There are many risks involved in starting a business or owning a business, and yet a lot do not get the time to share them. The same is no excuse for what we call mini-importation, where small businesses, self-owned or individual businesses, come across a lot of risk during mini-importation, that is importing items from a different country into their own and selling them at a higher price to make some good profit.
For new beginners who do not know the way around it, they get themselves locked up in losses and debts, and costs that they were not ready for and least expected. The sad part is that those who have experienced such unfortunate incidents do not get the time or have the voice to share with the larger population who are planning to import items, either for use or to resell. For this reason, I approached Louisa Adubea Kyei, a friend of mine and the president of the KNUST Peer Counselling committee, who has been in the importation business for the past two years, to share with me some of the risks involved in mini-importation so I could share with the rest of the world.
Understanding Mini-Importation: Why People Are Attracted to It
Mini-importation has actually become popular because a lot of people are moving into that area, encouraging it, and exposure to B2B platforms that sell at lower prices. However, according to Louisa, mini-importation has become popular because many people believe it to be that simple on the surface. She expanded by saying that "You'll notice people buying stuff from China, Turkey, the US, or the UK, showing it off online, and then selling it quickly."
But, as Louisa shared with me, Mini-importation is not just about buying items cheaply and selling them at high prices. According to her, there are many hidden costs and risks involved that people talk about. As she hammered on, understanding these risks can save a lot of beginners from a lot of mistakes, pains, and financial losses. Let us get into some of the risks she spoke about.
1. The Risk of Dealing With Unreliable Suppliers
People can be greedy, selfish, cunning, unreliable, and suppliers are no exception when it comes to these things. One of the biggest risks involved in importing items from abroad, as Louisa shared, is when you trust the wrong suppliers. For the common supplier-related problem she spoke about:
- Persons may receive items that look nothing like the sample they ordered
- Suppliers changing prices after you have made payment
- Suppliers who disappear completely after you have made payment to them
- Fake tracking numbers or delayed shipping updates (very common)
As explained by Louisa, she said, when she started, she relied a lot on online suppliers and WhatsApp suppliers without proper confirmation or verification. While some transactions went well, others also ended up in losses because the supplier was not genuine.
As tips from an expert who is already in the game, she advised that individuals use platforms like Alibaba, AliExpress, or verified sourcing agents that are verified. She also said, individuals should always:
- Ask for product samples
- Check reviews and review transaction histories
- And avoid full or upfront payments where it is possible
2. The Hidden Costs That Always Reduce Profit Margins
People go into business with the aim that they are able to maximize profit. But for mini-importation, sometimes, it doesn't work out the way you expect it to. She explained that many beginners calculate profit using only product cost and selling price, forgetting other expenses that come later.
The Hidden Costs Often Include
- Custom duties as well as income taxes
- Clearing fees and handling fees
- Fluctuations in currency exchange
- Storage fees at the port or the warehouse
- And also, the cost incurred locally in the area of transportation
From her own experience, she shared that during one of her imports, the customs charges alone almost wiped out nearly half of the profit she expected because she did not budget for them properly in the first place.
3. Not Receiving Some Ordered Items
One of the risks involved is also not receiving some of the items you ordered. Some may come, and some may not come. Mostly, these are blamed on some suppliers, who take the money and never send you what you ordered. In these kinds of situations, you may have to refund the money to the person who may have ordered the item from you.
4. The Risk of Goods Being Seized or Delayed at Customs
Another serious risk she elaborated on is the seizure of goods or items by customs or delays that are prolonged.
- Goods are declared incorrectly
- Goods falling under restricted or prohibited items
- The required documents for the goods are missing
- The one in charge of importing lacks proper registration
These delays may cause a person to
- Loose customers
- Incur additional storage charges
- Have perishable or fragile items damaged.
5. Quality Control Problems
Quality issues are very common, especially when importing in bulk. She shared that she had received defective items and ones with low functions that she had not expected when she received items before. Items may have poor packaging, which leads to damage, faulty electronics, and wrong sizes and colours of items.
There are other risks she mentioned, which include bank charges and transaction fees, delays in confirmation of payment, and high market competition at a particular point.
Lessons From Her Experience: What Beginners Should Do Differently
From Louisa’s two years of experience, these lessons are the ones she says stand out:
- Starting small and learning gradually as time continues
- Having and establishing a good relationship with trusted suppliers
- And never invest money you know very well you cannot afford
Experience, she says, is the most expensive teacher in importation.
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