Product quality is a core part of chemical products establishing long-term business partnerships

1. Get the right team together. You need competent sales people, technical support for chemical products, and people who know how to operate import and export documents.

Have you done your homework? You can’t just jump in and start trading, because most buyers have made purchase contracts. Other buyers may have a fixed supply chain agreement with a large multinational company, which may make it more difficult for you to enter the business, so choose your market wisely.

With this in mind, many start-up traders focus on basic chemicals because they have a wider range of uses and give you more potential customers.

You can start with special chemicals, but it requires a better understanding of the market and products, and it may also require special permits and documents, which can be difficult and time-consuming if you’re in a new industry.

1. Know your chemical trading terms. As low Jia wee of Asia Trade International Limited puts it, “be familiar with terms such as INCOTERMS, terms of payment, ports of loading and unloading. Incoterms include FOB, CIF and CFR. Payment methods include DP (direct payment) and TT (telegraphic transfer). “

Figure out your numbers. Profit margins can be small (usually as low as 5%). This makes it important to know your logistics route. Effective packaging and trade routes are key to success. That’s why, as a chemical trader, it’s important to constantly consider TLC (total landing cost).

1. Find the best chemical supplier. This will involve one (or more) of the following methods;

Online. Join one of the many trade discussion groups, such as those on LinkedIn, to build connections and gain insight into the industry.

Traditional network. Participated in one of many conferences organized by ICIS (independent chemical information service), Royal Society of Chemistry (RSC) and American Chemical Society (ACS). It lists thousands of business partners and potential customers.

The easy way is to use an online chemical market or matchmaking service, so you can simply browse through the available products, just like using e-bay. Or, some websites allow you to post a request to buy a certain number of products and wait for the seller to find you. In the chemical industry, businesses like this are relatively new, but can save you a lot of time and energy, allowing you to search for specific products from the office or home at any time of the day. It’s true that the services offered are slightly different, but some popular sites include panjiva.com , kemcore.com , spotchemi。 The European Union (the sponsor of this blog), and of course Alibaba.

1. Think of the East. In the past decade or two, the procurement and trading of chemical suppliers has changed dramatically, as the traditionally strong European and North American markets have experienced stagnation in recent years.

Today’s industrial chemistry industry is increasingly concentrated in the Asia Pacific region. If you want to succeed, you may need to build connections there. “Consider importing chemicals from China,” said Calisto radithipa, who has more than a decade of experience trading chemicals and is now co-founder of kemcore, a chemical trading company. China is now one of the three major producers of basic chemicals, and the production of some chemicals now belongs only to China. “

1. Consider purchasing from multiple manufacturers. By doing this, you may be able to mix and mix certain chemicals to create a new product. As the product base expands, it may be extended to special chemicals, but please note that customers in this area may need more technical support. Therefore, if this approach is adopted, it will be important to improve product knowledge and understanding of the necessary documentation.
2. Be flexible in your business plan. Understanding risk management techniques is also useful as the price of chemical products can be volatile. Are you ready to deal with the price drop of a commodity? If it does, what will you do?

Of course, this list is inexhaustible, and you have to add a lot of basic business strategies to it. For example, it’s important to make sure your products are in place on time, especially in many contracts, and if you don’t provide them, you’ll be punished. Like other industries, product quality is a core part of building long-term business partnerships.

But when all is said and done, there are many reasons to start trading chemicals commercially. In fact, this may be an unprecedented opportunity, with some regions (Asia Pacific, Middle East and South America) on the brink of incredible growth.