Ensuring a profit before you import

Assuming you’ve done a fair amount of market research and found an import supplier you wish to source your product from, the next step is to ensure that you can actually make some profit from importing it. After all, if you are not making money, there is not much point in being in business.

Let’s take a look at how you would determine whether there is any potential profit in selling your product:

Analyse your market research

You probably did a lot of market research before you decided to dive into this venture. Now is the time to pull out all that market research. Before you can decide on the validity and profit from importing your product, you need to determine the following:

How much do the current players in the market charge for the product?
Do you want to sell the product at a higher or lower price or at the same price?
Are you going to add value to the product?
What is the cost of importation?
What are the local transport costs?
What are the insurance costs?
What are the merchant’s/reseller’s/distributor’s fees or mark-ups?
What are the customs duties?
What are the storage costs?

Compare profit potential

Once you know all these costs, you can start comparing the profit from importing different products. The aim is to find the product with the highest profit for you (why sell otherwise?).

If you know which profit margin is the best, you will ensure you are giving your business the best chance of success. As Steve Jobs said, “Details matter, it’s worth waiting to get it right.” Make sure you get all the details right when working out your costs, so that you don’t make a huge error in your profit potential calculation. You can use our landed cost calculator as well as our import duty and VAT calculator to ensure you have correctly identified the costs.

Useful tip:

Never pay a supplier or commit to a sale before you have worked out the potential profit from importing their wares.

The top importers in the world never purchase first and work out the profit later, they start with the profit and then place the order. This process above will ensure that you know exactly which product is the right fit for growing you business.

You can read more about calculating the costs of import duties and VAT in our guide on How to calculate import duties and VAT.