#25: The Story Of My Car Importing Business

Sam: Hello and welcome back to another episode of the lazy entrepreneur we’re your hosts Simon Emma Priestly
Emma: hello
S: today I’ve got a historical subject for you I’m gonna tell you the story of a business I started long before I met you I don’t think you know anything about I think I’ve ever spoken about it to you before
E: that’s very ominous
S: it’s not ominous at all in fact it is a very classic type of business one that’s very easy to understand and it kind of makes sense why we did it and that is we decided to buy used cars here in the UK import them into Malta which is a European country and sell them
E: wow that’s not very online
S: nothing online about it at all it’s one these ones where saw an opportunity an opportunity so we went on holiday to Malta my friend he’s really into his cars Toby was wandering around and said these cars are really expensive here oh yeah he says they’re much cheaper back in in the UK but they’re basically the same cars they drive on the same side of the roads so I wonder if there’s an opportunity here to make some money importing cars and I decided to look into it and work it out and we spoke to a Maltese accountant who kind of gave us the lowdown and told us you know what cost would be involved in the cost of importing and getting an MOT out there and the road tax and that sort of thing we spoke to some freight forwarders some transportation companies to work out how exactly you get a car from the UK to Malta I just did a bit of research really
E: that all sounds very sensible
S: can you believe it well it’s business you see an opportunity does the opportunity really exist and really in this case it kind of existed so the reason cars are so expensive is kind of all cars are imported so there’s already that threshold of cost and the import duty they charge on imported cars is very expensive but it’s also a bit weird so some cars are very cheap to import the import duties very low and some are really expensive a lot of it works out to whether they’re good for the environment so the pollution aspects of the car basically you get two cars which would be exactly the same so like whatever the 1.9 liter versus 2.1 liter engine and one will cost a thousand euros to import the import duty and one will cost 8,000 and so the market doesn’t quite reflect that people just kind of import whatever cars they want and it’s kind of a weird opportunity where we saw it over some cars we could import and make what we thought was quite a good bit of money
E: sounds good it also sounds quite crazy
S: yeah it’s a bit ridiculous isn’t it I remember so this is 2011 so this was a long time this was eight years ago how old will I be doing I would have been 21 yeah just finished university yep
E: and that’s what I was gonna say had you done any other businesses before this
S: I was still doing all the gambling stuff
E: but that’s very different from importing cars
S: you can read about so I got an episode on professional gambling which is where I started earning my money but this is probably the first real business we did
E: Physical business
S: And it was a real business so in order to import cars into Malta we had to set up a Maltese registered company so we spoke to an accountant who did that for us it cost 600 euros to get that all set up so not even not that expensive really when you think about it and then we went for it we started to trial with one car to begin with and then the idea is we would we would scale up E: sound sensible
S: sounds sensible well what do you think well obviously I’m not still doing it now do you think it worked out
E: it just sounds crazy
S: so yeah why does it sound crazy but why is this and why is it crazy to start an import-export
E: I think part of it is the size of a car yeah it’s like the visual of you and Toby finding these cars in England putting them on some sort of like ship and then being the other side like being in motor to like greet them like it’s a very silly image at my head yeah yeah and why is that so different from you doing table tennis bats yeah
S: and why do you assume we would have to be there to buy the car and why do you assume we’d have to be there pick it up
E: I think there’s something about a car and it being very like an old-school business you need to be there to negotiate the deal it’s all about building relationships face to face that’s how I see it’s quite wheeler-dealer
S: and I think that is one of the problems we run into yeah so let me let me give you a spoiler to how the story ends in it was a successful business we made about 10,000 euros out of it and then decided to not do it anymore the kind of hassle around it wasn’t really worth it but it was something that we thought did have legs and if we really worked it could have become a really successful business but just a bit of a nightmare and the nightmares of what I’m gonna talk about here and most of the nightmares were more due to the different culture of buyers in Malta and the way to do business there then how we do business here
E: well that is interesting and that’s not what I would have assumed
S: actually all the stuff you’re talking about you know us having to like pick up the car like we found someone company for a thousand euros they would go to the dealer pick up the car and take it all the way and deliver it to the customer in Malta and we kind of had this idea that we would have relationships with dealers here in the UK here we could buy cars sight unseen and dealers in Malta who would buy cars from our sight unseen we’d just be doing this middleman type thing they say to us in Malta can you source us this car for this amount of money and we would say we’ll look into it and then we go and find a dealer who had that car and then just basically take a commission on the difference
E: yeah sounds good
S: that’s one aspect we attempted and the other aspect we also attempted was trying to sell direct to customers so let’s dive in one thing we thought is that we really needed someone in Malta so we had a friend who had a history of working for car dealers in the UK who had just split up with his girlfriend I was looking for a change in life so we said to him why don’t you start this business with us you can do 50% we’ll pop all the money and this kind of thing, we can run it from here in the UK and you can move to Malta and run it from there and that was Rick and that’s exactly what he did we found a car where we thought we were getting a good deal here in the UK we checked so there’s a website where in Malta where you can check how much import duty would be we talked to an accountant who told us how much the VAT would be I’ve got all the numbers here not it’s not interesting but yeah but whatever it was I think it was about 300 euros for this and that it was the the shipping was a thousand euros the import duty was probably another thousand euros that’s what we did we took out this little car and go there and then start trying to sell it and that’s kind of where it sat for a while it took us about two and a half months to sell it in the end
E: what why
S: that is a good question why did it take us that long and the same thing happened for the next car as well so that car was a BMW 1-series and the next one was a Mini Cooper both of which we tried to sell direct to retail to customers
E: quite a nice-sounding cars I don’t know anything about cars but they sound like the kind of car you’d want to buy
S: very nice a top car I’d like to have and so we created a website I paid a web developer 250 pounds on it’s called Odessa now it’s called upwork to make a nice website for us we were called imports Malta or something like that something or imports MT I think it was a bit lame we had our little company registered out there and we were trying to sell them and one of the problems we found was that people in Malta really like to swap things
E: Wow
S: generally they don’t buy stuff out right they have laws over there about buying stuff on credit that basically loans with interest are illegal
E: that’s really interesting so people aren’t buying new cars
S: so they can’t buy a new car and the only way they can buy a new car is by swapping something so you’re like this one person offered us we’ll take two cars of us in exchange for a house
E: what
S: yeah it’s quite common the people will let’s say you inherit an apartment you want a new car E: were you interested – what was the house like
S: I can’t remember
E: I mean it sounds like you’re in a silly enough position that you would have considered it. This is getting weirder and weirder
S: It’s a weird story so we’re offered houses eventually we so I think the Mini Cooper we swapped for a BMW z4 which is like a much nicer car and that we then swapped for something else we swapped that for a convertible Peugeot with some extra bit of money on top of that and this is the problem we had we just kept on flipping these cars taking a little bit of money each time because people the sort of people buying these used cars don’t have the cash to buy them outright
E: Had you done research into the consumers in motor and how they bought cars you just looked at the price and that was it
S: no I didn’t do anything on that side so we had to see we just kept kept swapping cars and it took us ages the second car took us 7 months to sell to get to go from importing into the country to getting the money from that final swap
E: Wow
S: finally getting the sale to someone who paid us actual cash for it which is quite a funny place to be in and like what do you do all these cars so at one point we looked into renting a garage we found a 12 car garage for about 500 euros a month thought maybe once we scale up we’ll get that for time being we’ll just park it on the side of the road somewhere in Malta Rick had the Maltese phone number so if someone saw us on Autotrader or on our website they could phone him up he’d take the car to them or they come to him
E: that is hilarious
S: we went on holiday a few times to Malta and whiz around in our convertibles it was all quite funny really but it’s all a business which could have turned into something really big something I forgot to say was that the first car we imported it arrived to Malta got to customs and just sat there
E: oh no
S: ok like what’s happening
E: did you have to pay them off
S: yeah you’ve guessed it so eventually we discovered that the done thing is to give a bribe to the customs
E: what we talking in terms of money
S: good question
E: is it huge or is it like almost like an admin fee
S: I you know what I have no idea how much we ended up paying
E: Because if it’s like 50 it’s like neither here nor there
S: I didn’t even write it down so I can’t be very much
E: but if you took it like a thousand
S: it wasn’t a thousand euros it was maybe it was like 200 euros or something
E: That’s not too bad
S: and then by the weekend the car had been released
E: amazing
S: and we never had that problem again it was just the first day and maybe it was like now that they know us type of thing yeah that was he building a relationship with him that was it and maybe some other dealers in Malta wanted to sabotage us but maybe not so we had to bribe someone to get the car through customs then we had the car sitting around in the dusty streets of Malta waiting for some buyer we kept having swaps for stuff we didn’t particularly want but didn’t really have a choice about but it kind of worked and I think if you’re there doing it the whole time it makes sense and we were buying the cars kind of sight unseen here in the UK so dealers we kind of trusted we would get in touch with and they would say we got this car we’ll give you a deal on it we would then take it get it over to Malta so that was the retail side a big headache you could make it work if you treated it as a serious business and to be honest if you’re trying to get in to starting a car dealership what a better way to go you don’t need any need any high rents you’re just doing a little bit of pokémon on the street you can get a cheap garage for a little bit the other route we took was talking to dealers out there and asking them if we can source cars for them so for reference with that Mini Cooper we bought it for 10,000 euros the total sold price by the time we got rid of it was twenty thousand euros and after all the costs in between we made a little over five thousand euros so the profits were pretty decent
E: yeah
S: the BMW 1-series or seven thousand eight hundred euros we ended up selling it for a little eleven thousand nine hundred and made about 1800 profit
E: I guess yeah it sounds good but then it’s a huge amount of time and effort
S: But if you’re scaling it up you know if you’re doing quite a few it does make sense and there were good margins it just wasn’t an online business, it wasn’t one I can do sitting in my bedroom it was quite an old-school business
E: which isn’t really you
S: and then the final route we took yet was talking to dealers so this is the route we wanted to do the whole time we thought we can make five hundred to a thousand euros a car but basically have a buyer lined up before we buy it and this took us a long time to get sorted because it’s even more old-school the way that people work there than here so you go talk to a dealer and they just wouldn’t want to deal with you they wouldn’t want to buy a car off you so eventually after building relationships with people I remember one of them offered to swap us a watch for a car that kind of weird stuff like that some sort of Rolex for one the cars
E: for them it’s fair game that’s a legitimate but for us obviously that brings alarm bells and it sounds very dodgy
S: sounds very dodgy to me and a few people were like yeah we’ll do it but we’ll pay you afterwards and I was like no I don’t really trust you eventually we found someone who wanted he wanted a bid on the five series and was willing to pay upfront the cost of it great so we basically sourced it told him how much it would be and added our commission on top and did that
E: great
S: and that was a great one it took about three weeks for the car to get from the dealer to him it was all kind of done I don’t think I ever saw the car it just went straight from them to them we’ve got the money upfront and we made wherever it was 750 euros off that so I feel that this is an example of a business that we went into completely naive we made loads of mistakes but it still could have been translated into a into a business and as you said it’s just a bit silly so I thought you might like the story
E: yeah it is a very silly story and it’s so like you know how you say it’s good to be naive going into setting up your own business it’s just like so extreme naivety it’s comical
S: like would anyone have predicted we would be able to make it work
E: no definitely not definitely not and
S: I think knowing me now you’d still assume I wouldn’t be able to make it work
E: definitely and actually knowing more about Malta and definitely
S: and knowing more about Malta definitely yeah extremely naivety led to and like we did do research before getting into it and even if it failed we haven’t spent that much money that’s the other thing it’s not like we’ve bought a dealership out there invested in a hundred cars and then tried to sell them we started one at a time
E: what do you think you learn from doing this business
S: that’s a good question
E: and what do you think you took to other businesses later on
S: I think I learned that gambling is a lot easier than real life business
E: easier in a way that you don’t have it’s less hassle and it guarantees you more money
S: I think just at that point in time we were making a lot of money doing something that wasn’t particularly taxing no I think what I learned was kind of what you were talking about with naivety just going for it like I wasn’t burned by this business at all yeah which is which is good because if I’d started by doing the coffee shop I probably would have never started another business again because it was so much work so difficult to make money and so committed by having raised a ton of money for it and all the stress that’s around that whereas this business was low investment it was even if it failed completely we would have lost on that first car we would have lost under 10,000 pounds for everything involved which as businesses go isn’t that bad and I would’ve gotten a car out of it and another thing I learned was that the people who facilitate these businesses the people who transfer the car it’s in their interest to help you and even though you’re 21 years old and you’re asking really stupid questions they still want your business that’s then been true for everything else we’ve done the same with a coffee shop speaking to the people who provide the coffee the roasters or the people who make the coffee machines etc they really wanna help you and they’ll give you all the advice you need and help you with every step
E: yeah that’s really good awesome
S: well there you go another silly business and that’s it thanks for listening and good-bye