BASICS OF INTERNATIONAL TRADE AND BUSINESS FOR BEGINNERS (Must Known Subjects)
hey do you want to start your career in the international trade and business field maybe you want to start your own import export business or maybe you want to work for some other international trade at business companies either way make sure you have to know the basics of international trade and business if you are looking for learning these subjects then you are in the right place because today i want to help you get clarity out of the basic subjects of international trade and business for beginners which are crucial to know before you start your own global trading journey international trade influences a whole range of activities including jobs consumption and the fight against poverty it also affects the environment and relations among countries in turn trade is shaped by host of influences ranging from nature resources to trends trade related issues can give rise to strong feelings and trade measures such as banning or limiting imports are often called further to respond to major economic problems an understanding of benefits and downsides of trade and of what trade policy can or cannot achieve will help us to form our own opinions on debates about international trade if you are looking to expand your business have you considered the advantages of international trade maybe you think it is safer to focus on trade on your home turf but venturing out of your comfort zone to trade internationally may make your business stronger more successful and more profitable we live in a global market place the food on your table might include fresh food from chile cheese from france rice from thailand and olive oil from turkey your smartphone might have been made in china or south korea the clothes you wear might be designed in italy and manufactured in vietnam the toys you give a child might have come from india the car you drive might come from japan germany or south korea the gasoline in the tank might be refined from crude oil from saudi arabia mexico or nigeria as a worker if your job is involved with farming machinery airplanes cars scientific instruments or any other technology related industries the odds are good that a hearty proportion of the sales of your employer and hence the money that pays your salary comes from export sales we are all linked by international trade and the volume of trade has grown dramatically in the last few decades hey my name is murat here to help you start or grow your import export business make more money save more time and help more people too and i'm really excited for you because there are a lot of opportunities and if you know these basic subjects well you can start your international trade business career in the right way now before i dive into this i have a boat request of you please give this video a thumbs up here on youtube that helps the youtube algorithm boost this video and reach more people also do not forget to subscribe to my channel and hit the bell for more great quality content on how to start or grow your international business and change your life let's dive in what's an international trade international trade economic transactions are made between countries it refers to exchange of goods and services between countries in simple words it means the export and import of goods and services export means selling goods and services out of the country while import means goods and services flowing into the country the need to conduct global trade primarily arises from the uneven distribution of natural resources this leads to a division of labor development technical know-how and lowering of comparative cost thus making some countries more suitably placed to produce certain goods and services a smooth flow of international trade ensures that the world economy continues to thrive despite political social and cultural differences in the current state of the world technological innovations have led to globalization and made the world a borderless hall open to all forms of trade at all possible levels no single country can isolate itself from the whole and work towards self-sufficiency a brief history of international trade international trade has a very rich heritage steeped in humble beginnings it started with the barter trade and went on to the mercantile system towards the end of the 17th century mercantilism promoted balanced trade that required the value of exports of a given country at any time to exceed that import in the same period profitability was calculated based on the difference between exports and imports and was referred to as the balance of trade surplus this system paid particular concern to the commodities comprising international trade on these basis exporting finished products was considered beneficial but exporting ground materials was thrown upon the reverse was also true importation of raw materials being favored over that of finnish products the system was therefore highly interventionist with governments seeking to manipulate international trading activities in their home country's favor this led to the next stage of liberalism in the 18th century during which adam smith wrote his book the world of nations this book explained the important role of specialized production a theory that formed the foundation for david riccardo's comparative advantage theory comparative advantage is a law in economics that states that every country should specialize in a certain category of products to sell to others in export and import everything else for local consumption this is what makes it possible for everyone around the world to access goods that might otherwise have been inaccessible these were essential steps in the bringing the mercantilist system to end and and ushering the world into a new economic era towards the start of the 19th century the word adapted professionalism but these two died down after some time by the year 1913 gold was an internationally accepted medium of exchange and there was increased freedom for traders operating across borders even though the first world war temporarily reversed the situation currency fluctuations and economic recession soon got things back to normal in 1927 the league of nations organized the world economic conference and oversaw the development of multilateral trade agreement with the time countries realized that international trade organization regulations could not halt relevance for extended periods this broads the rise of unique regulations and terms of trade for different countries that were updated every so often to keep up with changing trends types of international trades for practical purposes international trade is divided into three major types these are one export rate quite like it is import counterpart export rate is a type of international trade that relies on selling locally manufactured goods and services to foreign countries in theory it's considered to be just the opposite of import trade for example india exports inorganic chemicals oil seeds raw wars iron and steel plastics and diet products to country like china in return china exports electrical equipment organic chemicals silk mineral fuels and fertilizers to india these goods are exchanged between both countries so that they can make the most of their respective production capacities 2 import rate to put it simply import rate means purchasing goods and services from a foreign country because they cannot be produced in sufficient quantities or at a competitive cost in your own country for example india imports 82 percent of its crude oil requirements from countries like the united arab emirates and venezuela this is because these countries poses massive oil fields and are quite competent in exploring processing and transporting oil at an economical rate similarly united arab emirates imports agriculture and april based products from india because it is easier and cheaper to import these rather than produce them in their own country 3. antrapo trade anthropo trade in simple terms is a specific form of international trade that comprises both import and export trade under this type goods and services are important from one country so that they can further be exported to another country this is to say that the imported goods are not used for consumption or sale in the important country instead the important country just adds some value to the goods before exporting them yet again for example if turkey imports rubble from thailand process it and re-exports it another country like germany it would be referred to as ancho portrait unique benefits of international trade international trade offers lots of advantages to individuals and countries as well this is the main reason why the business has streamed over the years despite challenges let us take a look at some of the most outstanding benefits associated with it lower product costs this benefits results from two major reasons first it is easier for manufacturers to produce goods overseas at lower prices this is especially the case in large manufacturing zones like china where economies of scale reduce production costs significantly this advantage is passed on to consumers in the form of lower prices a second way in which this is achieved through high competition in the past when one company had a monopoly over a large area they would take advantage of this and charge whatever prices they deemed fit but in many cases today there are numerous traders from different countries fighting to offer the best possible prices high competition consistently brings prices down to the least possible profitable price efficiency in production processes the high competition also forces manufacturers to try and offer the most efficient in their operations some choose to come up with new ways to produce the same products others hope to improve existing processes for optimal efficiency more efficient processes usually result in lower energy consumption decrease use of raw materials lower labor costs and many other advantages this boon is again passed on to the consumer and they get higher quality products for lower prices this often leads to more eco-friendly processes that reduce their toll on the environment product variety climate changes and other environmental factors greatly limit the kind of food we can access during any given season this would mean going without a favorite fruit or other food product for as long as conditions are unfavorable for its grown or processing but international trade has made it possible to access almost anything all year round it has also made it possible for less developed nations to gain from the technology in their more advanced counterparts this is why almost everyone in the world now has access to electronic products like cell phones tv sets washing machines refrigerators laptops among others regardless of their location this has served to improve the living standards of those is in isolated places or third world countries that do not manufacture such items the market for surplus produce this benefits comes in handy particularly for agriculture based economies farm produce inherently perishable and you have a surplus of it you either need to get market fest or watch it road there are countries whose climate and geological conditions highly favor the production of one kind of food this makes farmers tend to concentrate on that particular product as they are sure it will excel but when it does excel and everyone has an evidence of it then they are forced to sell a throwaway prices just to get rid of the surplus with the export market ever at ready however this is this no longer has to be the case there is almost always a market that needs that surplus products and a means to get it there the same is true for manufactured products at times production companies float the market with similar products and supply overwhelms demand at such times overseas markets take up the excess and keep the manufacturers profitable market fluctuation management all markets in every part of the world are subject to heights and lows there are certain periods of the year for instance when the demand for warm winter clothing is at an all-time high but when summer comes no one needs them anymore and suppliers would have to rest till the next winter comes around however on the international market there has to be at least one country that needs armed clothing at any given time this makes it easy for suppliers to remain in business all year round moving with the season to take advantage of demand this has helped traders to mitigate the effects of seasonal sales fluctuations and enjoy sustainable profitability and growth risks associated with international trade like any other business international trade has also its fair share of challenges in fact due to the ear size of the market these are often magnified beyond expectation considered the most outstanding ones risks as a new international trader you might have to search long and hard for your first buyer the result of such a hard surge is that at times coatition is thrown to the wind and judgment impaired desperation might creep in and make you forget to exercise diligence in verifying new client if you happen to engage a crook you might suffer shock when after making a delivery you receive no payment and leave no trace of their existence online seller risk seller risk have also magnified under the scoop and the volume of trade as well as distances involved a manufacturer might fail to supply the right quantity of goods or might delay in making to delivery due to a variety of reasons they might also fail to supply desired quality of products and compromise your business reputation third party risks the import export business is highly dependent on factors that are beyond your control for instance you might get a bill of exchange endorse or a bank guarantee for payment of goods but when the time comes they might fail to honor the agreement for one reason or another you might have taken insurance cover over your goods in transit but in the event of loss it turns out that the amount you took out does not fully cover your expenses leading to loss other third parties like inspection companies shippers custom agents and others might also fail in their loss and cause you to lose inadvertently geographical risks a country's location may also severely impact your international trade deal country risks could take the form of political uphills economic downturns and conflicts africa's international trade has many times presented this challenge to traders due to instability in some countries in anyone or all three of the above sectors at times also government policies change before the completion of a trade deal and complicate matters countries with financial volatility are also subject to frequent currency fluctuations that could turn a profitable transaction into a complete loss how to start an international business you might have figured out the dynamics of running local business venture but as you can tell from the above risks running an international operation is not for the faint of heart the most reassuring part of it's that no business however small comes completely risk-free furthermore most of the challenges outlined above can be surmounted let's take a look at essential steps in setting up your import export business that will improve your odds of success prepare one of the first steps to set up any business is adequate preparation in this case you need to prepare a business plan that takes into consideration your international market this will help you to assess your needs and set objectives market research carry out foreign market research using the resources available online and at your local chamber of commerce this will help you figure out what products would perform well in which markets and the complexities of getting there evaluate distribution methods there are as many different distributions strategies as there are product varieties establish the most viable methods of getting your products to the intended market this could be true intermediaries like agents or distributors you could also opt for a joint venture with a company in that market or even set up a foreign subsidiary regulations and legal aspects this is often the tallest part of the international business setup process every market has a distinct set of regulations to govern to trade these rules are ever evolving and you need a reliable way to stay ahead of developments or risk incurring penalties congratulations you have officially learned the basics of international trade and business for beginners now start booming and make the world your business also if you would like to learn more about international trade you can watch videos here on my youtube channel now i would like to hear your thoughts i want make sure you get this and prove it to me i want you to do a couple of things for me one hook me up with a thumbs up and number two comment below with then i get it i just want to make sure you understand these basic subjects of international trade and business because they are underlying foundation behind all the scenes of import export works so comment below with then i get it use the hashtag kimrat if you are a part of timurad and subscribe to my channel here so go out there and make some trade be confident and realize that you can export and import at the same time yes make sure you catch some of the other videos over here we got some good stuff coming your way so make sure you subscribe to my channel here thanks again click over here to keep going bye
2021-05-08 08:03
