One mistake people who are looking at exporting make is to fail to have a clear, rational offer, that is solid. The problem is two-fold: on one hand the sellers are trying to be helpful, and on the other, they are trying to learn what will work. They are open to everything when we already know exactly what the buyer wants. The salespeople keep running to the owner - can we do this, can we do that? In every instance, no good deed goes unpunished.
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Any buyer worth his salt will try to get as much as possible from a supplier. All buyers hate to leave anything on the table, to not get what anyone else is getting from a seller. They will push, whine, probe. There is no such thing as an outrageous buyer demand. There are only outrageous seller concessions.
The MOQ FOB (search the term on this blog) offer is your best defense, because you can keep returning to all the details in the offer, and only discuss a change one way or another of any of the detail items in the MOQ FOB.
The very fact that you have all the details published up front quiets the clamoring for gimmes. And since it is an FOB quote, prepaid, the buyer clearly understands you will take no risks on this shipment. Yes, the buyer understands the seller will take no risks... ultimately, buyers will buy if the product looks promising, the reason the buyer is talking to you is the product looks promising. Exporters need to be disciplined in never giving in on any point unless all extra costs are profitably covered...
Sellers who fold and give things away worry buyers. Such sellers are not long for the world. What is the point of testing products from a supplier that may not be in business in six months?
Giving in may be agreeing to pay some cost on the MOQ FOB, or agreeing to cover the cost of something like new labels. The answer is no, you will not cover the cost. You may be willing investigate what it will cost, and add that plus a profit to the price, but you will NOT cover the cost.
If the buyer can get you to put on new labels at $1.00 each cost to you, at no charge to the buyer, then the buyer does not have to put new labels on in his country at ten cents each. Why would he do it for a dime when he can get you to do it for $1 no charge to him? If you put on the labels and they are wrong, then it is all your fault. No good deed goes unpunished.
Anything you give for free is in effect a discount on the price. Once you discount the price, the buyer starts looking for more. It never ends. And there is a pattern in unhappy export results: the more talking the more likely some sort of failure in getting paid. The more talking, the more expectations, the more expectations, the more expectations to fail to get met. And scam artists, people looking to flat out rip you off, keep talking as you invest more and more time in the deal, and then they slowly get you to drop all defenses. Scammers get paid for their patience. Be impatient to move on to the next potential customer.
You will not be scammed with MOQ FOB because you say no, and you are prepaid.
In my book page 221 I have a section on the deleterious effect of discounts. Any freebie is in effect a price discount. They are far more damaging than you may think.
This back and forth is the process of getting to know you, know each other. Show yourself to be steady, calm rational. That makes you a more attractive long term partner.
If the seller ever gives in to a buyers demand, and gives a freebie, then the seller lost the opportunity to find out what objections there might be to the standard offer. Giving in now means you no longer know what you are doing. Don’t go there. When the seller gives in, he lost his margin while missing extremely valuable feedback.
I was a buyer for years, working with larger companies. Now that I am a one man operation, I still am. When working with buyers, keep in mind, spare the rod, spoil the buyer. They are like children, you have to beat them so they learn no means no. Like beating a child, done right, it only has to be done once. It's the kind of thing you do not want to have to do a second time.
The MOQ FOB should be is not all 300 items in your product line, but your best seller, one, maybe three items. You offer your best item to new customers, and new products to old customers.
Feel free to forward this by email to three of your friends.
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