Foreign trade quotations have their own special regulations. In theory, a formal foreign trade quotation should not only have a complete expression of price terms, but also include the name, price validity period, available quantity, delivery time, etc. Such a quotation is called a “firm offer”. In principle, it has considerable validity. Once the buyer accepts it, the quoting party cannot change it because the quotation almost covers the basic elements of the contract. The reason for the price validity period is to take into account the fluctuations in the international market, and on the other hand, it also helps to urge buyers to make decisions.
However, in order to be flexible and bargain, in addition to showing formality at the first contact, in most cases, some elements will be missed intentionally or unintentionally, making the format incomplete and becoming a “virtual offer” without final validity. Sending a virtual offer can leave more room for bargaining for both parties.
Flexible use of virtual offers is a basic skill in foreign trade negotiations. For example, after the quotation, if the buyer does not respond positively, you might as well send a low-price virtual offer to test the buyer’s idea. If the buyer is interested, adjust the shipment volume, make small profits but quick turnover, or deliberately extend or shorten the delivery time, which is beneficial to your own arrangements, save transaction costs, and make up for the loss of price reduction. Sellers can also quote several product combinations to make up for the gains and losses and adjust each other.
On the other hand, buyers will also test sellers. Especially when they first contact, buyers often ask for a bunch of products, but they actually only want one or a few of them. At this time, you should be careful when quoting. Unless the quantity is clear, don’t use the matching quotation easily. Because the matching quotation usually does not tell the buyer the seller’s true intention. In case the buyer only wants a low price and not a high price in the end, the seller will suffer losses.
Another situation is that the buyer is obviously an expert and familiar with the market, but deliberately asks for some old traditional products that can be bought everywhere. At this time, the other party may test the seller’s business style and quotation water, because these products are easy to get quotations from other suppliers for comparison.
The profit of old products is generally not high. If the seller is lucky enough to quote too high for these old products, the seller will convey the wrong information to the buyer, affecting the buyer’s trading enthusiasm for the products that are really interested, or think that the seller’s price is very empty and it is difficult to reach a deal.
The quotation can be a virtual plate, but when the price is finally confirmed, it must be in the format of a real plate, that is, price and quantity, delivery time, payment settlement method, etc. Otherwise, buyers place large orders at low prices, but the goods are not delivered in the end. The seller’s storage and production costs are burdened, and the original intention of small profits but quick turnover is completely meaningless.
The above are the real and virtual quotations in the foreign trade quotations shared with sellers. I hope it will be helpful to foreign trade sellers. Lianlian International always pays attention to every little thing of the sellers, and will bring articles on related aspects in future articles to help sellers operate better.