Trading… What is it? Why is it so complicated? How can it be simplified?

What is trading? Most often when people think of trading, they think of stocks and bonds. At least, that’s what I used to think until just about a year ago when I got involved with my first international trading company, RigidFlex Plastics International. The definition of trading is broad and simple. I like the definition that wikipedia gives which pretty much says, trading is the general term used to describe the interaction between two parties that exchange goods, (most often something for money). Anyone who is directly involved in wholesale, retail, brokering and anything that goes on in Amazon, Ebay or similar sites–is a trader.

Marco Polo is probably one of the most popular traders in history. Some of the biggest and most successful companies in the world right now are nothing more than trading houses, MitsubishiHyundai andAmerican Trading International to name a few. A kinda fun example can be found in traders that are out of this world as well. Let’s look at Star Wars for bit. Hans Solo was a trader and had totally equip the Millenial falcon with hidden cargo bays to smuggle goods and avoid the federation tarriffs. Jabba the Hut was a trader. Every now and again I think about the scenes in Star Wars where everyone is hanging out at Jabba the Hut’s lair and these different traders from all over the galaxy are eating and talking. The funny thing is, these guys (and women) are probably talking about the different prices on the plates and napkins for all the intergalactic canteens that Jabba franchises, not to mention the going rate and existing supply scrap metal and old robot parts and which planets have an excess or shortage… Okay, you get the picture.

To trade you just need a buyer and a seller and a product. Unfortunately all of that can get pretty complicated when you look at all of the different players involved in getting a product from the manufacturer in one country to a converter or end-user here in the states. A few of the different factors you need to take into consideration include the following:

      L/C (letters of credit)

ocean freight

land freight

bunker fees

gas surchage

shipping bond

entry fee

merchandise processing fee

harbor maintenance

customs and tarrifs

and a few more

Fortunately, you can simplify things a lot by having a reliable Import Broker and Export Broker. At RFPI we use Copper Smith for all of our import, and Adora Intnernational for all of our export. Coppersmith is a huge company with affiliates just about everwhere that can handle even some of the most complicated shipments. Adora is a trustworthy, small town establishment out of Houston Texas that has been in the business for three decades and has followed through on everything we’ve ever needed from them.

Keeping track and updates on the different shipping prices and tarriffs can get distracting from the real meat or your trading. I haven’t yet found a software or website that manages all of the different aspects of it, but I can imagine it would be pretty helpful. I’m certainly open for suggestions.

The risks and stress can be pretty high in this business, but then again, so can the rewards.

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