Import Vs. Export: What Are The Essential Differences?

By Indeed Editorial Team

Published 8 August 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

The activities of importing and exporting goods are essential to international trade for businesses around the globe. When you import and export goods, you have access to receiving and giving new resources and opportunities to other companies and consumers you may not have access to before when working. Learning about the differences between these two actions may help you increase a company's funds and decrease costs when opening international sales. In this article, we discuss import vs. export, share the definitions of each term and list the primary differences between these two activities.

Import Vs. Export

To understand the differences between import vs. export, here are the definitions of each term:

What is an import?

An import is purchasing another company's goods or services from another country and receiving them in your country. Importing means a country may lose funds because you are paying the transaction fee to the company in another country to receive the products or services. Consumers can import goods when purchasing a product created and shipped from another country. Companies can import goods from another country, such as raw materials, to create the product it manufactures. Companies can import their goods in a variety of ways, including by boat, freight and aircraft.

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What is an export?

An export is selling and shipping a company's goods or services to a different country. Exporting means a company creates its products or services in the home country and sends them to another country where the consumer lives, which means the company help promotes a country's economic growth. The creation of products in a country leads to an increase in the country's funds because it is using the resources it has and earning the money within the country, despite it shipping the product out of the country.

Often, when a country exports to another country, it may mean the home country has a competitive advantage. It may have a competitive advantage because the other country exporting the goods likely may not have the resources it is purchasing in the home country, making them depend on another country to supply it for them.

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The Primary Differences Between Imports And Exports

While both serve essential roles for economies and international trade, importing and exporting have several primary differences. The differences between these activities include:


The primary objective of importing is to fulfil the demand for services and goods unavailable in a country. As mentioned, the importing country may not have the resources or capabilities to produce particular goods efficiently. Businesses may also import goods or services from foreign markets if they cannot obtain them affordably at home. The primary objective of exporting is to generate income or government revenue by selling domestic goods to foreign markets. Entities may also use exporting to boost their international presence and market share or sell a surplus of goods.

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Often, when working with importing and exporting goods or services, each activity has a similar but still has a differing process. To understand how to complete each activity successfully, it is essential to learn each step in the process to minimise delays in the imports or exports. Minimising the delays in exports allows a company to maintain satisfied consumers because their products are arriving on time.

Additionally, it is vital to reduce delay time in importing because it helps keep business processes operating efficiently and effectively, which also affects a company's consumers who are awaiting their purchase in the same country. Here are the common steps involved with importing and exporting goods and services:

The importing process

Here are the general steps for the importing process:

  • Performing trade enquires: The importing entity gathers information about the systems exporting the desired goods or services, including delivery rates and terms and conditions.

  • Obtaining import licences: Depending on the goods and services, the importer may require to apply for a licence to import and sell them in their country.

  • Placing orders: Once the importer decides who to purchase the goods from, they place an order with details such as quantity, quality and price.

  • Determining payments: When working with foreign entities, the importer may require to consider foreign exchange rates and get the currency or a letter of credit to make their payments.

  • Receiving shipment notifications: The importer typically receives a document alerting them that their shipment is on its way, often including an invoice and details about the shipping vessel, delivery schedule and the goods included in the shipment.

  • Going through customs: The importer also typically receives a notification when the goods arrive, though these items first undergo the customs process to ensure compliance with domestic laws and regulations before their release.

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The exporting process

The steps for exporting goods and services to foreign entities include:

  • Responding to enquiries: Often, exporters respond to potential importers' requests for information about their delivery terms and goods, including quality, price and appearance.

  • Receiving and accepting orders: After responding to potential importers' enquiries, the exporter may receive an order for the goods or services they offer they can fulfil.

  • Obtaining export licences: Like importers, exporters may require authorisation to gain permission to dispatch and sell particular goods to foreign entities.

  • Producing and packing goods: The exporter fulfils customers' requests by developing and packaging the ordered goods and inspecting the shipment to ensure its quality.

  • Receiving customs clearances: The exported goods receive approval from the customs agency to verify paperwork and any necessary fees.

  • Preparing invoices: Once the exporter ships the order, they create and submit an invoice to the importer that details the quantity and price of the shipment.

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Trade balance

A country's trade balance may show the overall health of its economy. For example, a country exporting more goods and services than it imports creates a trade surplus. Trade surpluses can represent a healthy economy, showing a positive currency flow from foreign entities. Meanwhile, a country importing more than it is exporting represents a trade deficit. As a result, the country may require a loan or borrow money to pay for additional imports and cover its deficit. You can use the following formula to determine a country's balance of trade:

Balance of trade = total value of exports - total value of imports

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Effects on the global domestic product (GDP)

Imports and exports have differing effects on a GDP. A GDP or national total income is a country's total market value of the goods and services the companies inside the country produce within a specific time frame, for example, a month or a year. It is essential for a country to total the number of imports and exports it has conducted to determine its GDP. Importing and exporting have differing effects on a country's GDP.

For example, if a company imports more than it exports, the company's home country may experience a lower GDP. If a company exports more than it imports, the country may enjoy a higher GDP. Here is a GDP calculation to determine a country's net exports:

GDP = consumer expenditure + investment expenditure + government expenditure + total exports – total imports

Related: What Is The Full Form Of GDP? (Definition And Calculation)

Business influences

Sometimes, companies import goods or services to lower costs related to manufacturing or operations. For example, a car manufacturer may import parts from another country to build the cars. Buying parts may be more cost-effective than creating them itself. When importing goods, businesses can order large quantities of items and receive them at a discount. After saving these costs, the company may sell the items at a price that boosts its profits.

Exporting goods may help increase its sales and overall sales potential. Exporting companies look beyond local markets and find opportunities to expand their reach internationally. This expansion helps companies boost their global presence and connect with even more customers who may want to purchase their products. Exporting also encourages domestic production, which may lead to more industry jobs.

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