9. Negotiating Is An Art
Your buyers will be pleased if they manage to negotiate considerable discounts. Don’t disappoint them. Include at least 10% in your export price list for negotiations. By discounting the price you’ll be able to gain better terms. However, you have to be careful with allowances. If the price is too high you may never get a buyer at all.
Learn about cultural differences
You may offend your potential buyers if you fail to learn about cultural differences especially in the Middle East and Asia.
For example, you wouldn’t ask about your host’s wife if you have been invited to visit your counterpart’s home in the Middle East.
In Asia, if you are invited to a business lunch you should be prepared for a 1-2 hours conversation, which has nothing to do with your prospective deal. You’ll be asked about your family, childhood, hobbies, favourite food, etc. and you should react accordingly. Asian people want to know whom they are dealing with before any business discussion.
All oral agreements must be confirmed in writing
This has to be one of the “golden rules” of your operations. You must have a written confirmation of agreed terms on hand before you act. A promise “to send you a written confirmation tomorrow” is not good enough.
Exclusivity is possible but not before you know your buyer
Lots of potential buyers will ask you for the exclusive rights to represent your products or company in a particular market before they start trading with you. Don’t decline this possibility, declare that you are open for a discussion but also get to know each other, establish a relationship, test the market and so on.
When you agree to provide exclusive rights to a foreign company, you should consider which conditions are to be included in the exclusivity agreement.
First of all, do not sign such agreements for longer than a year. If you are happy with your sales, you can always prolong it.
You should require that a certain quantity of your goods would be sold in a certain period of time, say 4 to 6 months, with the possibility to terminate the agreement if the buyer is not able to meet this condition.
The value of the first order is another issue to consider when negotiating exclusivity. 20% of the agreed yearly quantity prepaid is considered to be a fair deal.
If you need a translator – get a good one
Sometimes buyers may require signing a bi-lingual contract. In this case, the accuracy of business translation is crucial. Varied use of terminology in different countries can have an entirely different meaning and cause costly disputes.
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