10 Intricate Details of Chemical Trading
1) Basic industrial and specialty chemicals can be shipped internationally in containers, barrels or sacks. Chemicals which are toxic, requires a license for trading.
2) Be familiar of terminologies used for chemical trading business. This includes jargons like incoterms, payment terms, port of loading and port of discharge. Incoterms include FOB (Freight on Board), CIF (Cost Insurance Freight), and CFR (Cost and Freight). Payment terms include DP (Direct Payment) and TT (Telegraphic Transfer).
3) Chemical trading has now been overtaken by Asia-Pacific region which was once dominated by North America and Europe.
4) Product quality is imperative for chemical trading business so as to have a good ROI (Return on Investment) and long-term partnerships.
5) Be equipped with effective risk management solutions because prices of chemical products can fluctuate anytime.
6) Be sure to find reliable suppliers for chemical trading so as to not put your business at risk. Look for traders or suppliers that are verteran in the industry of chemical trading such as Tradeasia International and learn about their business.
7) Consider sourcing from multiple producers of chemical products so as to be able to blend the assets and provide different forms of services such as documentation, logistics and support services for the customers.
8) Other than focusing on looking for cheap and good quality chemical products, ensure that the flexibility and speed of delivery are not compromised.
9) Ensure that one has a certain level of knowledge relating to the chemical products that are being traded so as to be able to provide technical support, such as licensing to the customers.
10) Consider different management structures with expertise in marketing, export document and negotiation and trading. This allows the business to cater large and small customers respectively as they each has very different sales model.
Want to learn more about chemical trading besides these 10 points? Don’t hesitate to download our free ebook.