Export price term selection and cross-border e-commerce quotation analysis
In the cross-border e-commerce environment, the choice of export price terms is crucial. Sellers need to consider many factors such as risk of cargo damage, liability burden, and mode of transportation. This article will synthesize these elements to help sellers make a more informed choice when making an offer.
Consideration of risk of cargo damage
When choosing price terms, the seller first needs to analyze the risk of damage to the goods that may be faced during transportation. During the transportation of goods from the seller’s warehouse to the buyer’s warehouse, there is a risk of loss of goods caused by natural disasters or emergencies. According to international trade terms (such as CFR, CIF, etc.), the seller is responsible for delivering the goods safely to the port of shipment, and the loss of the goods after shipment has nothing to do with the seller. However, in the case of using the DAT, DAP or DDP terms, the seller not only has to bear the transportation costs, but also is responsible for the risk of loss after the goods arrive at the designated place in the importing country.
Analysis of responsibility burden
Different price terms have different impacts on the seller’s responsibilities for transportation and insurance, which in turn affects the seller’s expenses and profits. For example, FOB (free on board) makes the seller less responsible and is suitable for situations where freight rates fluctuate greatly, while CFR or CIF allows the seller to arrange transportation and control the stability of the transportation process. While the seller will include all costs in the price when making an offer, the difference in liability still has a potential impact on profits.
Application of transportation methods
According to INCOTERMS2010, some terms only apply to specific modes of transportation. For example, when choosing air freight and not wanting to bear the cost, the seller should choose the FCA term instead of FOB. Overall, different transportation methods directly affect the seller’s responsibilities and cost arrangements. The seller should flexibly choose the appropriate trade term according to the specific situation.
Practical examples of price terms
In the actual operation of cross-border e-commerce, FOB and CIF are frequently used terms. FOB requires the buyer to ship the goods at the shipping port specified in the contract, and the seller should notify the buyer in a timely manner. For CIF, the seller must complete delivery when the goods pass the ship’s rail. Even if the goods are damaged during payment, the importer cannot refuse to pay for the goods, thus ensuring the rights and interests of the exporter.
Some exporters, when facing profit pressure, will first use FOB quotations to attract buyers, and then provide CIF prices. This not only gives buyers more choices, but also may make certain profits from transportation and insurance costs. space. This strategy shows flexible response to market competition and accurate grasp of demand.
Summary
In the current complex trade environment, sellers must think deeply about the choice of export price terms. Whether it is the risk of cargo damage, liability burden, or the application of transportation methods, they must all be considered comprehensively to ensure maximum benefits. A reasonable quotation strategy can not only promote transaction completion, but also enhance market competitiveness.