The importance of trust in foreign trade transactions and its establishment skills

In foreign trade transactions, price is often one of the main factors that determine the transaction. However, even if we meet the customer’s price requirements, or even lower than their expected quotation, we may still encounter customer rejection. Behind this lies a deeper issue – trust. This article will explore the relationship between customers and middlemen in foreign trade transactions, and the impact of trust in the transaction process.

The essence of trust

When customers complain that prices are too high, we tend to focus on the price factor, but in fact, trust issues may be the root cause of failure to close the deal. Even if our prices are lower than other suppliers, customers may still refuse to work with us. This is because customers lack trust in us and no matter what certificates or promises we provide, customers always doubt our integrity and ability.

Two trust relationships

In foreign trade transactions, trust relationships can be divided into two types: direct trust and trust generated through intermediaries. Direct trust refers to the trust relationship between us and the customer, while trust through an intermediary refers to the customer’s trust in a third party, not in ourselves. Customers may choose to contact us through an intermediary because they do not trust us enough and need to rely on a third party to provide protection.

Trusted alternatives

Customers choosing to contact intermediaries does not mean that they have increased trust in us, but is more out of concerns about risks and the need for alternatives. Sometimes clients will even use us to handle matters without really intending to work with us. In this case, customers use intermediaries as alternatives to spread risks and seek better options.

Exchange rate risk response strategies in contract terms

In today’s era of globalization, foreign trade transactions have become an important means for many companies to expand their markets and enhance their competitiveness. However, as the international economic environment continues to change, exchange rate fluctuations have become a risk factor that cannot be ignored in foreign trade transactions. The recent continued fluctuations in the US dollar exchange rate have made many foreign trade friends feel anxious. When faced with potential losses caused by exchange rates, can we ask customers to adjust the balance amount?

Reasonably setting relevant clauses in foreign trade contracts can effectively deal with exchange rate risks. An effective approach is to indicate in the contract: “This price is calculated based on the current U.S. dollar exchange rate. If the exchange rate changes during the production process, regardless of whether it rises or falls, the two parties will negotiate and adjust the price based on the actual situation.” Such a clause provides both parties with A flexible mechanism to deal with risks arising from exchange rate fluctuations.

Strategies for establishing direct trust relationships

Establishing a direct trust relationship requires starting from many aspects. First, suppliers should provide detailed company introductions, product certifications, success stories and other information to demonstrate their strength and integrity. Secondly, actively respond to customer inquiries and needs and provide professional solutions and high-quality services to reflect the company’s professionalism and sense of responsibility. In addition, through regular communication and interaction, customers’ understanding and trust in the company are deepened.

Use indirect trust relationships to promote transactions

In some cases, leveraging indirect trust relationships may be more helpful in driving customer transactions. This requires the supplier to establish a good cooperative relationship with the intermediary and ensure that the intermediary has full understanding and recognition of the supplier’s products and services. At the same time, suppliers also need to evaluate the credibility and reliability of intermediaries to avoid potential risks.

Coping with customers’ distrust and doubts

When customers show distrust or doubts about suppliers, suppliers should remain patient and honest, actively answer customers’ questions and provide relevant proof. At the same time, suppliers can also proactively invite customers for on-site inspections or provide sample testing to eliminate customer concerns and enhance trust.

Conclusion

Trust is one of the core factors in customer transactions in foreign trade business. Whether establishing a direct trust relationship or utilizing an indirect trust relationship, suppliers need to focus on demonstrating their strength and integrity and provide professional solutions and high-quality services to win the trust and recognition of customers. At the same time, in the face of customers’ distrust and doubts, suppliers should maintain patience and integrity, actively respond to and solve problems. Only in this way can we achieve better results in foreign trade business.