In an effort to compete on a global scale and develop at the same time, many businesses have undertaken the practice of import export services. Since each country and business has only specific resources, they can boost their development by importing the resources that they lack and export the ones that they have in abundance. Such a trade practice is beneficial for not only businesses and organizations but also for individual consumers as well as the country as a whole by aiding its development.
Advantages of Import Services
- Low Cost: Import is a cost-effective option as businesses find it viable to buy products and resources from other countries which offer them at a comparatively much lower price. The low labor costs and low taxes in the foreign market make the price of products lower wherein a business buying them can save on the manufacturing cost. Bulk order then saves the cost further. This increases the profit margin for the businesses importing goods and raw materials.
- Quality Products: Businesses ensure that they get high quality products by collecting information of quality manufacturers and even visiting them to ensure that only the good quality products are imported. The government also provides information of suggested manufacturers to these businesses. The government’s involvement not only ensures excellent products but also helps in reducing the risk involved in the transaction. Moreover, businesses import a particular good from a country which specializes in the product. For example, the labor of Japan is highly efficient in producing technological items and so has become the preferred choice of the manufacturers in the countries like UK and the US.
- New Products Introduced: Import enables entrepreneurs to introduce certain new products in the market of their country which they were not aware of before. They do so after extensive market research in order to determine whether there is a need and demand for the product or not, and whether it would be beneficial for the masses. These trades further benefit the residents of the recipient country.
Advantages of Export Services
- Profit: While a producer or manufacturer has a smaller market locally, he benefits majorly from foreign orders that place orders in bulk. Innovative and quality products further attract bigger sales. Such a sale of products in bulk amounts brings increased profit to the manufacturer and more foreign exchange for the country.
- Development of Economy: The entering of businesses in international market increases their sales potential by expanding their market. With a number of medium-scale as well as large-scale businesses entering the international arena, their profit margin and growth of their countries economy is augmented.
- Employment: Since a number of big dealers from developed nations of the US and the UK find labor of countries like India to be cheaper, they prefer in hiring this labor and also the raw materials for manufacturing products for them. This helps in generating huge employment opportunities for people of such developing nations.
This aspect of import and export in international trade is highly beneficial in some way or the other for both the parties participating in the process. One can thus increase their business potential and profit margins by entering the global market through export, while others can save up on expenses by importing cheap raw materials, products, and labor from developing nations. It is up to the businesses to calculate the risks and take a decision accordingly.