it is quite worthwhile. For example, if the destination country has restrictions on the country of origin, transshipment may solve the problem and open up the market.
There are definitely risks, but as long as you do sufficient preliminary research, such as fully understanding the situation in the transshipment country, and cooperating with reliable partners, and controlling the risks, import-export trade is worth doing and should be worthwhile.
Product added value is also very important. If it is a high added-value product, through transit trade, higher profits may be obtained. Even if there are additional costs, they can be tolerated, which is more worthwhile.