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Import/export guide: Brazil

If you’re a people person who loves Brazil, an import/export business could be for you.

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Do you speak Portuguese? Do you have connections in Porto de Paranaguá? Have you lived in São Paulo? Maybe you simply love the country of Brazil.

In the import/export industry, you can use your individual competitive advantages to serve as a matchmaker for companies in Brazil – matching product manufacturers with markets that want and need to purchase the goods they produce.

If businesses in Brazil want to export their goods, you help them find buyers. And if they’re looking for specific merchandise, you help them find sellers.

With dedication and this guide, you can become a part of the estimated US$162 million in goods and services traded between the Philippines and Brazil in 2018.

Types of import/export businesses

There are three basic types of import/export businesses. Starting out, it’s a good idea to pursue the one that interests you the most.

Export management company

Let’s say a company in Brazil wants to export iron and steel. That’s where an export management company (EMC) can help.

An EMC handles all of the details for the company to ship goods overseas. This could include hiring distributors, creating marketing materials and preparing shipping logistics.

Export trading company

An export trading company (ETC) finds out what foreign buyers want and then locates domestic companies that can export the goods.

Import/export merchant (or free agent)

Import/export merchants buy merchandise from a manufacturer, foreign or domestic, then resell that merchandise around the world. There’s heavier risk involved in being a free agent – but with fewer middlemen, there’s the potential for higher profits as well.

Compare transfer companies for doing business with Brazil

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USD 3.99
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Startup costs

You can start your own import/export business with little upfront costs.

At a minimum, you need a phone and a reliable Internet connection. You’ll also want to invest in business cards, a website and a fax machine. And it doesn’t hurt to hire somebody for your branding, including someone to make a unique business logo.

Interested in starting your own business? Check out what you need to get started

Narrowing your market

Once you’ve decided on the type of import/export business you want to run and calculated your startup costs, it’s time to narrow your market focus.

By niching down, you can focus your attention on a market you can serve best. Think about the following:

  • Customers you want to serve.
  • Areas of the world you’ll target.
  • Types of goods you’ll offer.

Take your time to dig deep with your research. The extra time you spend finding profitable niches will pay off in the long run.

Your customer

Your target customer will be someone who wants to trade globally. They’ll either want to sell goods overseas or buy goods from international sources.

Beyond that, you can choose any type of customer you wish. Maybe you’ll cater to companies that sell Brazil’s No. 1 export, soybeans. You may also decide to work with companies that export cars or coffee.

If you can identify a need, you can target a group of companies as customers.

Brazil’s top 10 exports

  1. Soybeans
  2. Iron ore
  3. Raw sugar
  4. Crude petroleum
  5. Poultry meat
  6. Sulphate chemical wood pulp
  7. Planes, helicopters and spacecraft
  8. Coffee
  9. Soybean meal
  10. Cars

Source: World Bank

Regulation, licences and permits

Imports

Machinery imported into the Philippines has to pass strict biosecurity rules. If it doesn’t pass, it’ll be exported back out of the Philippines at your own expense. These rules boil down to:

  • The machinery must be free of all contamination like soil or plants.
  • If the machinery has been used, you’ll often need to organise an import permit before it arrives.

For the guidelines on specific machinery, you can find out more on the Department of Trade and Industry’s Import Facilitation website.

Exports

Before you can export your goods, you’ll need to register your business with the DTI. You can get started by registering your company name with DTI’s Business Name Registration System and choosing the right business license. You will then need to secure various permits from your local government unit, then apply for a business tax identification with the Bureau of Internal Revenue.

A note about importing goods into Brazil

The Brazilian government controls federal trade through a complex system called Siscomex. Though imported goods do not require a licence, they must be registered with Siscomex.

Contact a professional to learn more about registration, tariffs and any restrictions that could affect your business.

Charging for your services

An import/export business typically charges based on commission or retainer.

Commission structure

With a commission structure, you’re paid a percentage of any trade deal you close – usually around 10%. For example, if you sell a manufacturer’s smartphone for US$300, you’ll make a US$30 commission. On top of your commission, you’ll also want to charge for expenses like packaging and shipping.

Retainer model

On a retainer model, your client pays you a monthly fee to be on call when they need your services.

To find the right amount for your retainer, consider your costs – these may include labour, supplies and overhead.

An alternative model

Beyond a commission or retainer structure, you can simply buy goods and sell them. In this case, your revenue will come from the profit you make from selling merchandise.

Which business model should you choose?

A good rule of thumb is to pick a commission model if you think a product will be easy to sell. However, if you think a product will be difficult to sell, price your business based on a retainer.

The thinking is based on this: If you’ll sell a lot of product, you want to be paid based on performance. On the other hand, if you believe sales will be slow, using a retainer model could ensure that you’ll be paid even during the downtime.

Finally, if you’re confident in your ability to sell products you acquire, you don’t have to negotiate a payment structure with manufacturers. All you’ll have to negotiate is how much you’ll buy a product for and then find a way to profit from the merchandise.

International billing and payments

Your new business will require you to make and receive international payments, which means you’ll make transactions between currencies and across borders.

You can safely and affordably manage your business payments – with lower fees and stronger exchange rates – by comparing the services of a money transfer specialist.

Tips on sending money to Brazil

Shipping the goods

You need to send and receive goods from other countries, so you’ll need to arrange shipping details.

First, contact a freight forwarder – a company that helps you transport goods safely and efficiently. They will help you handle the logistics of completing shipping documents, finding cargo space and securing cargo insurance.

Find a freight forwarder by looking in state-specific business directories.

After you’ve hired a freight forwarder, read our shipping guides to learn how to ship merchandise.

Risks and how to avoid them

Unpredictable shipping logistics

Needless to say, your success hinges on whether you can ship goods safely and efficiently. If you’re exporting goods, for example, you’re responsible for ensuring they leave your local port and arrive at the correct destination on time.

You’ll also need to account for anything else that could go wrong, such as damage to the cargo. Staying organised and partnering with a reputable freight forwarder will help you ship goods without a hitch.

Not knowing enough about markets

It’s a good idea to thoroughly research a market before entering into this business, though even that may not be enough.

Consider hiring experts who understand the tastes and cultures of your specific markets. You’ll need to sell products that resonate in countries you’re unfamiliar with.

Running into problems at the border

Customs rules aren’t uniform throughout the world. Instead, you’ll encounter a mass of different regulations while transporting goods. To avoid drowning in a swamp of border regulations, hire experts in customs law and trade compliance.

Bottom line

The import/export business is for people who love building relationships in other countries, but it also requires an organised mind that can handle logistics.

If you have those qualities, take the plunge into creating a thriving import/export business.

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