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How to Start Imports Business in Kenya

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How to Start Imports Business in Kenya

Imports business is among the leading industries in Kenya. Everyday hundreds of containers arrive at the ports from oversea nations. All manners of goods find their way into our market from different destinations. One of the major countries that exports to Kenya is China, the world’s largest economy. Almost all world countries are dependent on China one way or another. 

In Kenya, it is possible to start a small scale imports business and grow it into something big. Already there are people doing it on a small scale while others are doing it on a large scale. It doesn’t require a big capital to start the imports business. In fact, one can start without any capital. With a smartphone, you are good to go!

Where to Start the Imports Business

Sourcing Suppliers

As stated earlier, there are people already doing small scale imports business. Most of them didn’t start with capital. They operate WhatsApp groups and import everything for the group members. 

The first step of running this business is getting the right connections. Travelling to China is expensive unless one is running a large scale business. You need to get someone in China who will be sourcing the goods for you. This can be a relative or friend residing in China or someone who frequents China on a regular basis. Alternatively, you can find a Chinese agency that specializes in sourcing products. 

There are thousands of Chinese sourcing agencies which can act as the main contact in China. The hurdle is locating the right ones to work with. Once you’ve found a contact person, the next step will be identifying a shipping company.  There are hundreds of shipping companies. Each company has its advantages and disadvantages. Take your time when choosing a shipping company. You can go through reviews of other importers on shipping companies.

Forming a WhatsApp/ Facebook Group

When getting into the imports business without capital, the first clients will be friends and family. This is so because they know and trust you. Once you have the contacts of someone to source the goods for you, form a social media group. The group can either be on Whatsapp, Telegram, or Facebook. Add your friends and family to the group. 

The sourcing agency should have provided you with products they are able to source. The one sourcing will give you product images, wholesale prices, weight of the goods, and varieties if any. Use this information to find out how much it will cost for you to ship the goods to Kenya. Once you have the right information about shipping then you can price your products. 

It is advisable not to include shipping charges in the  prices when advertising in the group. Give an estimate of what you assume the shipping cost might be. For instance if the shipping company is charging $10 per KG, Tell the clients of this charge. That way your clients will know what to expect depending on the weight of the product they wish to buy.

 For every product you advertise, make sure to indicate the Minimum Order Quantity (MOQ). Your supplier will not sell to you unless you meet the MOQ required and this has to be clear to your buyers. If they fail to meet the MOQ then it means the order won’t go through. Remember, the more members you have in a group, the faster you can fill MOQ. So encourage your friends and family to invite their friends to join the group. Set dates for closing ordering of products. Set 2 or 3 weeks period for running orders.

It is advisable to run different products in the group for people to place orders. This will help save on the cost of shipping. The bulky the goods, the more the profit too. So grow your group as big as possible. You can receive payments through your personal Mpesa number. To add legitimacy to your young business, register as a business and acquire a Mpesa Till number. People will trust you more if you have a Till number rather than a phone number for receiving payments.

Once you have closed the orders and everyone has paid for their goods, take your cut. Ask your members how they want their goods shipped:

1: By air- a bit expensive, but goods arrive between 3-14 days depending with the shipping company

2: By sea- Cheap but takes 21 days- 2 months depending with the shipping company

Make this clear to your clients to avoid unnecessary trouble.

The remaining amount should be sent to the sourcing agency together with order details. They will inform you how long it will take to source and package the parcel.

The Process

When the sourcing company receives orders and payments they proceed to source for the products. The products are packaged  according to instructions given and sent to the shipping company. Note that some sourcing agencies will charge you courier fees to send the goods for shipping. You have to factor this amount in the pricing when advertising the products. 

Once the shipping company receives the goods they will contact you with a tracking number, weight of goods, means of transport, and cost. You have to know all these information prior to your goods getting shipped. Let all those who ordered products know how much the goods weigh. This way, all are aware exactly how much each is going to pay once their goods land.

When the goods land in the country, the shipping company will call and let you know your goods are ready for collection. Collect the amount for shipping from the clients then collect the goods. It is up to you on how you will have the goods delivered to your clients. You can offere free delivery services, charge a fee, or set up a collection point.

How Much Can You Earn from Imports Business?

It depends with your type of clients, types of goods sold, size of your client base, and trust. If your clients do not trust you then they will not buy from you. On a rough estimate, you can make between Kshs 5,000- Kshs 10,000 a round for a start. As your client base grows so does your profits.

Challenges to Expect

This business has been around for awhile now. You should expect a few challenges based on the experience of others who have been in import groups before. Some of the challenges include:

  • Rogue members discrediting you as a fraud
  • Other imports business owners joining your group to porch members by posting their group links
  • Other import business owners discrediting you as a fraud to scare away your customers
  • Goods taking too long to arrive which will see your group members grow anxious
  • Poor product quality (be very keen on this area if you wish to keep your client’s trust)
  • Counterfeit goods getting seized
  • Group members wanting proof that you are a genuine business person
  • Failure of paying shipping fees by some customers
  • Some customers want a refund for different reasons

Even with all these challenges, it is still possible to create a successful business. There is a way of handling each of these challenges. Small scale imports business survives on trust. If you are able to win the trust of those you deal with, then you have a business. Always stay honest and keep your group members up to date with the happenings. 

Important To Note:

The government requires you to pay taxes for all the goods brought into the country. For this reason, always include 16% VAT tax when advertising products. This will save you from having to pay tax from your own pocket.

The Anti Counterfeit Agency and KRA seize counterfeit goods. It is important for you to know the types and categories of goods not allowed into the country. 

Resources

If you need guidance on how to start this business, click here. Mentorship costs Kshs 500

If you need contacts of Chinese sourcing agencies click here. Costs Kshs 150

If you need a list of products banned by ACA & KRA click here. Costs Kshs 50

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