Can you afford to lose on your next import investment?

Statistics show that 9 out of 10 businesses in the US fail. The up side to this equation is that the one business that is successful will be your ticket to retirement. In international trade it is import to diversify your portfolio in the same way you might with stocks. If you had all your stocks in AIG, you might have been in trouble. The same line of thinking should go for your business in international trade.

During the Sourcejuice Digging Deeper series we examined the successes and failures of an array of import ventures. Let's dig even deeper (to China possibly) and apply the concept of a diverse portfolio.

We will include in our import portfolio the following products:
• Stainless Steel & Ceramic Sinks - profitable
• Granite Countertops - profitable
• Marble Tile - break even
•  Modular Kitchen Cabinets - failure



Granite Countertops
From Sourcejuice article, Let?s Talk Granite - Pre-fabricated Granite Import Guide, we detail that the profit margin for pre-fabricated granite countertops is approximately $1,911 per kitchen sold. This translates to $35,731 for a container shipping with 30 complete kitchens worth of countertops.

Stainless Steel & Ceramic Sinks
The profit margin for sinks will vary depending on the how the products are marketed and who the customer is. The landed cost for stainless steel kitchen sinks is approximately $60 for a standard equal double-bowl, satin finish sink. On average these sinks can be sold to builders or wholesale plumbing supply houses for at least $50 in profit. Retailers like Home Depot often sell sinks that range around $350. With an import of 750 stainless steel sinks, the minimum profit is $37,500.

Marble Tile
From Sourcejuice article, Digging Deeper - Actual Landed Costs Examined Part 2 of 3, we examined an import of marble tile from China. The landed cost of 7,500 sq. ft of marble tile equaled $1.84 per sq. ft. Total cost from a local wholesale retailer with identical granite ran $1.73 per sq. ft. With this marginal difference in price, the loss only totaled $750. If you account for delivery cost from the local wholesaler, this import is "a wash" or break even.

Modular Kitchen Cabinetry
From the more grim closet of import venture stories we have the modular cabinet import venture. This venture proved to be an almost entire loss and took almost a year to ship. When received it was incomplete, requiring additional investment/time to fabricate additional cabinets and finish coating the doors.

Conclusion





No matter how you look at it, 73% of the entire venture was profitable or 2 out of 4 product success rate, diversification proved to be the right course of action. What you learned with the failures will ensure that your next venture will increase the odds.


dylan@sourcejuice.com // Dylan Blankenship