Ideas to start a Chemical Trading and Marketing Company - WorldOfChemicals

How to Start a Chemical Trading and Marketing Company?

Category : General Chemicals
Published by : Data Research Analyst, Worldofchemicals.com

The global chemical market is huge, which comprises of various segments. This market is complex, which makes it difficult for customers and new entrants to understand the dynamics of pricing. The is due to the prevalence of inter-linking, joint ventures and sales agreements in companies. Odds are that multinational corporations already have presence in big markets or could be directly selling to end user markets.

 

Considerations Market Research

Multinational corporations are renowned to have monopoly over fixing market prices, which is aimed towards new players, to restrict their their market entry by setting low prices. New traders should preferably deal with base chemicals due to their broader demand and usage, which would fetch more potential customers. New players can also get into specialty chemicals. However, a deep understanding of the product and market must be established as they require special licenses and paperwork, which could be difficult to obtain due the low credibility of the new player in the industry.

 

Team and Services

A good eclectic mix of technical support executives, marketing executives, capable salesmen and skilled tradesmen are required for marketing and trading. One can stand out in the specialty chemicals market by providing technical services, coordination for sampling, commercial assistance, order approval, logistics and warehousing support.

 

Supply Chain and Logistics

Majority of end users, especially chemical manufacturing units have their supply chain sorted out or have made long term contracts with the manufacturers of raw materials. One must go beyond offering lower prices to replace existing suppliers. Logistics are of paramount importance in the chemicals market. Supply chain and logistics are the deciding factors in trading of chemicals, since they are associated with the type of packaging used. The wrong choice for packaging could lead to losses due to leakage during sea transportation.

 

Importing Chemicals, Certification and Anti Dumping Laws

Chemicals must be imported from top markets such as China, which is one of the top manufacturers of base chemicals. A new company can stay competitive by importing chemicals from these markets. Companies exporting their chemicals to other countries must have the chemical certifications needed in the country of importation. Companies importing chemicals must know about the dumping laws for those imported chemicals in their respective country.

 

Total Landed Cost and Profit Margins

A new company must be well aware of their total landed cost to ensure that they would make profit. The profit margins are low, around 5-8%. These profits are fetched by trading of common chemicals. This makes it imperative to understand the supply chain and logistics trail. Effective trade and packing routes are crucial to success.


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