Selling Overseas

Many successful exporters first started selling

internationally by responding to an inquiry from a foreign

firm. Thousands of U.S. firms receive such requests

annually, but most firms do not become successful

exporters. What separates the successful exporter from the

unsuccessful exporter? There is no single answer, but often

the firm that becomes successful knows how to respond to

inquiries, can separate the wheat from the chaff,

recognizes the business practices involved in international

selling, and takes time to build a relationship with the

client. Although this may seem to be a large number of

factors, they are all related and flow out of one another.

RESPONDING TO INQUIRIES

Most but not all, foreign letters of inquiry are in

English. A firm may look to certain service providers (such

as banks or freight forwarders) for assistance in

translating a letter of inquiry in a foreign language.

Most large cities have commercial translators who translate

for a fee.  Many colleges and universities also provide

translation services.

A typical inquiry asks for product specifications,

information, and price. Some foreign firms want information

on purchasing a product for internal use; others

(distributors and agents) want to sell the product in their

market. A few firms may know a product well enough and want

to place an order. Most inquiries want delivery schedules,

shipping costs, terms, and, in some cases, exclusivity

arrangements.

Regardless of the form such inquiries take, a firm should

establish a policy to deal with them. Here are a few

suggestions:

*    Reply to all correspondents except to those who

obviously will not turn into customers. Do not

disregard the inquiry merely because it contains

grammatical or typographical errors, which may result

from the writer knowing English only as a second

language. Similarly, if the printing quality of the

stationery does not meet usual standards, keep in mind

that printing standards in the correspondent's country

may be different. Despite first impressions, the

inquiry may be from a reputable, well-established

firm.

*    Reply promptly, completely, and clearly. The

correspondent naturally wants to know something about

the U.S. firm before doing business with it. The

letter should introduce the firm sufficiently and

establish it as a reliable supplier. The reply should

provide a short but adequate introduction to the firm,

including bank references and other sources that

confirm reliability. The firm's policy on exports

should be stated, including cost, terms, and delivery.

*    Enclose information on the firm's goods or services.

*    Send the reply airmail. Surface mail can take weeks or

even months, whereas airmail usually takes only days.

If a foreign firm's letter shows both a street address

and a post office box, write to the post office box.

In countries where mail delivery is unreliable, many

firms prefer to have mail sent to the post office box.

*    When speedy communication is called for, send a fax.

Unlike telephone communications, fax may be used

effectively despite differences in time zones and

languages.

*    Set up a file for foreign letters. They may turn into

definite prospects as export business grows. If the

firm has an intermediary handling exports, the

intermediary may use the file.

*    Sometimes an overseas firm requests a pro forma

invoice, which is a quotation in an invoice format. It

is used rarely in domestic business but frequently in

international trade.

SEPARATING THE WHEAT FROM THE CHAFF

How can a firm tell if an overseas inquiry is legitimate

and from an established source? A U.S. company can obtain

more information about a foreign firm making an inquiry by

checking with the following sources of information about

foreign firms:

*    Business libraries. Several publications list and

qualify international firms, including Jane's Major

Companies of Europe, Dun and Bradstreet's Principal

International Business, and many regional and country

directories.

*    International banks. Bankers have access to vast

amounts of information on foreign firms and are

usually very willing to assist corporate customers.

*    Foreign embassies. Foreign embassies are located in

Washington, D.C. (see appendix IV), and some have

consulates in other major cities. The commercial

(business) sections of most foreign embassies have

directories of firms located in their countries.

*    U.S. Department of Commerce. Commerce can provide

information on international firms through its WTDRs,

which are available for a fee through any local

Commerce district office.

*    Sources of credit information. Credit reports on

foreign companies are available from many private

sector sources, including (in the United States) Dun

and Bradstreet and Graydon International. For help in

identifying private sector sources of credit reports,

contact the nearest Commerce district office. Firms

insured by the Foreign Credit Insurance Association

(FCIA) can also obtain help from FCIA's headquarters

in New York City (telephone 212-306-5000).

BUSINESS PRACTICES IN INTERNATIONAL SELLING

Awareness of accepted business practices is paramount to

successful international selling. Because cultures vary,

there is no single code by which to conduct business.

Certain business practices, however, transcend culture

barriers:

*    Answer requests promptly and clearly.

*    Keep promises. The biggest complaint from foreign

importers about U.S. suppliers is failure to ship as

promised. A first order is particularly important

because it shapes a customer's image of a firm as a

dependable or an undependable supplier.

*    Be polite, courteous, and friendly. It is important,

however, to avoid undue familiarity or slang. Some

overseas firms feel that the usual brief U.S. business

letter is lacking in courtesy.

*    Personally sign all letters. Form letters are not

satisfactory.

Before traveling to a new market, the traveler should learn

as much about the culture as possible to avoid embarrassing

situations. For example, in Mexico it is customary to

inquire about a colleague's wife and family, whereas in

many Middle Eastern countries it is taboo.  Patting a U.S.

colleague on the back for congratulations is a common

practice, but in Japan it would be discourteous. Clothes,

expressions, posture, and actions are all important

considerations in conducting international business.

Another important consideration is religious and national

holidays.  Trying to conduct business on the Fourth of July

in the United States would be difficult, if not impossible.

Likewise, different dates have special significance in

various countries. Some countries have long holidays by

U.S. standards, making business difficult. For example,

doing business is difficult in Saudi Arabia during the

month of fasting before the Ramadan religious festival.

Numerous seminars, film series, books, and publications

exist to help the overseas traveler. Try to obtain cultural

information from business colleagues who have been abroad

or have expertise in a particular market. A little research

and observation in cultural behavior can go a long way in

international commerce. Likewise, a lack of sensitivity to

another's customs can stop a deal in its tracks. Foreign

government consulates in U.S. cities offer a wealth of

information on business customs and norms for their

countries.

BUILDING A WORKING RELATIONSHIP

Once a relationship has been established with an overseas

customer, representative, or distributor, it is important

that the exporter work on building and maintaining that

relationship. Common courtesy should dictate business

activity. By following the points outlined in this chapter,

a U.S. firm can present itself well. Beyond these points,

the exporter should keep in mind that a foreign contact

should be treated and served like a domestic contact. For

example, the U.S. company should keep customers and

contacts notified of all changes, including price,

personnel, address, and phone numbers.

Because of distance, a contact can "age" quickly and cease

to be useful unless communication is maintained. For many

companies, this means monthly or quarterly visits to

customers or distributors. This level of service, although

not absolutely necessary, ensures that both the company and

the product maintain high visibility in the marketplace. If

the U.S. exporting firm cannot afford such frequent travel,

it may use fax, telex, and telephone to keep the working

relationship active and up to date.