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JUMPSTART
IMPORTING EXPORTING ADVICE By Jim Coke
From Hong Kong’s Coffee and Beer Importing Guy
While it’s true that many new startups popping up in Hong Kong are tech-oriented, Hong Kong’s is built upon traditional commerce, and almost every other day somebody starts a new import/ export company. Often times, these aren’t considered “start-ups” in the way we’ve come to think about the concept, but they certainly are and deserve as much attention and recognition as those in the technology field. Listen to the Market I’ve heard of many business ideas and seen several import/export businesses fail in Hong Kong. I cannot tell you for certainty what caused their demise but I know what is crucial: listening to the market. Many business people think something is a good product and that may be so in their own country, but the reality is that the Hong Kong market is a different beast. Talk to the distributors and managers, read market reports and finally test the market with a small sample before even committing yourself to an idea or product. The classic Hong Kong mistake is to order a container of a product and then try and sell it. Please do not do that. Relationships that evolve into buyers usually take 6-12 months. You need to get a lot of rejections before you get a nod from somebody. The rejections are the market talking to you. Listen to the market and hear what they are saying.
Carry Trade Now that you have listened to the market and conducted a small test sample, what do you need to get your import/ export or manufacturing business off the ground in HK? My first advice is to identify a specific “carry trade” you like and are comfortable with. By carry trade, I mean a specific trading opportunity that allows you to buy something for x dollars, add y value and sell it for z dollars. In my case I bought coffee beans from Jamaica, roasted and packed them in Hong Kong and then sold to ParknShop. My margins were clear and simple. Minus my fixed, variable and unforeseen costs, I could see that being single-minded and repeating the process 100 times would make a decent chunk of change. It’s not always easy to find that perfect arbitrage position but when you do, my advice would be to lock it in.