Buying for yourself, or buying for resale?
This is the easiest question to answer, and also the deciding factor for many people: Are you going to be buying one or two vehicles for yourself, or are you planning on buying a stream of vehicles for resale?
We are Integrity Exports, and we will be completely honest and upfront with you, because we don't want you to have a bad experience buying cars from Japan.
If you are looking to buy a car for yourself, or a couple of cars for your family, and that's it, then our advice is that you should not be buying those vehicles from Japan.
Why it works as a business
When you are buying a vehicle for your family, you need the kind of support that only a local car dealer is going to be able to give you. You also need to know that this exact vehicle will be perfect for you.
On the other hand, let's contrast this with somebody who is buying a stream of vehicles for resale.
Out of 20 vehicles in a month, let's say there are 14 that were able to make more money on than expected (perhaps by getting a better price at the Japan car auction than expected, or perhaps these cars were just in better shape than expected), 5 that you made your target profit on, and 1 that needed extra work on arrival and cost you extra money.
Of course, it would be easier if all cars made the target profit. But remember, there were 14 cars that made more money on than expected. This extra profit can cover unexpected events and unexpected costs. One car cost you extra money, but when you look at the big picture of all 20 cars, the month of sales has been a great success.
A car importing business can do this. But it's not possible for you as an individual buying a car for your family. If you get a car that exceeds your expectations at a price which is lower than your budget, you'll be jumping up and down in celebration -- but if something unexpected happens which entails extra costs, you'll be completely stuck.
Buying a single car from the auctions in Japan is a gamble because you cannot do the cost averaging that the bulk importer does. This is why Integrity Exports does not accept single-car buyers. In fact, there is an additional 50,000 JPY charge if you close your account (by requesting withdrawal of your deposit) before you have bought at least three vehicles for this very reason.
(Of course, we understand that many importers buying a stream of cars for resale start with a single vehicle to test out the system before buying more. That is completely fine.)
Import Rules
Congratulations! If you are still reading, you have cleared the first hurdle and it looks like buying vehicles from Japan's car auctions could work for you. But, of course, there are still some important things to think about before you go any further.
The most important of these is the import regulations of your country. Some countries have very broad rules, which allow many different kinds of cars to be imported. Other countries have rules which heavily restrict the kinds of vehicles that you can bring in.
You need to contact the specific government departments in your country that are responsible for imports and registering cars to keep up to date on these rules.
But it's not just the rules about what you can bring in which are important. The other thing you need to think about is how much it will cost to comply with those rules, and what taxes and customs duties you will need to pay. So, you might find that it is possible to bring a particular vehicle into your country, but discover that the taxes and customs duties are just so high that importing this car will make no business sense.
Make sure you look at all the factors involved in importing a vehicle. Make sure you talk to all the relevant government agencies. Remember that a good customs agent can be a very useful guide in navigating this.
In particular, remember that different aspects of importing might be covered by different government agencies. For example, you might find that one government agency says it is okay to bring a particular vehicle in, but another government agency says that this will not be okay because it does not meet emissions requirements.
We are aware of import rules of many different countries, just because we hear about them from our customers. However, the best person to research them is you. You are on the ground in your own country. You speak the language, and you can physically visit or call different government agencies to ask questions and get information. Any information you get will be the most up-to-date information available.
It's not particularly glamorous, but it is an absolutely vital step in deciding whether importing cars from Japan is going to work for you. If the models you want cannot be imported, or the taxes and tariffs make them too expensive for your local market, then buying from Japan will make no sense.
The last thing you want is to find that vehicles you have bought cannot be imported, or that they end up losing you money. Whatever you do, do not skip this step.
Market Research
Double congratulations! If you are reading this far, you are obviously someone who is going to be buying a stream of vehicles for resale, and your research into the import regulations in your country has also been successful.
So now we come to the final step of determining whether buying cars from auction in Japan going to be right for you. This is the crucial step of market research. A business is not a business without products people want to buy. And whether somebody wants to buy your product depends on two things – do they want it, and is it the right price.
You need to get online, check the newspaper classifieds, and search out anywhere else that cars are being sold in your country. Take a look at the kinds of cars that seem popular. Take a look at the prices. Then use your 14-day guest access to our online auction system to see whether those cars are available at prices which will be profitable.
While doing that, make sure you are careful to avoid these pitfalls.
- Make sure you compare like with like. If the car in Japan is a grade 4.5 with 20,000 kilometres on the clock, don't compare it with a poor quality car with hundred thousand kilometres on the clock in your local market. In this case, the car in Japan is likely to be more expensive. Of course it will! It's a much better car with much fewer miles.
- Just because lots of people are selling a certain model does not mean it's necessarily a good idea to jump into that market. Sure, lots of people must be interested in buying that model, because so many people are selling it. On the other hand lots of other sellers will mean lots of competition for you.
- How are you going to stand out from the crowd? How are you going to persuade people to buy your car instead of the other guy's car? Sometimes it can be a good idea to go for something completely different, and build yourself a business in a niche where there is no other competition.
Again, this is homework which only you can do. It's not glamorous. It's not particularly exciting. But getting this right is key to having a profitable business, so do not skip this step either.
Over the years I have consistently found that the most successful customers who keep coming back, buying more and more, year after year are the ones who have been most diligent in their research.
No one can guarantee that your business will be a surefire success. However, if you follow through with the research we have been talking about here, I do guarantee that you will have a much better opportunity to succeed like they have.
