Please raise your hand if you’ve ever made a price commitment to a buyer only for someone to point out that that it’s unprofitable or clashes with some internal policy or contract?
Particularly at the start of a new relationship, this is not a position you would like to be in. All too often though, we hear of stories where this is the case.
Good news – there are simple steps to take to avoid this scenario – read on for some tips:
5 tips for avoiding the dreaded “can you speak to them again on those terms” question
- Set out a simple plan. Talk early, be prepared. Ask your team to get access to relevant information sources and collect any information you need from the customer. It’s never too early to get indicative quotes, even when you might not have all the relevant information – it can set you on the right track, from freight forwarding and cargo insurance to duties and tariffs.
- Get expert ‘eyes on’ all angles of the deal. Import and export procedures and regulatory complexities can trip up the sale if you don’t go into the details from sales, export finance, logistics and contractual angles. Re-check rules of thumb which may not apply here and be ready to incorporate new things you learn into your process, such as customs clearance and tax procedures.
- Use a common language. This is critical as there is much more jargon – think Incoterms, Letter of Credit, Commodity Code – any one of which can impact the price. This way you can avoid getting into, say, conflicting insurance and terms of sale that are difficult to resolve, but it can also cut down protracted discussions about points that can be solved, for example about revenue recognition and title transfer.
- Know what’s commercially limiting. Things like payment terms, payment bank guarantee, letter of credit or escrow can introduce so much complexity and uncertainty that you may find difficult to clearly communicate and agree with the buyer. For example, even if selling Ex Works, you need to avoid breaching time limits on holding goods in country, after which you could be liable for VAT, plus needing to deal with extra storage costs.
- Get centralised technology. Being able to react with speed and professionalism is a key asset that will make you stand out against competitors. Technology that centralises key information for all, or the ability to look at the impact of changing terms, like date of delivery, point of sale or the return policy quickly, particularly around finance is crucial.
Enact some of these tips on your next deal and see how they work. Many exporters, of course, do not have resource to draw upon in the first place – you may be the finance, sales and shipping team in one. Here is where technology and innovative sourcing of export help should be central to your approach.
Looking for a tool to assist in the deal planning, obtaining quotes and export financing? Well, we’re designing such a tool for all that – try out Exabler.com and Register for a free account today.