Go Big Or Keep It Low-Key—How To Start An Import/Export Business In Ecuador
“It was an incredible journey that took my breath away,” reports Jan McKinley on her first foray into the world of import/export entrepreneurs in Ecuador.
“I hoofed it alone for four days in Quito, taking photos, shopping, and experiencing the city, as my passions are travel, writing, photography…and, of course, shopping. I then joined an import-export tour, where operator took us on an incredible five-day expedition to the indigenous artisan markets around the Cotacachi/Otavalo area, culminating in a visit to the Saturday market in Otavalo.
“We visited the artisans at their homes, where most of them do their crafts. We met people who were looming, spinning wool yarn, making Panama hats, crafting tagua jewelry, marzipan, forming bamboo flutes and musical instruments, woodworking…the list goes on and on.
“These people are amazing. Visiting their families at their ‘factories’ (their homes) and watching them work side-by-side, generation-to-generation, in their cinderblock houses—sometimes of only one or two rooms—was a journey I’ll never forget.
“The smiles on their faces, the countryside, seeing their crafts…as well as experiencing the Otavalo market, getting it all on film, finally seeing the tops of the volcanoes on our last day was amazing. I can’t wait to return!
“Now back home in California, I am pondering the logistics of an Ecuador/Andean import business of some sort. What do I do with all these beautiful and unique crafts, and how do I share them with others?
“I brought back a sampling of all their handmade crafts that I could fit into two 50-pound suitcases. Their wares are beautiful and exquisite just like the people. It was a journey of a lifetime, and I truly hope to return to work with these people. This was not only a unique experience, but a heartwarming one, as well.”
The fact that Jan undertook this adventure in Ecuador was no accident; there are few better places to export from. First, Ecuador uses the U.S. dollar, so there’s no currency risk. They’ve also got favorable export laws.
And, in Ecuador, it’s easy to find your way to the warm and friendly craftsmen who are actually creating the product…eliminating a bunch of middlemen. If you work your way from San Antonio in the north to Loja in the south, you’ll find dozens of villages, each with its own specialty—wood carvings, clothing, candy, sweaters, leather jackets, jewelry, guitars, even hand-crafted cellos…
Finally, prices are super on the Ecuadorian end, yet the quality products can command great prices on the retail end.
The question is, how can you follow through with the great import/export opportunities that present themselves in this country? Finding quality merchandise, getting good prices, and meeting the artists who create the products is a great start. The next step is creating a business from all this.
One thing I’ve found paying attention to the import/export opportunities available in Ecuador over the years is that one secret to making a success of this and building a profitable business is where you sell your imports.
I remember, years ago, discovering hundreds of beautiful Talavera vases for sale in a market in Puebla, Mexico. They were US$8 each. A few months later, at a Third Avenue street fair in Manhattan, I found those same vases for US$25…a good markup, but not earth-shaking.
Then, a few months later in Mystic, Connecticut, I saw the same vases again, this time for sale for US$65. I struck up a conversation, and the owner described to me how he’d personally brought them from the market in Puebla and how much fun he had traveling the world to stock his shop.
I’ve had the same experience with the small, hand-woven rugs you can buy at the market in Otavalo, Ecuador, probably the largest indigenous market in South America. I’ve bought many of these rugs in Otavalo, paying US$8 apiece. The same rugs sell for US$20 in Queens, New York, and for more than US$100 at the Andean import store in Sacramento, California. In Scottsdale, Arizona, the very similar “Native American hand-woven rugs” are US$295 each!
As you can see, you can make a slim margin or a handsome one, depending on the retail location you connect with. The best location may not be near home, so you may need to find a trusted associate, friend, or family member to manage the retail end for you.
Alternatively, you could sell your treasures as a wholesaler, to a shop or chain. Going this route, you’d be sharing a large piece of the margin to cover their costs. You could still do well with this model, but if you can control the retail end, then more of the profit—and more of the intangible rewards of the experience—are yours.
Jan took the first step in the way most Ecuador-exporters do, by bringing things home in a suitcase, while figuring out the business bigger picture. This is a low-risk, low-cost way to get started.
I met a guy named Peter in Nicaragua who took a different approach. He jumped in with both feet. Peter and I met at an investment seminar in Managua, after which he scoured the country looking for local hand-crafted items. After a month of shopping, he shipped an entire container of clothing and handicrafts to Long Beach, where he sold them in his own, new, retail shop.
He didn’t want to carry the items little-by-little, so he bought his entire inventory at once. As he shipped a container, he had to pay the duty when it arrived. However, he had done his research and knew that the duty isn’t much on Native American handicrafts. For him, this expense was worth the convenience of getting everything at once. Peter’s approach can work well if you’ve already identified your target retail market.
That’s the beauty of starting up your own import/export business. You can go big-time, or you can keep it small. You can make a good living or simply fund your rich and rewarding travels abroad.
Either way, there are few better ways to generate an income overseas. And few better places to try out the idea than Ecuador.
Continue reading: How Ecuador Compares With Other Top Retire Overseas Choices