But when he is quoting a price for an export order, the exporter must take into account a whole set of extra costs, and he must know which of these the buyer will take care of, and which ones he himself will have to cover.
(2) Terms of Delivery:
When an exporter quotes a price for a product, he is making an offer. If this offer is accepted by the customer, then a contract is formed an export contract. This contract includes the terms under which the goods are to be delivered.
These terms define which costs will be paid by the exporter and which by his customer. They also make it clear who owns the responsibility for the goods if anything happens to their. So, it is vital for the exporter to know what the terms of delivery used in international trade actually mean.
(3) Terms of Payment:
Many a businessman has found out too late that he has made a loss on a price he thought would give him a fair profit and his mistake was simply in quoting the wrong terms of payments.
An exporter must ascertain that he will get his money and that payment is not delayed beyond the terms which have been agreed upon.
There are several safe measures an exporter can take. He can make sure that his customer is credit-worthy. Next, he can insist that payment be made through such safe means as a Letter of Credit.
Using such safeguards means that the exporter can obtain protection from defaulters. A variety of terms of payment are available to suit different circumstances.
(4) Financing the Export Order:
But it is of no use if an exporter obtains a large order and does not fulfill it. He must check that he has the necessary cash to finance the contract bearing in mind that he may not receive payment for the goods until a certain point in the future.
The exporter must be able to time his cash inflow so that he remains solvent while fulfilling the order. He may have to arrange special financing which is available to exporters. He will probably have to produce the goods and deliver them to the market before being paid.
To summaries, to a great extent, successful exporting means following the basic rules of marketing, analysing the needs of the market and getting all the elements of the marketing mix right.
But exporting abroad can be a lot more complicated than marketing at home because of the great distance involved and such factors as having to observe different laws, or to deal with people the exporter may never have met and who speak different languages, and to ensure he gets paid when so much can go wrong.