How much is the fish?
I spend some time working in export business, and still here. I think, since 2012, I participated, conducted and took part in a number of negotiations (hard to count how many, something about 400). Experience and passion to help people to make their daily or business life better, nicer and easier push me to be as PRO as possible, at least for this current piece of time in my life.
Some of the negotiations were very successful, some very satisfying, some has never started. I notice one small technical thing, but I guess very important THING. Many people approach international trade as buying fish at local open air market in a nearest city:
- How much is the fish?
- 100
- oh, 100… for the whole one?
- Yes.
- Nice, give me one.
International market and international trade is different, and here I have some reasons why?
First of all, you probably know local place where ever you happen to live, and I guess you know local guy or lady selling the fish at nearest open air market, you probably, time to time even drink lemonade or having lunch with him, her or both of them at local cafe. I mean you know who they are and the quality they perform, and I promise you, this is the only reason why you just ask them, how much is the fish? You can't do that at international trade, at least dont do that with me please =) International trade model is a bit different, we dont know each other. We never met each other. It is probably hard to imagine, but I have no idea about your preferences: latte or ristretto? (I mean not yet. Usually, I know my customers very well). Both of us have no idea about our local markets, business and production models. We dont know financial tools of potential customers. Social media made a very good step forward to help people to meet each other, but at the same time a huge step forward for an alternate reality, too many too perfect accounts, if you understand what I mean? The reason to write all of that is following, how much is the fish? - does not work within the Global Earth Market.
This is why, I think the following steps are good (it is a full cycle from the meeting unknown company to closing the deal):
1. Intro call to get know each other. Get know each other. Usually trying to understand if the seller is a producer or just re-seller, in case of buyer – end buyer or distributive importer. Who is to perform guaranty and to be responsible for different stages. Penalties. Discuss lightly preferable terms of cooperation. (20-30 minutes)
2. Exchange charter documents of company to give an opportunity to make due diligence on company, financial reports, ownership and owners. Add a draft contract to give opportunity to research it in order to save time and to know what to discuss for the next call.
3. Second call. Discuss carefully, quality, quantity, terms of payment, terms of delivery, package, terms of time. Take your time to analyze it all. Meet your lawyers and financial advisors again, discuss it all. Appoint another call to find a mutual benefit way, appoint another meeting to sign a contract or agree deadline to sign and exchange contract copies via online.
NOTICE: Every round of negotiations has to be followed by a minute (short document with a brief description about discussed and agreed things, points.)
Short analyze:
The step 1 is important to understand the NEED and to set up further process of negotiations. First professionalism impression is very WEAK within the International Trade, because of different cultures, different business cultures, mentality, state of mind and POOR English language (such as mine he-he =D ).
The step 2 is usually ignored. IF THIS STEP IS IGNORED YOU HAVE TO KNOW YOU DEAL WITH NON PROFESSIONAL PEOPLE. It probably will cost you money, and it will cost you time, energy, focus for SURE. This is the way to understand how serious the other side is. This is the answer for the question how transparent other side is? If they dont disclose some information, probably they have reasons for that, probably those reasons are the resasons to stay away from them.
The step 3 and other steps are after the step 2, because it is ridiculous to discuss important things with someone you dont know, never met before and have no information about. Price depends a lot on terms of delivery, terms of payment, quality, quantity, One time or multi transaction, how often will transaction happen?
The ?NOTICE? will save you time and secure you from changing terms of cooperation at every following round of negotiations.
So, never please ever ask at first message ?how much is the fish?? You may probably speak about quite different fish. =)
There is a way to go before the price can appear.
Good luck!