3 Different Ways to Profit as an Importer

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Posted by The Savvy Retiree on October 30, 2019 in Portable Incomes

“Just thinking about walking through an artisan market during my travels makes my heart sing. Whether I’m in Santa Fe, New Mexico, or Antigua, Guatemala, or San Antonio, Texas, or Oaxaca, Mexico, or perhaps the night market in Chiang Mai, Thailand, I love exposing my senses to the color and bustle of these gathering places.”

For Judy Miranda, discovering folk art has always been an important part of travel. But in the early 2000s, she realized that her interest in artisan wares from abroad could easily be expanded into a business.

“Whenever I wore a jacket made from the embroidery of a huipil bought in Antigua, Guatemala or decorated our table with a runner woven and embroidered in Peru, or served food on Talavera plates purchased in Mexico, or wore beaded jewelry from Africa, friends would ask if I could bring back similar things for them to purchase,” says Judy.

“I’ve been a serial entrepreneur ever since my Girl Scout Cookies days, and spent a lot of time working in sales, so combining my love of artisan art with my business acumen was a no-brainer.”

Finally, in 2005, on a trip to Mexico, Judy made the decision to purchase a quantity of handicrafts, had them shipped home, and began her importing business, Global Hands Artisans, in earnest.

Fundamentally, an importing business is incredibly simple. You buy a product as close to the source as possible, find a market for it, and sell it at a higher price, thereby making a profit. This is the exact business model of some of the most successful companies of all time, including Walmart and Amazon. But despite the dominance of these global retailers, there is still incredible opportunity for small scale, or micro, importing businesses that target a specific niche.

From her home office, Christina Gillick can run her highly successful importing business how she wants.

Furthermore, there are a multitude of importing strategies available, depending on the product you want to sell, where you want to sell it, and the level of involvement you want to have in sourcing and storing your product.

Christina Gillick, owner of ComfyEarrings, which sells earrings designed for comfort, used a different strategy than Judy. Rather than scouting the world for her product, she has wholesale orders delivered to her directly from the manufacturer.

“The biggest benefit is being almost location independent,” says Christina. “For the most part we can operate the business from anywhere with phone and internet access. We do have to have a physical location to store inventory, and we have to be there periodically to receive shipments of inventory and process them for fulfilment. But, we don’t have to report to a brick-and-mortar store every day, which is nice.

“No one else is guiding me or making me get my work done. At a nineto-five job, I did what they told me and someone else was always in charge of the big decisions. Now, I’m completely free to do what I want. While I do have more responsibility, I have more freedom. I don’t have to commute to work, sit in a freezing cold office all day, or wear what someone else tells me.”

Yet another approach is to cut out the storage aspect of the importing business entirely.

Johnny F.D. Jen has been living in Chiang Mai since 2008. For his first five years in Thailand he worked as a scuba diving instructor, and later wrote a book about making his initial move abroad called 12 Weeks in Thailand: The Good Life on the Cheap.

“At the time, I was only earning $200 a month from the book and had to find ways to either sell more books or start a more profitable business to stay afloat financially without having to move back to the U.S.,” he says.

“Then, on a random dinner meeting, I met a guy named Anton Kraly from New York, who gave me the best advice on how to sell more books and let me in on what he was doing with something called ‘dropshipping.’”

Dropshipping is basically a business model that doesn’t require the importer to handle the product at all. Instead of the traditional model, where you first buy inventory at a wholesale discount, store the product yourself, then send it to the customer after they’ve ordered, you instead have your supplier send the order directly to the customer.

This makes it possible to run an importing business from anywhere in the world, with nothing more than a laptop and an internet connection.

For Johnny, this strategy suited his lifestyle perfectly, and he took to it immediately. “Now that I work online, my days consist of waking up without an alarm clock; bringing my laptop to my favorite café, co-working space, or library; and working from there without a boss looking over my shoulder or meetings to attend.

“Instead of saving up and dreaming about going on vacation every one or two years, I can now go somewhere every one or two months. I don’t need to ask for vacation time off, and I can continue to earn money while doing so. It’s a no-brainer.”

Depending on your interests, your circumstance, or the level of investment you want to make in your importing business, each of the three options offer various advantages. For Judy, buying directly from artisans and handling the importing herself means that she can put a higher mark-up on what she sells. For instance, a woven table runner she purchases at the asking price of $29 can be sold in the U.S. for $79, and an $8 beaded bracelet can be sold for $30. For Christina, ordering a unique product directly from a manufacturer means that she can potentially create a huge market with few competitors, while still allowing her to work from anywhere. And for Johnny, using dropshipping, he can run his entire business without needing a physical location to store his products.

So, let’s take a closer look at how each importing business works:

Source Your Wares While You Travel

For Judy, the magic of being an importer is that she gets to explore amazing parts of the world while she’s seeking out artisan goods that she can sell. “My favorite countries are those where indigenous art is created based on years and years of tradition, like Guatemala, Mexico, Tanzania, Thailand, Bali, and Peru,” she says.

“While traveling I’m always looking for artisans with beautiful products. Sometimes these are found at native markets in villages, usually held one day a week and intended for locals. Researching villages ahead of travel often identifies the day of the weekly market and my travel is planned with the market dates in mind.

“One of my favorites is Chichicastenango, Guatemala, where artisans travel from miles around to sell on Thursdays and Sundays. I always find exquisite textiles and purchase from the same artisans each time. On the most recent trip I found numerous woven runners or wall hangings, priced around $15 to $25 each. I can sell these for $79 to $125. Then there are cities such as Chiang Mai with its large night markets. Often, when I’m in a new place I’ll try to find a local guide with a car. They’ll help you find artisan villages that you might not have heard about and wouldn’t be able to find on your own.

“In Oaxaca, Mexico, I stay at a B&B where the owner offers trips to visit artisans in nearby villages she knows or to see those I particularly want to see. On a recent trip we visited several wood carvers of alebrijes (carved and painted figures), a very famous potter, a woman who makes elaborate aprons, weavers, and a rug village.”

When discussing prices with artisans, Judy first learns the price of a single item, then she negotiates a discount rate—usually between 15% and 20%—for buying items in bulk. “For example, in Santiago Atitlan in Guatemala, I purchased 10 nativity sets, set on pottery plates with figures dressed in Guatemalan fabrics, for $8 each. To buy one set it would have cost $10, and I later sold them all for $45 or $50 each. My U.S. pricing will more than triple, covering the cost of my travel, while making a profit. I find that it is wise to import items that cannot be easily duplicated in the U.S. and are unusual… but not too unusual.”

“I bought 10 sets for $8 each, and later sold them for $45 or $50 each—six times what I paid for them.”

Judy also notes that paying for extra luggage on a flight is far cheaper than shipping costs, so she carries her imports on the flight back to the U.S. “I choose to avoid having to work with import agents who charge fees, determine if purchases meet import guidelines, and can delay delivery of shipments.”

Judy’s costs are modest. She has minimal licensing fees. Each year she pays for a Sacramento Business Operations Tax Certificate for her home city—the price based on last year’s sales. And she also has an annual payment for a seller’s permit from the California State Board of Equalization. Storage costs her nothing but the space in her own home. “My imports are stored in the garage, so they are easily accessible (and it saves me the cost of a storage unit),” she says.

“The biggest part of a successful import business is identifying the selling opportunities. I set up exhibits at conferences (checking with the convention and visitors bureau in cities I travel to), craft fairs, alternative gift fairs, and gift shows (in San Francisco, Los Angeles, Chicago, and New York City).”

Judy also finds success with home parties, where a hostess invites friends, provides refreshments, and enjoys a percentage of sales or a nice gift. They are particularly popular prior to the Christmas holidays. “I’ve also had shows at my own home, with invitations mailed to a mailing list I’ve built up through past events and fliers posted locally to encourage attendance.”

Order Directly From the Manufacturer

Christina says she fell into the importing business. “I had a job for a company that sold web design training, but I was sort of looking for something I could do to be self-employed. I started learning copywriting and later discovered an importing-exporting course through Great Escape Publishing.

“My husband, Nick, and I didn’t quite know what to expect. So the entire thing was basically an experiment. But once the idea proved itself and people started buying, we were in the import business and that was that.”

Christina admits that when they chose a product to sell they weren’t exactly following best practice. “The course walks through the process of doing research to see if an idea will be profitable—searching online, asking friends and family, finding other businesses as examples, etc. But, we had an idea and jumped ahead of most of that advice simply because we wanted to test our idea, whether it would succeed or not,” she says.

“From the time I was very young I was looking for more comfortable earrings. But no one made them. So, since I had wanted them for so long, I thought it was worth perusing. Our reinvention of the earring has a flat back, so it screws on and is comfortable to sleep or talk on the phone. It’s always been our product, but it’s evolved and been improved over time with customer feedback.”

Christina says that the most important thing is not the product you choose but the work you put in to get it in front of potential customers. “I’ve seen people find success with all kinds of products,” she says. “T-shirts, mugs, baby products, sunglasses, pajamas, greeting cards, makeup, posters, dog treats, you name it. But once you have some passion for your product it makes it easier to talk about it and market it.”

She set up her online store using WooCommerce, an e-commerce platform designed to work with WordPress. “When we first launched everything was very simple (because we were just testing an idea). Over time we have grown our website into what it is today. We’ve added new products and styles, more images, more content, and changed the website design and layout.

“Other than our own website, we sell on Amazon and through a few small brick-and-mortar retailers that buy our earrings wholesale,” she adds.

Most of the traffic to Christina’s website comes organically through Google searches, so she makes sure to use SEO (search engine optimization). “Our site shows up for several keyword terms that we use in our content and product descriptions.”

She also uses social media to drive traffic. She has a social media manager who posts regularly across a range of platforms, including Facebook, Instagram, Twitter, and Pinterest. They post pictures, testimonials, and deals, and also use paid advertising on Facebook.

Through the import-export course, Christina was able to find a manufacturer for the earrings, storing the orders in a spare bedroom of her own home. However, now she has team members to help with inventory and shipping. “We still oversee the process: purchasing the boxes, padded mailers, postage, etc. But, we’ve outsourced nearly all of the dayto-day packaging and shipping to one of our awesome team members.

“Amazon also stores some of our products (until they sell), and there is a small fee for that. But it changes based on the time of year and other factors. It may also vary based on the product/ industry. We’re kind of dabbling with Amazon and still trying to figure out how to use it best,” she adds.

Christina says it wasn’t as expensive as she had expected to start. “We bought the minimum order quantities and very few styles to keep our initial order cost down. That first order was a few hundred dollars.

“After we sold the first order, we reinvested the profit into another order. We did this for a while to grow the business, get more styles, improve our product, and hire team members. But, if you want to keep your business small you can start for less and turn a profit sooner.

“Depending on what you spend for your inventory and your expenses, I would say you could make anywhere from 10% to 40% profit. Maybe more if you can find cheaper products—or sell info products, set higher prices, and keep overheads down.”

Avoid the Hassle of Inventory With Dropshipping

For Johnny, running an online dropshipping business feels like running a brick-and-mortar store, but with a lot less financial capital to start and the ability to do it from anywhere.

“Instead of renting a building or store front for $3,000+ a month, you are hosting on a website for $30 a month. Instead of building out a store front with display cases and signage, you can digitally build it out and make your website look as simple or as fancy as you wish, either on your own, using template based e-commerce solutions like Shopify, or hiring a web designer to do it for you.”

Sourcing and selling products from dropshippers is simple. There are a multitude of platforms available—the most popular being Aliexpress, based in China. “You can simply log on as a customer, and order the product for their wholesale rate, putting the customer’s address as the shipping address instead of yours. Some people will even mark the item as a ‘gift’ so the customer doesn’t get an invoice or receipt showing how much the item actually costs.”

The tricky part is choosing a product that sells competitively and profitably. “The way I like to choose products to sell is to first ask myself, where do I want to sell them and how do I want to advertise?” says Johnny. “There’s a huge difference between selling a $5,000 piece of office furniture and selling a $5 fidget spinner.”

Unless you already have an online following or mailing list of people you know would be interested in a certain product, you’ll more than likely be reliant on paid traffic when you’re starting out. In which case, the product you choose to sell will depend on the traffic method you plan on using.

“Let’s face it, no one goes on Facebook, sees an ad for a $3,000 office desk, clicks the ad and buys it,” says Johnny. “However, Facebook is great for selling things that are cheap enough to be spontaneous purchases, like $3 office accessories.

“I’ve known people who have made plenty of money selling both types of products. You can sell hundreds of cheaper products quickly and easily though both Facebook and Instagram ads. And I’ve personally sold dozens of $1,000+ pieces of bulky furniture that were so big they had to be shipped on a freight truck.

“Let’s say you want to target customers who buy the latter, the big expensive products. You may end up using Facebook ads to ‘retarget’ and gently remind people who have already landed on your website to look at your product after searching for it on Google and seeing your ad there.

“The way Google ads work, and the reason why they work so well for big, bulky, and expensive items, is because of keyword searching. Showing a photo of an office desk to someone on Facebook most likely won’t cause them to buy it or reach someone who’s looking for it without overspending on ads. However, what does work is setting up your Google ads so when someone searches for ‘Five-foot dark-brown wood office desk with free shipping,’ your exact product shows up with the price, a buy it now button, and an easy way for them to order it online.”

According to Johnny, selling wood office desks as a dropshipper is pretty easy. Just find a list of suppliers, manufacturers, or wholesalers who have the exact product you want to sell and contact them, asking if you can create a wholesale or dropshipping account with them. On the other hand, if you want to keep it simple, you can dropship cheaper, smaller items like watches, water bottles, bracelets, USB drives, or knick-knacks. These can be found through online marketplaces like AliExpress, Doba, or Wholesale2B, and then sent directly to the customer at very little cost.

“Out of all of the stores I’ve built, my monthly net profits have usually averaged between $2,000 and $5,000 after all expenses per store,” says Johnny. “My best sales months, normally during the holidays, have yielded me over $7,000 in net profit, while my slowest months could dip down to the $1,000 range.

“However, one thing people don’t factor in when building a dropshipping store is the business equity itself, which, once established with 12 months of sales and a track record of profit, you can generally sell the store as an asset through websites like Empire Flippers for 27 times the monthly profit ratio. That means that my first dropshipping store, which made an average profit of $2,000 to $2,500 a month while I was running it, later sold for $60,000.

“Best of all, since I work completely location independently, my customers, virtual assistants, suppliers, and employees have no idea where I am in the world and it really doesn’t matter. I’m able to work as much or as little as I choose to, sometimes making over $10,000 a month running multiple stores, or as little as $2,000 a month working as little as possible and enjoying life.”

Overall, Johnny says his new life in Thailand is much more stress-free. He enjoys the low cost of living, the year-round warm weather, and the freedom to travel as he pleases. “Starting dropshipping was the best decision I’ve ever made, and still the best way to start an online business today.”

You can learn more from Johnny through his blog.

Written by The Savvy Retiree Staff