When making an MOQ FOB offer to a buyer overseas, buyers want their prices, plus documentation on the price ranges at retail in USA... that is, exactly what are the overseas buyers' USA peers getting in USA for the product?
What are buyers overseas doing with this info?
Obviously,
a. they are checking up on the exporter as to exporter's markups,
i. Check out maker's wholesale
ii check out exporters price
iii check out retail in USA - how does all that look?
b. making sure they have a good price
i. can they get it elsewhere cheaper/better
ii. can anyone else (in china) get it cheaper/better in usa
c. how to position in (say) China, given the USA info?
With Costco heavy in the MOQ FOB export offer, a buyer overseas does not want to test something out, find a market, only to find a competitor down the street is getting a better price through Costco than he is directly from you.
Secrecy and exclusives have no place in int'l trade. It is your job to make sure all is known so people can make decisions.
Selling to Costco at the small biz level is usually a bad idea since it is outsized sales which one day can disappear, leaving the overhead to serve a costco but no sales from Costco to support that overhead. A subproblem is Costco can wreck your export markets by exporting your product themselves. Or, looked at alternatively, Costco may very well create export markets you did not anticipate.
The important point is, get the facts, lay it all out there, and make rational decisions. No worrying about people going around you, no secrecy, no non-disclosures, no exclusives. But you are free to decline a Costco order, which at the small biz level I would recommend.
Feel free to forward this by email to three of your friends.
3 comments:
And therein lies the challenge for a non-manufacturer/export agent. He has to buy wholesale himself leaving no choice but to markup the wholesale price in his MOQ FOB offer. The importer then sees the markup and just buys EXW from the manufacturer, taking out the agent in the process. The agent needs to add more value somehow to make it worthwhile for the importer to deal with him.
@Agent007: but the small to mid-size U.S.-based manufacturer is not exporting themselves. That is the export agent's role. The manufacturer will not sell directly to the foreign buyer. The export agent's value is facilitating the product order offer, which is small in size/quantity, on terms that the foreign buyer finds acceptable to them. The U.S. manufacturer just does not want to bothered with the hassle of dealing with customs brokers, shippers, etc. for such a small order size to a foreign buyer which is seen by them as being too complicated and too much trouble. The small U.S manufacturer would rather just sell and ship to an American buyer in Atlanta, Chicago, or wherever, in the U.S. already - less hassle, less complicated, much easier.
@Anonymous: A manufacturer selling EXW to the importer is like a domestic sale. Compared to FOB, EXW is even simpler. The manufacturer almost doesn't have to do anything but have the goods ready for pickup. In EXW, the importer deals with all the logistics. It's the simplest transaction for the manufacturer--no need to deal with forwarders, carriers, etc. You need to add more value, be more creative as an agent--like having an assortment of similar category products from different manufacturers in a single MOQ FOB offer/package.
Post a Comment