Sep 12
Trade is as old as world because since the beginning of time people have traded one thing for another. While in Middle and Renaissance ages international trade was considered as trade of natural resources, latter people understood that it is quite wise and profitable to improve a resource or item to increase its value and thus make more money by selling it.
Of course simple trade of natural resources can be very profitable as there are no added costs, just the cost of producing it, but it is only profitable for large countries or corporations with access to an abundance of natural resources. For smaller countries and companies it is actual more profitable to trade items with added value. A simple example – you can trade iron ore which is quite simple to produce and is fairly cheap or you can turn this iron ore into steel. That requires additional time and cost, but the added value significantly increases its value. For countries with few or no natural resources this is the only way to conduct a profitable and sensible trade. So they import fairly cheap raw materials and turn them into items with added value. Generally in long term the trade in value added items is considered more viable. It is also a more efficient usage of raw materials and rare natural resources. Currently many governments encourage their companies to produce and export more value added items. Some governments even offer special beneficial programs for manufacturers of high value added goods.
Well you might say that trade is trade no matter what you trade, but you must remember that sooner or latter we will have used up all natural resources. So a value added goods trade is a better option in the long term. It might be a bit harder to do than simple trade, but in long term the profits will be much higher. But after all what you do is up to you. This is just an opinion.
Jun 21
Today globalization is big and everyone is trading with each other, but in most cases when we think of international trade we think about huge corporations or government controlled enterprises conducting business with each other and making profits. Actually international trade is open for everyone and can be profitable to the smallest enterprise or even an individual person.
In most cases small and even medium sized enterprises conduct their business locally, meaning they buy goods from a local wholesaler and sell them to the local customers. In general nothing is wrong with that. Domestic market can be very profitable and exporting for a small enterprise can seem tricky, but why buy the goods from a wholesaler? Of course it is easier, but in no way it is more profitable because the actual price of the goods is significantly smaller if you import it directly. Yes it can be difficult and requires some know-how on your part, but on the other hand the profit you can gain from that is considerably larger. Basically the wholesaler acts as a mediator and why you should pay money for something you are able to do on your own. Importing can be tricky; especially the first few times when you are dealing with reprehensive for some exotic countries, but business in general can be risky. On the other hand importing can be very easy because you have the internet and various tools at your disposal and if you know a bit of English no one can stand in your way and the potential for profit is unlimited. Why should not you use the enormous potential of global international market?
This is only about the import part, but when you become experienced in it you can turn the tables and think about export thus expanding your operations from a domestic market to global market and infinite possibilities. And if you do not want to export there is still an option to become a huge wholesaler and use your know-how to earn your money by providing your service to the more inexperienced.
