Starting an international trading business

As some of you might know, I started a business selling stuff ex. Greater China to the west 3 years ago.

My background was a MA in Asian studies with a minor in business/economics, 3 years as a financial analyst in Taipei, and a good year being the export sales manager/everything foreign/whipping boy for a local company making and selling espresso machines.

My studies and sty-related work made me fluent in Mandarin, IE in speaking, listening reading and writing Chinese with a high degree of fluency. All meetings with suppliers are held in Chinese, and I am completely at home with the rapid-fire version where 3 persons tell you 3 different tings at once.

The job as financial analyst taught me a way of thinking, IE that everything regarding business as money at the end of the day, I also got a semi-soft introduction to Taiwanese company politics and how Taiwanese companies actually work.

Later at the coffee machine fuckup, I tried my hand at planning market entry, marketing to overseas customers, and I also tried to a few trade shows and some business travel/sales trips. I did gain a few connections and got the fuckups into a major market, and also found a target customer group for a range of products. (The thing I do was actually suggested by a customer).

I learned the bones and actual bits of exporting etc. at the coffee machine fuckup as well - what to be aware of and stuff like that when it came to actually exporting.

That was my background, and I set out feeling that I had a semi-decent basis for starting a trading company dealing in products from a related but very different industry.

Beginner’s screwups took a year, and there have been rumblings since. I have sued suppliers, been sued by them, but strangely enough not lost any significant customers. Building a customer base was painfully slow at first, however that has slowly improved, I am now there where I add customers in a steady stream and most walk in the door by themselves. My industry experience was zilch and so was my supplier network, and getting that down was hard, and cost me business the first years.

My business is now increasingly succesful and fairly stable, with a very strong orderflow, and my order visibility is now 4-5 months out in the future, IE I get told by the customers when they plan to order etc. so I can coordinate at this end. Also, from a low base turnover had more than doubled every year to a now very respectable figure. I feel very confident in what I do, and I feel how the interest is constantly increasing. I don’t dare to become complacent yet, as I remember the tough start rather well.

The important thing to me is to make sure that relationships with customers run well, and that the quality is monitored very closely. I spend lots of time checking out potential suppliers, but I am very choosy about who I work with. I try to spread orders out among more than one supplier, but at the same time, I keep the number of suppliers small. I spend as much time on factory floors as possible, trying to keep abreast of how they do things and how the factories actually work. I drink with the suppliers, get to know them, and let them know me and my expectations very well. When I go overseas for no matter what purpose, I spend significant time of my vacations visiting possible customers, and when I can afford it I go on sales trips. I try to understand as much about each customer as I possible can, looking for even the faintest trace such as a purchase order in order to glean more information about how that customer actually work.

It would appear that people of verious backgrounds have begun to ask me how to become a succesful trader :noway: . That has made me think - what makes a succesful trader? Who would you recommend to start such a business. What set of skills should you try to get before starting and how would you go about getting them?

Ladies and gentlemen - please discuss.

My take on it: Just start a business and wait for the money to roll in. easy!

If it was that easy everybody would be doing it. What matters what you can when you start. What you want to do. How you do it. How much ground work you are putting in, and how much of that you pour in the right direction.

Your staying power also matters. Are you willing to work 1-2-3 years for free?

Also, your selling skills, your negotiation skills, along with the ease which with you you work with suppliers, who not always have the same interests as the ones you have.

What I am aiming for is to get some general ideas about what makes a good businessman able to make the connection between Chinese and Taiwanese suppliers and the overseas customers, entrusting said businessman with the objective of ensuring that they receive their goods on time, in the promised quality and in the promised quantities, and on the top of that add a service which makes the customers come back for more.

As you mentioned, staying power and the willingness(ability) to work for free for a few years are essential.

For me, I am lucky to have a ready buyer, but for others that issue must also be addressed.

In my opinion, nothing is better for learning the ropes than by doing. By doing I mean getting into a local company that does international business and grasp all they can teach you while you struggle to get them to believe your ability. Who cares in the end if you are able to do it, the make or break of it is what you are able to take away at the end of the day.

example: My friend does trading with entertainment equipment. He started off working at a local company and made many contacts. from these contacts he was able to obtain better positions in other countries. Now he is back in a lucrative trade. All from putting in the time to “learn” the trade.

For myself, a few years in differnet companies has helped. Do I still have much to learn? Sure! But in the end, that is the point besides the money. Learn so that you can make better decisions.

Without experience in some field, international trade will be a long, slow process. My advice: Gain experience at others expence and work at a company for a few years. We all have to suck it up sometime, might as well get paid for it.

Er, that is my 2 cents worth for whatever that means.

[quote=“spelunko”]

Without experience in some field, international trade will be a long, slow process. My advice: Gain experience at others expence and work at a company for a few years. We all have to suck it up sometime, might as well get paid for it.[/quote]

Well, this is interesting. I’ve only been working at a local company for a few months and I’m learning a little bit at a time. However, since I’m only in the marketing dept, I don’t get any of the contact with suppliers/customers.

I do have an interest to start my own trading company and I already have buyers (friend’s of my gf father that need overseas products).

So, the dilemma that I seem to be facing is this: when do I break out and try on my own? As long as I’m working for the local company and have my salary and ARC all taken care of, I’m safe under their protective umbrella. I don’t think I’ll get hit with the reality of what it takes to get the job done until I’m doing it on my own.

Trading takes some falling and learning to pay attention to the right details, no?

[quote=“rocky raccoon”][quote=“spelunko”]

Without experience in some field, international trade will be a long, slow process. My advice: Gain experience at others expence and work at a company for a few years. We all have to suck it up sometime, might as well get paid for it.[/quote]

Well, this is interesting. I’ve only been working at a local company for a few months and I’m learning a little bit at a time. However, since I’m only in the marketing dept, I don’t get any of the contact with suppliers/customers.

I do have an interest to start my own trading company and I already have buyers (friend’s of my gf father that need overseas products).

So, the dilemma that I seem to be facing is this: when do I break out and try on my own? As long as I’m working for the local company and have my salary and ARC all taken care of, I’m safe under their protective umbrella. I don’t think I’ll get hit with the reality of what it takes to get the job done until I’m doing it on my own.

Trading takes some falling and learning to pay attention to the right details, no?[/quote]

You are at least picking up relevant experience, and that’s good. Don’t underestimate the knowledge you are gathering. I would imagine that you would be able to jump into a customer related position in the overseas department in a local company 1-2 years down the road.

Why break out and do it full time?

You could start by getting your GF’s fathers friends to give you a list of what they want, and you could then start looking. If you find them and the customers are interested, then try to work out things from there. Look at pricing,specifications, certs needed and all that stuff, try to get a grip on how you get the stuff to the customer. Once you got an idea of pricing and priduct, present it and see what they say. It’s god if you are related to them, they might give you more leevay and time than normally needed.

Also, see if you can do it part time intiially, even though it’s hard when working a Taiwan 9-18 job. Take time off if you need to go and see a supplier (Pretend to be ill). use your lunck break in creative ways. Take advantage of the fact that the customers are in a different time zone, so you don’t need to be sitting at the phone from 9-5.

If nothing comes of it in the end and you have spent some time on it, take it as a learning experience. They are all good.

Yes, that’s a definite possibility, especially since my local company doesn’t have any office in the States yet and that’s where I’m from.

[quote=“Mr He”]
Why break out and do it full time?[/quote]

Because only my boss makes the real money. Even if I’m able to get into sales, set up an overseas branch office, I’d still be under the Taiwanese company’s umbrella.

[quote=“Mr He”]You could start by getting your GF’s fathers friends to give you a list of what they want, and you could then start looking. If you find them and the customers are interested, then try to work out things from there. Look at pricing,specifications, certs needed and all that stuff, try to get a grip on how you get the stuff to the customer. Once you got an idea of pricing and priduct, present it and see what they say. It’s god if you are related to them, they might give you more leevay and time than normally needed.

Also, see if you can do it part time intiially, even though it’s hard when working a Taiwan 9-18 job. Take time off if you need to go and see a supplier (Pretend to be ill). use your lunck break in creative ways. Take advantage of the fact that the customers are in a different time zone, so you don’t need to be sitting at the phone from 9-5.[/quote]

I’m doing all of that right now, so it’s good to see that someone with your experience is suggesting all that right now. I’m heading out to visit the friend’s factory every other Saturday and he’s teaching me a lot more about the products they need.

I know I’m working hard and I won’t give up. It’s just that whole patience thing that’s a real pain in my arse right now.

But, at least I get to vent some of the frustrations on here. Thanks for sharing your guidance Mr. He.

[quote=“rocky raccoon”]

[quote=“Mr He”]
Why break out and do it full time?[/quote]

Because only my boss makes the real money. Even if I’m able to get into sales, set up an overseas branch office, I’d still be under the Taiwanese company’s umbrella. [/quote]

Just clarifying - I would start it out part time if I could. the only reason to that I started full time was that I hated my job. If you can do it on the side while working for somebody else, you are a fair bit better off.

[quote=“Mr He”]

Just clarifying - I would start it out part time if I could. the only reason to that I started full time was that I hated my job. If you can do it on the side while working for somebody else, you are a fair bit better off.[/quote]

Yeah that sounds good.

Re: samples.

Mr He, if you’re doing trading from China to overseas clients, what’s your SOP for samples sending?

Obviously a client won’t buy unless they can see the quality of the goods they will be purchasing.

I try and get the factory to send the samples to me, free of charge and freight prepaid, and then I let them know that I’ll forward them to my customers in Europe or USA for final inspection.

But sometimes it difficult for first business because they don’t want to take the risk. (Even though it’s only 10-20usd for the courier.) They often have the product that I want, but won’t cooperate and meet me halfway.

I’m just afraid that if I pay for the samples from a new potential supplier every time, that they’ll feel like they have a “leg up” on me.

It’s hard to keep the balance so they know that they’re working for me and not the other way around.

[quote=“rocky raccoon”][quote=“Mr He”]

Just clarifying - I would start it out part time if I could. the only reason to that I started full time was that I hated my job. If you can do it on the side while working for somebody else, you are a fair bit better off.[/quote]

Yeah that sounds good.

Re: samples.

Mr He, if you’re doing trading from China to overseas clients, what’s your SOP for samples sending?

Obviously a client won’t buy unless they can see the quality of the goods they will be purchasing.

I try and get the factory to send the samples to me, free of charge and freight prepaid, and then I let them know that I’ll forward them to my customers in Europe or USA for final inspection.

But sometimes it difficult for first business because they don’t want to take the risk. (Even though it’s only 10-20usd for the courier.) They often have the product that I want, but won’t cooperate and meet me halfway.

I’m just afraid that if I pay for the samples from a new potential supplier every time, that they’ll feel like they have a “leg up” on me.

It’s hard to keep the balance so they know that they’re working for me and not the other way around.[/quote]

In most cases if I don’t have an already working relationship with a factory I would not expect a free sample from them.

Depending on my potential end customer I would either front up the money myself, again if I had an existing working relationship with them or knowledge of their company. Otherwise I would quote them a sample price… if they are not willing to pay for a sample, you can expect they may be hard to deal with in the future or just yanking your chain.

Another point to consider is that it is v.important for you to get your hands on a sample to review yourself and ensure you are happy with the quality of the product, because ultimately you/your company are offering it to your customer and you want to be sure it is fit for the purpose it is intended otherwise selling a piece of crap makes you look bad.

I have a DHL account, which I use for importing samples, and also for sending things to China when needed.

In what I do, samples are always free, unless it’s a special material made to custom specifications, and at a certain minimum.

The Chinese don’t want to pony up for the courier charges, no skin off my back. It’s an investment in marketing, so I pay it happily and make sure that my selling margins reflect that.

And yes, when dealing with chinese companies, I will happily pay for transport of the samples no matter whether I have a customer for them or not. I have seen so many horror factories with great brochures, polished web sites, and good sales people.

If there’s a sample charge of a hundred US$ and up, I write a sample invoice to the customer covering the sample charge, the freight, the T/T charges and a little bit more and ask them to pay before we proceed. If they are truly interested in something they claim they will be buying in huge volumes, the relatively small change needed for the sample should be nothing for them. If they don’t want to pay for that - then well, the world might be full of sellers, but potential buyers aren’t in short supply either.

Good practical advice from Mr. He and others. Ecspecially the part about doing ground work and putting together deals “partime” while keeping your current job.

While working for a company make as many contacts as possible internal, suppliers, and customers. Not only will this help you start your business, but it will make easier to transition into other positions while gaining experince and money.

Does anyone care to share what products they trade and or industry?

Sure, I do flexible packaging.

My web site needs a makeover, however you are welcome to peruse it as much as you want.

Thanks for your feedback and for starting this thread. I am still learning to navigate the site and did not notice your web link until you mentioned it.

Does anyone have success stories about foreigners starting trading companies
in Taiwan ?

Mr He wrote: “What I am aiming for is to get some general ideas about what makes a good businessman able to make the connection between Chinese and Taiwanese suppliers and the overseas customers, entrusting said businessman with the objective of ensuring that they receive their goods on time, in the promised quality and in the promised quantities, and on the top of that add a service which makes the customers come back for more.”

Mr. He do you find it more challenging to deal with China based suppliers as opposed to Taiwan suppliers?

I have been doing, along with an indian friend of mine, a few trading operations for relatives and friends here in taiwan. Nothing as professional as Mr He, since i am clearly only an amateur.
I’d like to emphasize what has been repeated: Do it aside from your day job.

In regards to Taiwanese/Chinese suppliers, i can offer hindsight from one of the largest cutting mats maker in Taiwan. He is French, in his late 40s, and comments on the difference between the two countries as such: The Taiwanese are not afraid to make the investment necessary in machines and development time, unlike the Chinese who will at first try every possible way to save money, delivering you a crap product until they understand they need to put in some money and effort.

From the feedback i get from my “inlaws” who have a factory in China, it seems there is the same kind of “wild wide west” attitude in their industry as far as china is concerned.

Ed, your input about the differences seems pretty consistent with what I usually hear.

I deal with US based suppliers that source products from both China and Taiwan and my suppliers have the same opinion as your French friend and in-laws.

On a slightly different note, how would you guys rate trading in Taiwan vs trading in China. I mean using either Taiwan or China as a base operating as small business and being a foreigner? Perhaps Shenzen vs Taipei, as an example, any information or input on this subject?

Back to Mr He original topic, as far as what it takes etc.

“It would appear that people of verious backgrounds have begun to ask me how to become a succesful trader. That has made me think - what makes a succesful trader? Who would you recommend to start such a business. What set of skills should you try to get before starting and how would you go about getting them?”

About 10 years ago in Taiwan while I was “picking the brain” of a successful trader, he floored me with the simplicity of his advice. He was the father of a friend from school, and I was planning on learning all these “secrets” about sourcing products etc. He just simply looked at me and said “you must sell.” “Selling is the most important skill.”

I know there are many other important skills, however, I would venture to guess that most people who consider a trading business might overlook the importance of selling. I did.

This is why there is opportunity out here. There are plenty of companies who would not buy direct from China/Taiwan if hell froze over but will happily buy Chinese made goods as long as they have a native point of contact.

[quote=“kfed”]
On a slightly different note, how would you guys rate trading in Taiwan vs trading in China. I mean using either Taiwan or China as a base operating as small business and being a foreigner? Perhaps Shenzen vs Taipei, as an example, any information or input on this subject?[/quote]
The way i see it is that it depends what you will be running after. To me Taiwan has come to specialize in speedy and clean delivery of higher-tech higher-design products in sometime smaller series than what you would find in China. On the other hand China seems to be the place to mass produce at very low cost, albeit within a riskier environment. I have heard numerous stories about people getting owned in China (the most funny one certainly being Mecaplast, an automotive engineering giant from Monaco, who received a container of soil compressed to look like brake pads…), and 2 years ago my in-laws lost a significant sum to a Chinese client. I am not even talking about issues related to corruption, delays…

Due to personal tastes, i am looking to deal more in products with a higher added value, whether high-tech or not, and Taiwan is for me the place to start production before maybe moving it to China once the competitive environment change.

On a further note i am amazed at the amount of products that small and medium companies in Europe could source from China. I recently had an introduction with a company producing “bullet-proof” doors (sorry i don’t know the English term) who was looking to replace its internal steel protection with carbon fiber to drop drastically the weight of its high-end products. If it was to be produced in Europe the end-price was way out of norms, and we are discussing to see what can be done over here.

llary, thanks for your positive outlook and for that investor’s visa thread, top notch.

Ed, keep us updated on the carbon fiber door project.

There are times that I start to think that because of communication and ease of travel that many trading opportunities have faded. However, as you guys point out there is still plenty of opportunity.

Anyone ever done any business in Dalian?