Dealing with International businessman is not simple. You need some negotiation skills when you are dealing with an International customers/buyers. You also need some technical skills to deal with the manufacturer too. The negotiation skills will build up as you deal on day to day basis.

 

HOW TO NEGOTIATE: BUYERS / SUPPLIERS IN INTERNATIONAL TRADING BUSINESS?

 

Based on my 15 years into this business, what I am going to share with you are some Professional and Practical Tips on How To Negotiate with your International Buyer or Suppliers.

 

HOW TO START AN INTERNATIONAL TRADING BUSINESS

 

STEP 1 – PRODUCT IDENTIFICATION
Identify Product – To identify type product to be promoted and sell. Food ? Household ? Industry used ? Gadget?

Identify Market – To identify market segmentation.

Is this for high end or low end market, geographical location of the goods need to be sold, target group age , gender or general items.

 

STEP 2 – SOURCING
Sourcing of Suppliers – Sourcing of suppliers/manufacturer online can be a high risk.

You need to a visit and audit, if possible to the office and factory especially if it is a high value products.

Another option is to check through embassy, if it is an imported goods from the origin country.

Exhibition and trade fair is another avenue that you want to consider when looking for products.

You may also inquire manufacturer information from the embassy of the country if you know the product origin.

Note :This is to ensure that the factory is exist and genuine.

STEP 3 – NEGOTIATION
Negotiation of Product Pricing with Supplier – When inquiring for quotation, you can negotiate if the product that you are purchasing has a volume, let say 1 x 20’ container or new items or repeat order products.

We can negotiate for bulk discount or introductory price for new items purchased.

Supplier will provide a Quotation / Sales Contract / Pro-forma Invoice with Term & Condition
Eg. Payment Method and Payment Structure

 

STEP 4 – TESTINGS
Internal Product Testing and Sampling – You need to request samples for testing and evaluation by you and your customer also the Product Specification.

If it is a perishable (food & beverage product) or anything similar having an expiry date then you need to confirm the shelf-life of the product.

 

STEP 5 – COSTINGS
Product Costing – This covers cost of goods, cost of packaging, logistics cost, any legal document cost, audit cost, if any and also your profit.

 

STEP 6 – SAMPLES 
Sample Submission to Potential Customer – Once all products confirmed then only you can submit to your customer for presentation, evaluation and confirmation on Product Specification.

Pricing Submission to Potential Customer with T&C –
Pricing of goods to be discuss with customer with the payment need to be on Ex-Work (collect from factory) / FOB (Free On Board) / CNF (Cost and Freight) / CIF (Cost Insurance and Freight)

Sometimes customer will share the backwards calculation of the pricing structure and its target selling price.

Logistic Arrangement – Either supplier or customer can do the logistic arrangement. It is better if you can arrange your own logistics.

 

STEP 7 – ORDER
Confirmation of Order – Order Confirmation can be done by using email or sign in Pro forma Invoice/Sales Contract.

Pro forma Invoice– This document need to be details out with the specification, quantity and payment method.

Remittance Advise– Once confirmed, customer need to remit advance/partial payment and final payment prior to shipment or depending on the Term & Conditions in the Sales Contract/Pro Forma Invoice.

Note: To check and confirmed the reliability of customer or supplier bank prior making any payment to avoid problems during transfer.

 

STEP 8 – ARRANGMENT
Purchasing Arrangement
Logistic Arrangement – You may need to check the frequency of sailing schedule and also the duration of shipment.

Legal Documents – All these documents need to be ready prior or during shipment.
a. Audit report
b. Certification
c. Bill of Lading

Note : It is best for every shipment you engage with 3rd party international audit company ( eg. SGS ) to audit  by doing a Pre- Inspection Verification of the shipment prior loading into the container and ship out. This is being conducted in the manufacturer warehouse.

 

STEP 9 – TRACKING
Shipment Tracking – You need to get information and up-date on the freight tracking of the good either through the shipping agent or online tracking until the goods reaches its destination.
The online tracking can be done in most cases using the Bill of Lading number or container number.

All these step by step, tips and guideline following the above would be able to help you to minimize the risk of non deliver goods / inferior quality of goods during purchasing and also delivering the goods to your customers.

 

All these steps are made based on my experienced. Following this step by step and making a checklist from these lists will makes things very easy for me so that I do not miss out any steps that can be detrimental to our business..

I hope that you may find this information is useful for your new business or even for those who has run a business for sometimes.