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Exporting Basics

Follow these basic rules to respond to overseas inquiries (see Sample Inquiry Responses in Appendix E1).

• Reply quickly or not at all. Delay implies lack of interest or insensitivity to the prospect's needs. Also, delays give competitors more time to win the business. Use E-mail, fax, airmail or express delivery as appropriate. Surface mail can take weeks to reach some countries.

• Answer all questions. The inquirers may ask many questions, but should not have to ask the same questions twice. If one of your standard letters answers the questions, send the letter. If not, revise the letter to answer the questions.

• Use a business-like tone. Impersonal form responses don't make a good impression. A Word Processing program can easily add customized touches to a standard letter. Be friendly and courteous, but avoid slang or informal responses. Include name, title and contact information in all correspondence (phone, fax, E-mail and Web address). Print all letters on company letterhead.

• Reply in the language specified. Most inquiries are in English. Some are in the author's language but invite a reply in English. If the inquiry is not in English, have it translated so it’s clear what the prospect wants. Translate the response if requested. Commercial translators will do this for a fee. Some colleges and universities also offer translation services. For instant translations of uncomplicated messages from English to 8 languages, and vice versa, try Alta Vista’s Translate with Babelfish.

• Enclose product brochures, price lists and other information. Use your materials to answer most questions, so that the next communication will be a request for quote!

Should you respond to every inquiry? No. You might disregard form letters or inquiries that are clearly unprofessional or poorly written. However, it’s not always possible to distinguish serious from frivolous requests. Err on the side of responding to all or most inquiries. If in doubt, don't send samples or bulky product literature that costs more in postage.

Delivery costs are the major cost variable. They will depend on whether you or the buyer will pay the transportation costs after the product leaves the factory or warehouse. The buyer will specify which delivery price to quote, using the appropriate INCOTERM. The INCOTERMS (Appendix B2) most often used for this purpose are:

• EXW (Ex-Works, cost at factory)
• FAS (free alongside) the carrier, including cost of goods, transport to the loading dock, and ancillary fees.
• FOB (free on board) the carrier, including FAS costs, loading fees, port charges, and other ancillary fees.
• CIF (cost, insurance and freight) to the final destination.

For example, quote a CIF price if the buyer wants a complete price to reach his destination from your factory (cost of the goods, plus costs for internal transport, overseas transport, and cargo insurance). Quote an FAS or FOB price to cover only the costs from your factory to the outgoing vessel or airplane. The buyer will arrange for and pay all costs from that point to his destination. Quote an EXW price if the buyer wants to arrange and pay for all delivery costs from your factory to his destination. In these examples, you are liable for the goods only up to the delivery point specified in the quote.

Although formats can vary, Proforma invoices should be neatly typed on business letterhead and cover the following points:

• Date prepared
• Exporter's name, address and telephone/fax/telex numbers
• Buyer's name and address
• Buyer's reference number and date of inquiry
• List and brief description of requested products
• Price of each item (it's best to quote in U.S. dollars to reduce foreign-exchange risk)
• Trade discount, if applicable
• Country of origin of the goods
• Gross and net shipping weight (in metric units where appropriate)
• Total cubic volume and dimensions (in metric units as needed) packed for export
• Delivery point
• Terms of sale
• Payment terms and method, including currency to be used for payment
• Insurance and shipping costs, specifying who will pay
• Total charges to be paid by customer
• Estimated shipping date to factory or U.S. port (it's preferable to give U.S. port)
• Estimated date of shipment arrival
• Any other terms of the proposed sale
• An explicit expiration date for quotation

When you and the buyer have agreed on the final price and terms, a Commercial Invoice (Appendix E6) is used for billing. As in a domestic transaction, the commercial invoice is a bill for the goods from the buyer to the seller. A commercial invoice lists the quantity, weight, unit price, and total price of each item exported, along with other basic information about the transaction (such as the address of the shipper and seller, and the delivery and payment terms). The buyer needs the invoice to prove ownership and to arrange payment. Some governments use the commercial invoice to assess customs duties.

Make sure the bill covers all costs, and that the delivery and payment INCOTERMS (Appendix B2) are clearly explained.