Foreign trade novices must know the principles and techniques of quotation and detailed explanation of export commodity cost accounting

In foreign trade business, correct quotation is the key to winning customer trust and orders. This article aims to share the quotation principles and techniques that foreign trade novices must know to help them establish a good quotation strategy and achieve long-term and stable business development.

Understand the market conditions and quote the actual price

Before quoting, you must fully understand the market conditions and ensure that the quoted price is in line with the market value. Remember not to blindly follow other people’s quotations, but determine the quotation based on the actual value and quality of the product, and avoid quotations that are too high or too low, so as not to scare away customers or damage your own interests.

Control discounts and maintain integrity

When a customer makes a counteroffer, the discount should be controlled between 1% and 3%, and should not exceed 5%. Discounts that are too high will make customers doubt your integrity and affect the cooperative relationship. Maintaining appropriate discounts and showing integrity will help build good customer relationships.

Flexibly respond to customer bargaining

For customers who are aggressive in bargaining, you can hold back when quoting, but you must pay attention to maintaining transparency and integrity. For new customers, you can sincerely explain the reason why you have already given the lowest price and can no longer make a profit, or you can show the customer the reason why you can no longer reduce the price by calculating the cost.

Achieve a win-win situation and establish long-term cooperative relationships

Foreign trade is a long-term business. To achieve long-term and stable development, a win-win result must be achieved. Consider the interests of your customers and ensure they can make money and build a good relationship. Repeat customers are the key to foreign trade business. Only by achieving a win-win situation can we win customers’ trust and repeat business.

Provide quality services and leave a good impression

In addition to attractive prices, we must also provide services that satisfy customers. Follow up in a timely manner, answer questions, and ensure that customers have a good impression of you. High-quality service is the key to retaining customers and an important way to establish a good reputation.

Export commodity cost accounting

The profit and loss of foreign trade enterprises is an important indicator for assessing the management level of foreign trade enterprises. In order to control losses and increase profits, my country’s foreign trade companies must perform cost accounting on the goods to be exported before transactions. In each export transaction, foreign trade enterprises should ensure that the exchange cost of their export commodities is no higher than the exchange rate of the unit’s foreign exchange income (the bank’s foreign exchange buying price), in order to make profits.

The cost accounting of export commodities mainly includes the following two economic benefit indicators:

1. Profit and loss ratio of export commodities: The profit and loss ratio of export commodities is equal to the profit and loss of export commodities divided by the total export cost. The profit and loss of export commodities refers to the difference between the net RMB income from export sales and the total export cost. If the former is greater than the latter, it is a profit; otherwise, it is a loss.

2. Exchange exchange cost of export commodities: The exchange cost of export commodities refers to the ratio of the total export cost calculated in local currency (such as RMB) to the net export sales revenue calculated in foreign currency (such as US dollars). In this way, we can get how many units of local currency are exchanged for how many units of foreign exchange, for example, how many RMB are exchanged for how many U.S. dollars. If the exchange cost is higher than the foreign exchange price in the foreign exchange market at the time of settlement, the export will be a loss; otherwise, the export will be a profit.

In summary, through the application of the above quotation principles and techniques, foreign trade novices can better formulate quotation strategies, avoid falling into price wars, establish good cooperative relationships with customers, and achieve steady development. At the same time, reasonable cost accounting is also one of the keys to the success of foreign trade companies.