The export car business is one of the most demandable and rapidly growing industries. Many people don’t know that cars play a serious role in the economy. In 2015, the US imported more than $1.25 billion in used passenger vehicles. On the other hand, they exported approximately $5 billion.
Thus, you can understand that it is a huge amount indeed. And you can be a part of this industry. You can start your own export car business and make it a profitable business. We have given a few details regarding this topic. We will move forward step by step, discussing everything.
What are the Types of Import and Export Businesses?
First, you need to know the basics of the business. Here, we have discussed the types of import and export business. There are three types of business that we are going to discuss.
- Export Trading Company
The export trading company stands for an export trading company. It recognises what the buyers are focusing on and how much they buyers are willing to spend on it. After that, they look for domestic sources that they want to export.
- Export Management Company
EMC stands for Export management company; they usually take care of the operations related to the domestic company. This makes a profit for the companies that sell products overseas. They look after the exporting, like hiring distributors, creating marketing materials, etc.
- Import And Export Merchant
They work as free agents. Generally, they buy merchandise products from the manufacturer and then resell these products around the world.
What is the Startup Cost for the Export Car Business?
You must have some amount in advance for the export car business. You have to purchase office space, equipment, furniture, etc., and you require fixed capital. Not only this, but you also need to handle the day-to-day business. The other expenses include salaries, office supplies, utility expenses, etc.
Knowing About he Market and its Target Customer
After making the decision to run an export car business, you need to know about the startup cost. Then, it’s time to know about the market and the target customers. Now, we need to narrow the path and focus on the market. We have discussed some points that you may focus on.
- The customers that you want to serve
- The vehicles that you will offer.
- The targeted countries and cities.
Type of Vehicles You Should Pay Attention
Now, it’s time for you to decide and focus on the type of vehicles that you want to export. For your information, there are various types of vehicles present that we are going to discuss.
- The light-duty vehicles
These vehicles are meant for transporting passengers and loading less than 10000-pound gross weight like the cargo and tracks.
- Scooters and motorcycles
They include lithium-ion batteries, fuel cells and lead acid batteries. They are smaller and lighter, and they also provide high engine power.
- Recreational vehicles
They are motor vehicles that are designed for living quarter accommodation. The vehicles include dirt bikes, ATVs and snowmobiles.
- Heavy-duty motor vehicles
You can call these commercial trucks and buses.
Choosing the Target Country
It is very important to pick the right target country. We have discussed the points related to this topic. It is in question formate.
- Whether you are able o speak a foreign language.
- Any connection aboard?
- Have you ever lived or gone overseas before?
- Have you ever travelled to any particular country and covered a maximum area?
- Whether you know the culture of any particular country and know a lot about it.
After that, you need to have good research on the targeted countries and all the requirements for handling the business. You must go through the registration and other related documents.
Registration of Your Export Car Business
You need to register your export car business. To do so, you need to register it from the US Department of State’s SNAP-R company. First, you need to submit your details, and then the department will send an email that will contain all the instructions related to CIN. CIN stands for company identification number, and it is very important. It will help you with tax purposes and other requirements.
License for the Export Car Business
Though US Customs and Border Protection does not require a license for exporting vehicles but still there are other government agencies that might require one. You need to pay equal attention to this as well.
Business Insurance
Insurance is equally important other than a license. You must work safely and lawfully for insurance. It benefits you by protecting the financial well-being of the company if there are any accidents. Firmly peaking, they cover your losses. For different businesses, you will get different insurance policies. It would be better to go with the General Liability Insurance in case you are unsure which one to pick. Other insurances are also there that you want to go for, like Workers’ Compensation Insurance. In states, there are many businesses that carry this insurance.
The Business Model
The business model is very crucial for your business. You need to pick from the commission model and retainer model. For the easier one, you can go with a commission model. In case you notice that the sale is very slow then go for the retainer model. Make sure to do deep research before jumping into it.
Forming LLC And Incorporating It
If you are doing an export car business, then you don’t need to incorporate and form an LLC. However, creating an LLC will have good enough benefits. We have discussed the benefits below.
- Separating personal and business assets.
This means that it can help by protecting personal assets.
- Expense deduction
You will be able to deduct business expenses before getting the income.
- Enhance credibility
Customers, most of the time, prefer incorporated businesses. They seem that they are more legitimate.
Conclusion…
We have mentioned all the points that you need to run or start an export car business. All the necessary points that you need to know are mentioned here. We have also mentioned some of the exporters of the world, like Germany $142.3 billion, Japan $98 billion, US $ 56.2 billion etc.
