EXPORTING OR IMPORTING WITHOUT INVESTMENT
There is a technique that you can use to operate an Export-Import business without making any direct investment in products. This technique is sometimes referred to as "GHOSTING." You can also refer to it as "Exporting or Importing Without Investment." Here is how it works:
1. Find a world importer who is interested in buying a product. This can be done by searching export trade leads on the net.
2. Identify a source of supply, either U.S. or foreign, for the product the importer is seeking to buy. Most libraries have directories of U.S. manufacturers listing the specific products. Locating a foreign supplier is a little more difficult. Writing for samples of overseas trade publications should help you in locating a suitable foreign supplier of just about any product.
3. Contact the seller of the product, request a firm price quotation for the exact product that is being sought. Make sure the quote is in total accordance with the quotation request from the foreign or domestic buyer!
4. Prepare your price quotation on your printed letterhead to send to the potential buyer. Add a commission of 5% to 15% to the prices that were originally quoted to you. Inform the buyer to issue an irrevocable letter of credit (LOC) if he accepts your price quotation. Special note: if you are quoting from a foreign supplier to sell to a foreign buyer, request the buyer issue a irrevocable (Transferable or assignable) LOC! This allows you to keep your commission and assign or transfer the remainder to the supplier once the specifications within the LOC have been met.
5. It is best to arrange with a bank that works with international LOC's prior to sending your quotation. Should you receive the LOC prior to making the arrangements, take it to the bank and they will assist you. Ask them to issue a back-to-back LOC to cover your purchase of the items you plan to buy on behalf of your buyer. Here again you may use the assignable or transferable aspects of these particular types of LOC's.
6. You may also use a international freight forwarder in regards to the international LOC in addition to having them handle all the details associated with the shipping of the products to your buyer.
7. Present your letter of credit to the seller, once they have met the specifications of the LOC to the letter, they will be paid for the goods and the international freight forwarder will ship the goods.
8. Following these steps you have arranged an export/import transaction without any investment or taking possession of any products. "Ghosting" is also referred to as "indirect exporting", which is a perfectly ethical and legally acceptable way of doing business internationally. By working within these guide lines you can profit as many others are now doing.
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