Microbusinesses for Colombia

[whitey]

I've started this thread in the hopes that we can share some ideas and experiences for making a few pesos in Colombia ... either to help family out, or just to pay for a couple bottles of Old Parr while on holiday.

In the past, Alabamaboy and Benjio have mentioned various import/export type microbusinesses that they were involved in - I found the subject pretty interesting and wanted to get something going myself.

When we went to Colombia for Christmas this year, with my encouragement my wife brought about 55 t-shirts (all Aeropostale) and 4 dresses in our suitcases.  We got a good deal on the t-shirts, paying on average the equivalent of $CP9.000.  She and her family have been selling them for $30-35.000 (depending on the person), and $40.000 if they pay in installments.

So, let's say a profit of $26.000 per t-shirt for a total of $1,430.000 once she's sold them all.  At this point, she still has 15 left to sell, but she's done quite well.

Every month, she gives her parents $400.000 for household expenses.  This is something all three daughters do, although only one is now still living at home. Seeing the success of the t-shirt sales, I suggested that instead of giving her parents $400.000 cash, we could try one month giving them $200.000 in cash and $200.000 in t-shirts that could then be turned into more cash.

Now, since we're likely not going to Collombia until next Christmas, we'll have to ship these t-shirts instead, thus increasing the cost as we'll have to pay both shipping and import taxes.  The cost for this varies based on weight, but I figure it will about double the cost of the t-shirts to around $15.000 per, leaving a profit of around $17-20.000 per.  So, rather than getting $400.000 per month, her parents would get around $600.000 once all the t-shirts were sold.

I've also bought around 40 t-shirts myself that I'll be shipping to a Colombian friend of mine in Barranquilla. My average cost including shipping and taxes will be around $15.000 per t-shirt, and I'll sell them to him for $28.000.  He in turn will sell them for $35-40.000, so we'll each make around the same amount of money.  In total I expect to earn around $500.000 profit from the first shipment.

Obviously, this isn't going to make me rich.  Carlos Slim does not feel me breathing down his neck.  It's just going to be a fun way to experiment and turn some casual weekend shopping into pesos that I can spend while on vacation.  There's also the side benefit of helping my buddy out a bit too.  It would be great to get something going on a larger scale, but since my brilliant business idea is dependent on the occasional sales at Aeropostale, and I don't yet have any other viable ideas for other items to sell, I don't really have any plan.

If anyone has any experiences (good, bad, and ugly) or some ideas on what would sell well in Colombia and conversely what Colombian items would sell well here in North America (Benjio was selling mochilas), I'd sure love to hear them.

[IMessedUp1]

Hi Whitey,
Good thread, I hope others have some input on this subject. Another business model is to start an internet based business. There are lots of ways a partnership could be set up which would benefit you and your wife's family. I don't have any specific ideas, but it would involve you setting it up and the in-laws supplying the labor. With the exchange rate as it is, $10 / day (US) would be almost 6.5 million COP (annually). I'm sure that would make an impact on their living expenses.
Cheers,
Arnold

[htown]

I haven't done any research but I'd think small electronic items might do well.  Video games, sd memory cards, scientific calculators, cell phones, cell phones, CELL PHONES, tablets, hdmi cables.  Computer parts like cpu's, memory, motherboards.


Other name brand clothes besides just aeropostale.  Brands like armani exchange, guess, polo, levi's.


I always see people who are obviously from latin countries buying up a bunch of stuff at the outlet malls here in houston.

[Alabamaboy!]

I've started this thread in the hopes that we can share some ideas and experiences for making a few pesos in Colombia ... either to help family out, or just to pay for a couple bottles of Old Parr while on holiday.

In the past, Alabamaboy and Benjio have mentioned various import/export type microbusinesses that they were involved in - I found the subject pretty interesting and wanted to get something going myself.

When we went to Colombia for Christmas this year, with my encouragement my wife brought about 55 t-shirts (all Aeropostale) and 4 dresses in our suitcases.  We got a good deal on the t-shirts, paying on average the equivalent of $CP9.000.  She and her family have been selling them for $30-35.000 (depending on the person), and $40.000 if they pay in installments.

So, let's say a profit of $26.000 per t-shirt for a total of $1,430.000 once she's sold them all.  At this point, she still has 15 left to sell, but she's done quite well.

Every month, she gives her parents $400.000 for household expenses.  This is something all three daughters do, although only one is now still living at home. Seeing the success of the t-shirt sales, I suggested that instead of giving her parents $400.000 cash, we could try one month giving them $200.000 in cash and $200.000 in t-shirts that could then be turned into more cash.

Now, since we're likely not going to Collombia until next Christmas, we'll have to ship these t-shirts instead, thus increasing the cost as we'll have to pay both shipping and import taxes.  The cost for this varies based on weight, but I figure it will about double the cost of the t-shirts to around $15.000 per, leaving a profit of around $17-20.000 per.  So, rather than getting $400.000 per month, her parents would get around $600.000 once all the t-shirts were sold.

I've also bought around 40 t-shirts myself that I'll be shipping to a Colombian friend of mine in Barranquilla. My average cost including shipping and taxes will be around $15.000 per t-shirt, and I'll sell them to him for $28.000.  He in turn will sell them for $35-40.000, so we'll each make around the same amount of money.  In total I expect to earn around $500.000 profit from the first shipment.

Obviously, this isn't going to make me rich.  Carlos Slim does not feel me breathing down his neck.  It's just going to be a fun way to experiment and turn some casual weekend shopping into pesos that I can spend while on vacation.  There's also the side benefit of helping my buddy out a bit too.  It would be great to get something going on a larger scale, but since my brilliant business idea is dependent on the occasional sales at Aeropostale, and I don't yet have any other viable ideas for other items to sell, I don't really have any plan.

If anyone has any experiences (good, bad, and ugly) or some ideas on what would sell well in Colombia and conversely what Colombian items would sell well here in North America (Benjio was selling mochilas), I'd sure love to hear them.

We are still doing this, but not as a structured business venture anymore. I have enough headaches here in the US with my own business. So we just send them the clothes and they wear some and sell some. It definitely goes a lot further than sending cash. And it is fun for us because we like to go to the big swap meet in San Diego which always has great deals.

Another tip I have is that we use www.busfreighter.com to get our boxes from where we live (a small city without shipping to Colombia) to a trusted, low cost shipper on the East Coast. So far we have sent like 8 large boxes without any problems whatsoever.

It is great to see the pics with all the kids especially wearing the new clothes and shoes.

[mambocowboy]

while we're on this topic, how the heck do you send boxes to BAQ and keep the cost down?

[whitey]

I haven't done any research but I'd think small electronic items might do well.  Video games, sd memory cards, scientific calculators, cell phones, cell phones, CELL PHONES, tablets, hdmi cables.  Computer parts like cpu's, memory, motherboards.

I've considered cell phones ... probably a good appetite for them in Colombia.  Not being very technical, I'd need to know what types of phones work down there, make sure they are unlocked (I think most are locked up here in Canada), figure out a source for buying used, determine what the profit margins are, etc.

Other name brand clothes besides just aeropostale.  Brands like armani exchange, guess, polo, levi's.

I've also bought Old Navy t-shirts which can also be had on sale sometimes for very cheap.  The challenge with clothing is to get something with close to universal appeal, close to universally affordable, prominent logo (Colombians like to see the brand displayed LARGE), and where sizing is simple like S, M, and L ... and most of all lots of margin as I need to pay shipping, taxes, the seller in Colombia, and myself.


I haven't been able to find any other brand clothes or other types of clothing at a cheap enough price yet - doesn't mean they are not out there though, but my options are fairly limited in my home town.

T-shirts are perfect because everyone needs them, wants them, and can afford at least one.

[whitey]

AB, how much are you paying for shipping, taxes, and insurance?


I've been quoted $3.59 per pound shipping (minimum 10lbs), $5.00 insurance for every $100 value, and 23% import taxes.  The taxes are killer - any way to avoid it?

[Alabamaboy!]

I am looking at one of the receipts from the shipping place. It cost a total of $140.43 for 81lbs box to be shipped from their place in New Jersey to my in-laws place in BAQ. So about $1.73/lb if my math is correct. They put a declared value of $100. It was a box of toys, clothes, shoes, etc. No tags. Some was new, mostly used jeans, brand name shirts, dresses, shorts.

Tax was $26. And a couple $5 charges for one thing or another. All in all not bad price.

And I used www.busfreighters.com to get it from AZ to New Jersey. That was $123. So $1.51. They charge the same price for up to 100 lbs. So if I could have jammed more stuff in the box would have been $1.23/lb with them.

The name of the place in New Jersey is: El Rinconcito Music Store. Got the info from www.poorbuthappy.com years ago. The owner of that site used them many times without any problems. And so far so good with me too.

[whitey]

Thanks AB ... looks like my cost per pound and tax rate will be close to yours.  Guess I'll see - I'm sending in Thursday evening.

[robert angel]

Aeropostale has a lot of sales and is very popular in the Philippines too. They seem to like the sewn on 'Aeropostale, New York, 1987' logo design. Hollister is also popular, especially if it has the California logos, along with their Seggull logo.
 
I don't know rhyme or reason of Old Navy's sales, but tonight for $20, I got two dress shirts that were tailored from quality cotton in 'modern style'--with long sleeves you can button up halfway. Normally $60. I have gotten better bargains and Old Navy and The Gap (and Banana Republic) are owned by the same company and if you look close, you can find some products of very similar quality among the three chains.
 
4th of July in the USA is usually real big for all of these, but at The Gap I have seen $30-$40 polos for less than $5--very nice quality, but no status symbol logo on that Gap  stuff.
 
Victoria's Secret basically has their biggest sales in January and June and unless you hit it right when they go to 75% off (if they have anything good left) it's hard to get enough of a discount to really make it worthwhile to export.
 
Aside from products mentioned above, I set up a corporation and had a license to buy wholesale goods for cheap, but when the Chinese really ramped up production of everything and flooded  markets with cheap product, it became harder to find stuff that moved. It used to be expected that if you bought it for $5, you'd make at least 3X, or $15  from $5 or otherwise you were wasting your time.
 
The internet and E Bay ("Fleabay"?)  changed the market place a lot. You can find all kinds of 'knock offs' for cheap there, like Lacoste shirts, Ralph Lauren Polo, etrc--but for any given item, if you look around, you'll probably find three different levels of quality, priced accordingly.
 
You used to have to go to Asian or certain Muslim cities to get that stuff, then bring it back here. Muslim outfits, some with political philsophies very different than the USA's, make billions of dollars from counterfeit goods that move worldwide--Oakley sunglasses, clothes, perfumes, watches etc. Fake auto parts are a big market too.
You can even find fairly convincing fake iPhone(y)s. There's no limit. I occasionally collect coins and the Chinese were flooding the market with some rather real looking versions of late 1800 and early 1900's US Silver Dollars. When they found out we could tell they were fake because unlike real 'silver', you could pick up their fakes with a magnet, they quickly switched to nonmagnetic alloys. Their fake coins usually have a very convincing patina--the (false) appearance that they are indeed old when they're in fact not. 15 years ago I bought what seemed like genuine, very old Chinese coins on Yonge Street in Toronto, that were nice fakes (along with fake, dyed semi precious gems), but in North America, the fake goods capital has to be Canal Street in NYC's China Town, Little Italy area.. And I thought that heavy, great looking $4650 Bell & Ross wristwatch I bargained down to $30 last summer was the 'real deal! (yea right!)
 
I bought a really nice automatic Seiko divers watch in Manila (via Indonesia), that had a totally real Seiko case and crystal, a top quality but fake band and a top quaility but fake movement. I had it checked out and later politely but firmly confronted the Muslim merchant. He found me a 100% genuine, (Seiko checked out) automatic diver's watch that I still occasioanally wear today--a dandy timepiece. Oh--he threw in a little solar powered calculator for free that still works today for my 'trouble'.
 
I have a magnificient top tier fake Rolex Daytona I paid $40 USA dollars for in Davao (via Malaysia). In the USA, it was such a convincing fake that a pawn shop offered me a loan of $400 if I'd have pawned it. When I told them not only that it was an exquisite fake, but how to tell it was (open it up, check the movement, the numbers and use a 30X loupe), they were so thankful that they sold me a Yugoslavian AK47 assault rife, with four 30 round magazines for $325. Just the thing to have by the front door in the umbrella stand when the evangelists come door to door early Saturday mornings! Answer the door in your boxers, wearing a black tee shirt that in ornage, yellow and red says: 'Kill em ALL--Let GOD sort em out!" --works like a charm....
 
"Caveat Emptor" indeed--it's hard to keep up with the counterfiet industry. There's always a faster pussycat and a better mousetrap coming along.
 

[V_Man]

... they were so thankful that they sold me a Yugoslavian AK47 assault rife, with four 30 round magazines for $325. ...

Is this true?

[robert angel]

Is this true?

Absolutely. Sometimes I wish I got the Romanian AK--which has a chrome lined barrel, but the Yugo one has better overall finish and I don't shoot it too much. They even gave me a deal on that crappy old communist era, left over ammo. No problem--an AK47 is built to such loose tolerances it can shoot crappy, corrosive ammo, even if you dropped the gun in mud or sand--that's why it's a 3rd world favorite. Drop a Bushmaster or Daniel Defense AR in the mud and you may well have issues. Not as accurate past 75--100 yards, the AK sprays enough cheap ammo reliably, that you're bound to hit something and in urban warfare, most 'engagements' are fairly close in. Best to buy newer, safer ammo though--even if they do say that an AK and its ammo is:  "Like a a date with a fat girl--doesn't (or didn't before) cost much to get, eats everything you give her and is always good for a bang'.
 
But no, I do NOT keep any rifles in the the umbrella rack or even by the front door. My wife (an execellent shot who has perfect body ergomics on the range and refuses to use a laser) would never allow a long gun in the foyer--it would not fit the decor.
 
 I do keep a Glock 17 handgun on the top shelf of the nearby coat closet under the scarves and hats, with the standard 17 round magazine and a Glock issue 33 round magazine along side. Glocks are just about as ugly as AKs but like them, they're very reliable!
 
Oh--I don't really have that ignorant T shirt either--but I see them at gun shows and some of our older guy elite, first strike force Army Rangers in town, bear that tatoo. Now the Army and other branches of USA military discourage tattoos.

[htown]

U.S. Polo Assn. is a brand similar to aeropostale.  Their clothes are very cheap and very popular with the younger crowd.

[Alabamaboy!]

Thanks AB ... looks like my cost per pound and tax rate will be close to yours.  Guess I'll see - I'm sending in Thursday evening.

The prices I gave you already included all the taxes, insurance, extra fees.

[EnglishYEspanol]

This thread is exactly why I joined this forum. I am really interested in importing an over the counter vitamin, for lack of a better term" and wanted to know of any hurdles.

Does anyone have any experience with importing things besides clothes to Colombia? Thanks.

[Gato4Astrid]

The internet and E Bay ("Fleabay"?)  changed the market place a lot. You can find all kinds of 'knock offs' for cheap there, like Lacoste shirts, Ralph Lauren Polo, etrc--but for any given item, if you look around, you'll probably find three different levels of quality, priced accordingly.
 

Selling fake, knock-off, counterfeit in eBay is illegal, and you will get banned if you got caught.  Not worth trying to do it,.

[Brazilophile]

Most of the ideas presented in this post involve purchasing goods produced in a high wage country and selling them to consumers in a low wage country.  It seems to me that the more profitable strategy is to produce something in the low wage country and then sell it in the high wage country.  No?
 
I know of only a few legal things that are produced in Colombia and sold in the US or Europe.  Emeralds.  Flowers.  Coffee.  Crude oil.  All of these are low value-added industries. 
 
Is there anything that is high value-added that can be produced in Colombia and sold in the US? Software?

[benjio]

Most of the ideas presented in this post involve purchasing goods produced in a high wage country and selling them to consumers in a low wage country.  It seems to me that the more profitable strategy is to produce something in the low wage country and then sell it in the high wage country.  No?
 
I know of only a few legal things that are produced in Colombia and sold in the US or Europe.  Emeralds.  Flowers.  Coffee.  Crude oil.  All of these are low value-added industries. 
 
Is there anything that is high value-added that can be produced in Colombia and sold in the US? Software?

There are dozens more things in addition to what you've listed. The thread is called "Microbusinesses," yet each commodity you mentioned makes up multi-billion dollar industries globally. In the end it all depends on how much capital you have to invest and what your expectations are in terms of profit margins.

[Bob_S]

Most of the ideas presented in this post involve purchasing goods produced in a high wage country and selling them to consumers in a low wage country.  It seems to me that the more profitable strategy is to produce something in the low wage country and then sell it in the high wage country.  No?

Not necessarily.  The nouveau riche of developing countries and elite oligarchy of corrupt authoritarian regimes love to flash their wealth by buying up quality (read: name brand) goods made in 1st World countries or at least sold in their boutiques.  Japan is a major shopping tourism destination for mainland Chinese looking for authentic made-in-Japan goods.  Consider: when the upper strata people travel abroad, what items do they come back with?  What are the women wearing?  What are the men sporting?  What's weighing down their suitcases?

[Brazilophile]

Not necessarily.  The nouveau riche of developing countries and elite oligarchy of corrupt authoritarian regimes love to flash their wealth by buying up quality (read: name brand) goods made in 1st World countries or at least sold in their boutiques.

Exactly true!  Now, just how big is that market in Colombia?  And more importantly, to how much of that market does a middle class American guy, trying to start a new business, have access?  Compare that to how big that market is in the US, or Europe and how much access a middle class American guy has to it in those places.
 
 
@Benjio,
 
I guess I should have followed up more on the broader point I was trying to make:  Comparative Advantage a la Adam Smith and David Ricardo.  What advantages does an American guy have over a Colombian guy in running a micro-business (such as selling clothing) in Colombia with low and middle income Colombians as customers?  I think the American guy has the advantage when selling to other Americans or Europeans. 

[benjio]

@Benjio,
 
I guess I should have followed up more on the broader point I was trying to make:  Comparative Advantage a la Adam Smith and David Ricardo.  What advantages does an American guy have over a Colombian guy in running a micro-business (such as selling clothing) in Colombia with low and middle income Colombians as customers?  I think the American guy has the advantage when selling to other Americans or Europeans.

I knew where you were coming from, and I'm also guilty of not elaborating on my point in my response. The advantage is there...it just depends on the product you're dealing with. As I said before however: As a businessman purchasing products in the United States to sell in Colombia, what do you consider a reasonable profit margin? The primary advantage lies in the fact that ideally, you could carry what you're selling on your person instead of sending merchandise through conventional parcel services where you'd have to pay taxes, duties, etc. Again, as I stated before, we're talking about a microbusiness here. Not an enterprise where logistics would be an issue. Just a way to make some quick cash. Even if it's only to cover the expenses of your trip. Two weeks ago there was an auction on eBay from a reputable seller trying to move a lot of 10 new, unlocked iPhone 4S's for around $4000. In Colombia, new unlocked iPhone's cost about $2 Million COP (Almost $1100 USD at the current exchange rate, more or less). So even if you sold them for $400,000 COP less than MSRP in Colombia, that's a $450 USD profit 10X over at the current exchange rate. And believe me...iPhone's are not difficult to move in Colombia if you know the right people.
 
I have tons of ideas like this. Some I'm currently executing...others are still in the works. I gave everyone here the run down on the Mochila bags a while back. That one was a freebie. I'm not going to continue to blab off every single business idea I have on a public forum increasing my chances of having competition in the future. I encourage anyone who is truly interested to hop on a plane, get down there and do some research. I can assure you the advantage exist if you know what you're doing.

[htown]

Sure you can make lots of money moving goods out of colombia and selling them in western countries.  But for the most part you're going to be talking about RAW GOODS and NATURAL RESOURCES.  If you want to export coffee, flowers, fruits, vegetables, timber, minerals, precious metals you could probably make a killing but you're talking about ALOT of work and money to get something like that going.  Not exactly what you'd call a "microbusiness".


Now importing name-brand clothes, electronics, cellphones, or even used car parts into colombia is something your average joe could start up with 10k or 15k usd.  Low barrier to entry.  I'm pretty much repeating what benjio said.




Or you could start a pimping, ahem I mean dating service...lmao!!

[robbierobnj]

If single guys were really smart they would bring a ton of clothes for females with them put it up on facebook or colombian cupid and watch how fast your the most popular guy with university girls ! ! !  Have some fun if that's your thing and make enough to pay for the trip.   
 
 

[bcc_1_2]

for pretty much all of latin america my suggestion would be to buy pallets of liquidated designer hand bags. Give any latina a Coach pursue and it's like that family guy diamonds commercial skit. guy buys ring. gives girl ring. girl gets down on her knees.... sounds stupid when i write it... but youtube it.
And again... pallets of name brand hand bags from past seasons. Name brand heels too. hand bags & heels. Then take them to the retail stores and re sell in bulk.

[benjio]

If single guys were really smart they would bring a ton of clothes for females with them put it up on facebook or colombian cupid and watch how fast your the most popular guy with university girls ! ! !  Have some fun if that's your thing and make enough to pay for the trip.

for pretty much all of latin america my suggestion would be to buy pallets of liquidated designer hand bags. Give any latina a Coach pursue and it's like that family guy diamonds commercial skit. guy buys ring. gives girl ring. girl gets down on her knees.... sounds stupid when i write it... but youtube it.
And again... pallets of name brand hand bags from past seasons. Name brand heels too. hand bags & heels. Then take them to the retail stores and re sell in bulk.

Are these responses serious? LOL!!!
 
You guys haven't worked much in the shipping, customs clearance, supply chain or logistics industries have you? So you buy a pallet or two of liquidated designer hand bags in the states. Easy enough. How do you get them down to whatever Latin American Country you plan on selling them in? You can't carry them with you; and the cheapest alternative option is on a slow boat, partial container load. Your only other viable option is air freight, and believe me when I tell you that your profit margin would be all but eliminated paying for a single international air freight shipment of designer hand bags. Now let's get to the fun part. In a country like Brazil, Colombia or Argentina (probably the only three places where there would be a significant market for such high end merchandise) do you really think the local customs department doesn't know what brands like Coach, Michael Kors, Louis Vutton, Prada, Dooney and Bourke, etc. are? The first thing they are going to do is verify if they are authentic. If they aren't they will immediately be destroyed and you may risk getting arrested or being fined a nice chunk of change. Counterfeit designer merchandise is highly illegal in all three countries. If they are originals, then they'll hand you a nice little invoice for the import duties (and by using the word "little" I'm trying to be cute...the invoice will probably be at the very least 25-40% if the original value of the bags). What could you tell them in rebuttal? The purses were for female relatives? All 30 or 40 of them?! LMAO!!!!! I'm almost sure they'd start to look around for hidden cameras because they would think they were on one of those pratical joke shows that are so popular in Latin America. Why do you think products like this are so much more expensive SOTB...even though there's hardly a significant market for them in most places?
 
Again, the title of this thread is Microbusiness for Colombia...not how to be a sugar daddy on a budget. The word business implies making a profit. Now if you're prepago hunting I'm 100% in support of these last couple of ideas. Why get with a gold digger and buy her a bunch of high end stuff in Latin America at an inflated price when you can save yourself thousands of dollars buying the same crap in the U.S. and taking it to them?!!!