Your company, XYZ Trading, also imports attractive products for domestic sales. Your new job is to 1) help grow the company's business by identifying new products for import and 2) develop an import plan for these products.
Select a product category that you believe could be an attractive import opportunity. If you are a U.S. resident, assume that the United States is your base and domestic market. If you are a resident of another country, you may use either the United States or your country of residence as your base and domestic market.
Your assignment is to write an eight- to 10-page import plan. The requirements and grading rubrics for your paper are provided below.
For your import plan:
a. Write an introduction that states the purpose of the document; the name of the fictitious company, its location, and its import strategy; and a summary of the subjects that will be covered in the plan.
b. Choose a product category and briefly justify your choice. For example, if you chose to import musical instruments, you might argue that many young people want to learn to play a musical instrument and that if you can find low-cost instruments that are easy to play and are of at least minimally acceptable quality, there could be a market for the product.
c. Select a country and vendor from which you can source your product.
d. Obtain a price and terms of sale for the product at the point of origin. (You can research this by using websites such as Alibaba.com, as discussed in the modules.)
e. Calculate a landed cost in your home country. You may either choose a specific shipping point or use the manufacturer's factory or shipping port, and then choose a port of entry in your home country. List each component of the calculation, including your profit.
f. Identify any cultural, ethical, and legal differences between the exporting country and your home country that could have an impact on your business.
g. Check your home country's import regulations to determine whether there are any restrictions regarding importation of your product.
h. Identify your home country's import policies for your product, including customs duty, import procedures and requirements, and required documentation.
i. Identify and describe any safety regulations or other technical standards that apply to your product.
j. Determine whether there are any established trade agreements between your country and the export market, and explain the implications (if any) for your business.
k. Make an artificial unit-sales estimate that will generate at least $250,000 in profit to provide financial information for your recommendation.
l. Calculate a selling price, assuming that you want to earn a 25 percent margin and that your customers (e.g., vendors, distributors, retailers) will earn a 50 percent margin. State your pricing and marketing strategy, and justify it.
m. Using the information you have gathered, prepare a step-by-step plan that describes all of the actions you need to take to execute this plan successfully. Be sure to describe all of the steps necessary to import the product.
n. Use the grading rubric below as your guide.