Choose the right price term

In a quotation, price terms are one of the core parts. Because which kind of price term actually determines the rights and interests of buyers and sellers, the division of profits, so, in addition to trying to satisfy the customer’s requirements, the exporter is required to fully understand all The true meaning of the price term is carefully selected and then quoted based on the selected price term.

Choosing to trade on FOB prices is beneficial to themselves in the volatile market conditions of freight and insurance premiums. However, there are also many passive aspects, such as: due to delays by importers to ship, or delays in shipping due to various conditions, the name of the ship will change, so that exporters will increase the cost of warehousing and other expenses, or because of late payment Loss of interest. The exporter controls the export goods. Under the FOB price condition, because the importer and the carrier contacted the ship, once the goods were loaded on the ship, the exporter wanted to resell the goods in transit or destination, or take other remedies. Measures will also take some twists and turns.

Under the condition of CIF price export, the problem of convergence between cargo and cargo can be better resolved, allowing exporters to have more flexibility and flexibility. Under normal circumstances, as long as the exporter guarantees that the goods to be delivered meet the contractual requirements, the importer must pay as long as the documents submitted are complete and correct. After the goods have passed the ship's side, the importer must not refuse to pay the goods due to damages, even if the goods are damaged or lost when the importer pays. That is to say, an export contract that is sold at CIF price is a specific type of "sales document" contract. A savvy exporter must not only be able to grasp the quality and quantity of the goods he sells, but also grasp every aspect of the process of the arrival of the goods at the destination and the collection of goods. For the control of cargo loading, transportation, and cargo risk, we should try to obtain a certain degree of control, so that the profit of trade can be guaranteed. Some large multinational corporations are required to obtain favorable conditions in transportation and insurance and require Chinese exporters to deal with FOB prices, that is, to ensure their own control. For another example, most of the goods exported to Japan are FOB prices. Even if exporters provide very favorable conditions, it is difficult to change the price conditions. Therefore, whether it is to meet the needs of buyers or adhere to their own principles, it is very necessary for exporters to be more circumspect when making quotation.

In the present situation where export profits are generally not very high, it is more important than ever for each link in the entire trade process. Some domestic export enterprises have good export profits. Their approach is to report FOB prices first, so that customers have a comparison of the company’s commodity prices, consult CIF prices, and insist on arranging transportation and insurance in the domestic market. They are very candid and say that doing so not only gives buyers more choices, but sometimes they can make a little difference in their insurance premiums.