If you are interested in foreign trade, you have probably heard of import trading companies. This business model plays a fundamental role in mediating international purchases, facilitating the entry of foreign products into the domestic market. But after all, what is an import trading company and how does it work?

Definition of Trading

An import trading company is a company specializing in the purchase, transportation, and customs clearance of goods from other countries. These companies act as intermediaries between foreign suppliers and domestic companies, reducing bureaucracy and optimizing the logistics process.

How Trading Works

The operation of an import trading company involves several stages, which include:

1) Market Research and Suppliers: The trading company identifies the best international suppliers, analyzing cost-effectiveness, product quality, and commercial conditions.

2) Negotiation and Purchase: Conducts negotiations with foreign suppliers to obtain the best prices and delivery times.

3) Logistics Management: Plans and executes international transportation, choosing the best options for sea, air, or land freight.

4) Customs Clearance: Responsible for the bureaucratic part, ensuring that all documentation and taxes are correct so that the goods enter the country without problems.

5) Delivery to the Final Customer: After the product is nationalized, the trading company can store it or deliver it directly to the customer.

Types of Import and Export

Imports can be done directly, when the company takes on the entire process, or through modalities intermediated by a trading company:

• Import on behalf and order: The contracting company delegates the bureaucratic management of the process to a trading company.

• Import on demand: The trading company acquires the products and subsequently resells them to the ordering company.

In export, there are also two modalities:

• Direct export: The manufacturer itself sells its products abroad.

• Indirect export: An intermediary company carries out the sale to international markets.

Foreign Trade Processes

When opting for the services of a trading company, the importer or exporter signs a contract establishing the responsibilities of each party. The services can be complete, covering everything from the selection of commercial partners to the release of the merchandise, or only in specific parts of the process.

Import: The trading company identifies suppliers, negotiates prices and commercial conditions, manages payment and defines responsibilities for freight and insurance, ensuring that all documentation is correct.

Export: It acts in the search for buyers abroad and in carrying out the necessary procedures for sending the merchandise.

Benefits

• Experience and networking: Trading companies have expertise in Foreign Trade and global connections, ensuring safe and advantageous negotiations.

• Bargaining power: Due to the volume of operations, they can get more favorable commercial conditions for their clients.

• Cost reduction: By avoiding the need for an internal Foreign Trade department, companies save time and resources.

• Tax incentives: Depending on the location of the trading company, there may be a reduction in taxes, such as the ICMS (VAT), making operations more accessible.

Advantages and Disadvantages of Hiring a Trading Company

Advantages:

• Access to Foreign Trade specialists;

• Optimization of costs and time;

• Greater security in international transactions.

Disadvantages:

• Some companies prefer internal management of imports to maintain full control over processes.

How to Choose a Trading Company?

To ensure an efficient partnership, it is essential to consider:

• Specialization in the desired segment;

• Reputation in the market;

• Indications and recommendations;

• Transparency in processes and contractual conditions.

By relying on a reliable trading company, it is possible to expand business to the international market safely and efficiently. For this, count on Genco!

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Avoid mistakes when importing!

Having a specialized import consultancy can save you from many future risks. See what Genco Import & Export can do for you:

• Sourcing your product to find the best value for your product.
• Simulating all costs before you embark on this journey.
• Negotiating values with suppliers, freight forwarders, and customs brokers.
• Unifying all documents. Less headache for you!
• Closing the exchange rate for your process.
• Conducting inspections and issuing complete reports for your follow-up.

And much more!

Count on Genco for the best advisory for your imports.

Contact us and learn more about our services!