MOQ FOB stands for "Minimum Order Quantity, Free on Board (named port presumed). In international trade FOB is an incoterm, with precise legal meaning. In essence, it means the price of the goods with all freight and costs paid to the export port (that named port.) FOB will always have the name of a port associated with the term, eg, FOB Elizabeth.
The "Free" in Free on Board, means free of any encumbrances such as sheriff's liens, bill notations for short or wet boxes, etc, and of course all freight and fees paid to get the goods loaded on the vessel.
MOQ FOB is a tactic in international trade used to at once...
1. Make export sales no more difficult than domestic sales.
2. Make export sales even less risky than domestic sales.
3. By implication outsource export market development.
4. Direct export marketing efforts at the best customers worldwide.
5. By virtue of the fundamental research in the process, front run competitors world wide.
6. Maintain engagement with the customer on the basis of "if not, why not?"
The tactic is ancient, and new research has confirmed the tactic is widespread and effective.
Ironically, this tactic is the most effective and least costly way of export market development, largely employed at the small business level, although large businesses may employ it to discover new markets. By offering the simplest possible deal, on the prospective sellers side is a clear understanding of the offer, which makes any requested changes by the buyer very clear inasmuch as they deviate from the clear MOQ FOB. Studying and pricing changes is easy.
With a firm grasp of buyer requirements, keeping the buyer engaged as long as it appears profitable is doable. The tactic is common in most business, but appears to be unknown in food and agricultural trade, for reason having to do with the relentlessly bad advice that industry gets regarding market development.
Search this blog for MOQ FOB for more on this topic...
Feel free to forward this by email to three of your friends.
The "Free" in Free on Board, means free of any encumbrances such as sheriff's liens, bill notations for short or wet boxes, etc, and of course all freight and fees paid to get the goods loaded on the vessel.
MOQ FOB is a tactic in international trade used to at once...
1. Make export sales no more difficult than domestic sales.
2. Make export sales even less risky than domestic sales.
3. By implication outsource export market development.
4. Direct export marketing efforts at the best customers worldwide.
5. By virtue of the fundamental research in the process, front run competitors world wide.
6. Maintain engagement with the customer on the basis of "if not, why not?"
The tactic is ancient, and new research has confirmed the tactic is widespread and effective.
Ironically, this tactic is the most effective and least costly way of export market development, largely employed at the small business level, although large businesses may employ it to discover new markets. By offering the simplest possible deal, on the prospective sellers side is a clear understanding of the offer, which makes any requested changes by the buyer very clear inasmuch as they deviate from the clear MOQ FOB. Studying and pricing changes is easy.
With a firm grasp of buyer requirements, keeping the buyer engaged as long as it appears profitable is doable. The tactic is common in most business, but appears to be unknown in food and agricultural trade, for reason having to do with the relentlessly bad advice that industry gets regarding market development.
Search this blog for MOQ FOB for more on this topic...
Feel free to forward this by email to three of your friends.
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