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Import and export guide for Saudi Arabia

So, you’ve had some experience related to Saudi Arabia. Maybe you have some important connections there, or you love the culture. Or you’ve moved there and made it your new home. And while you’ve managed to find a way to make your move simple, what about your business? Are you thinking about joining your old and new connections and making a successful business out of it? While the import and export business is complex, it doesn’t mean that it’s impossible to experience huge success in doing it. Read on and learn the basics of this kind of business in Saudi Arabia.

Types of import and export businesses

Choose one of these three export/import businesses, according to your needs.

  • Export management company – a company that facilitates the distribution of manufacturers’ goods and they handle everything from hiring distributors, promotion to shipping logistic
  • Export trading company – an independent company that provides support services for companies that can export the goods.
  • Import/export merchant – or a free agent buy merchandise and then resell it around the world. Obviously, the risks are higher, but so are the potential profits.
Globe, Saudi Arabia
There’s more to learn about the market and regulations in Saudi Arabia.

The costs

You can start your import and export business with little upfront costs, but in reality, it takes more than that. These are some of the things you’ll need:

  • Capital for traveling to companies, businesses, manufacturers, and clients
  • Costs of hiring professionals, for branding, administration, promotion and other important aspects of import and export business
  • Costs for making a website, business card and other promotional materials

Narrow your market focus

These are the things you need to work out in order to niche down and narrow down your market.

  • Your customers
  • Areas of the world you want to target
  • Goods you want to offer

And remember that this is when you should take the time and narrow down your market focus. You want to find a profitable niche.

Sunset and cranes
Narrow down your market.

When importing goods into Saudi Arabia

Saudi Arabia needs to have a transparent and predictable licensing system, as it’s under WTO obligations. But, you’ll still have to submit different documents, learn more on registration and tariffs, so consider hiring a professional.

Business structures you can choose

First, you should know that you don’t have to incorporate in the US if you want to start your business. But also, you should know that if you form an LLC, it can have certain benefits for importing and exporting business.

  • You’ll protect your personal assets by separating them from your business assets
  • Business expenses deduction
  • Credibility – Clients see incorporated business as more legitimate

Business models you can choose

Export and import business usually charge based on:

Commission – commission structure means that you’re paid, usually around 10% of the trade deal you close. On top of that, you can get additional expenses, for shipping or packaging.

Retainer model – your client will pay you monthly services, and you’ll provide your services when necessary. Be careful to consider all your costs when choosing the amount of retainer.

An alternative model – you can buy good and sell them, and from the profits, you get your revenue.

Which one is the best for your business?

A general rule would be that you should choose a commission model if you think that it’s going to be easy to sell the product. However, if you don’t think this is going to be the case, choose a retainer model, as you’ll get paid even in the downtime.

In order to ship the goods

There will be some details you’ll need to arrange, in order to export and import the goods to and from Saudi Arabia. One of the most important things you need to do is to get help from a freight forwarder such as Four Winds Saudi Arabia. This company will handle all the planning and organization of shipments from one point to another. And there’s a lot of things that go into this kind of organization, from shipping documents, customs clearance, making sure everything is done within a time frame and a lot of other details.

Ship carrying goods
Logistics are important.

Risks and how to avoid them

It goes without saying that your success depends on whether you’re able to ship goods efficiently. And you can make sure that this is going to be the case by partnering with a reliable freight forwarder. That’s why you need your cargo handled by experienced professionals, as it will make sure that everything functions at the highest level possible. And also, you should not forget about cargo insurance.

Potential problems

Just like in any business, things can go wrong, unfortunately. But you can do your best to prevent this, by doing thorough market research. You might want to higher experts who understand the needs and preferences of the market. Also, custom rules can be an issue sometimes. There are tons of different regulations you’ll come across when exporting and importing goods. Luckily, there are also experts who are familiar with trade compliance and customs law.

What about packing?

Freight forwarding companies can help with the supply chain process, including packing and crating. You should remember when packing goods is that the way of packing depends on the type of goods you’re shipping. For example, you’ll pack cycling equipment in a different way than you’ll pack some other type of goods. And also, there’s one more thing you should have in mind, and it’s custom packaging.

Custom packaging has many benefits

You want customers to recognize your brand, so when exporting goods, you shouldn’t use any packaging. You should use custom boxes, boxes of different sizes, and shapes. There are many benefits when choosing custom boxes, marketing benefits, protection of goods, and making your brand stand out on the market. If you already provide the quality and content, why not provide the whole package.

Final word

People who want to import and export goods are people who like to build relationships with other nations. And as amazing as that is, it takes a lot of organizational skills to do this successfully. Now that you know the basics, it’s going to be a bit easier to start with your business.

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