In a previous article, I outlined 15 steps an exporter should follow when responding to an international sales inquiry. These steps help ensure you respond with a sales proposal, quote or proforma invoice that will maximize your chance of a successful export transaction.
In this article, I discuss two of those steps in more depth.
The Importance of an Expiration Date
Make sure your sales proposal or proforma invoice includes a statement that clearly states that both the price and terms of your offer are valid for a given period, such as 60 days. Be sure to state when that time period begins. I recommend using the date of the proposal as the beginning of the validity period.
One company I work with did not state when the period began, and the customer negotiated the period from the time they actually received the hard copy of the proposal. Because of slow mail delivery in the customer’s country, that meant that the 60-day period began five weeks after the date of the sales proposal. In this case, the export company honored the original pricing and terms even though they had implemented a small price increase.
Here’s a sample statement: “The price and terms of this offer are valid for 60 days from date of this proposal.” (For examples in this article, I arbitrarily use the number “60.” You should, of course, use the number that applies to your own unique situation.)
Carefully Choose Your Words
Be careful with this one, especially if you sell a customized or assembled product that relies on securing specified ingredients or components from outside your company.
Here’s a sample statement: “The product(s) based on this proposal are available for shipment 60 days from receipt and acknowledgement of your written order and verification of acceptable financing.” (I underlined four words in this statement for emphasis of explanation; do not underline the words in your actual proposal.)
Using the word “available” means that you will do just that; you will make your product accessible as promised to be ready for shipment. If you state that it will be shipped rather than made available to be shipped by a certain date, then you will not provide yourself any protection if something goes wrong outside your control.
For example, if you make your product available for shipment and there is a dock strike, then you have still performed and kept your promise. You made it available even though it cannot be shipped due to reasons beyond your control.
Beware of using the word “delivery;" instead use the work “shipment.” If your vendor states the product is ready for delivery in 60 days, then you should expect your order to arrive within 60 days of placing your order.
Many exporters use receipt of the order to begin the production process; however, it is a good idea to add the word “acknowledgement.” This allows you to correct an order that doesn't accurately reflect the precise wording of your initial proposal.
For example, if you offer 120 volts and the order calls for 240 volts, you can go back to the customer and correct this and begin the promised “availability” date from the acknowledgement date. Furthermore, if 240 volts costs your company more that 120 volts, then you have a reason to negotiate a higher selling price to cover your added costs.
In some cases where the order value is high, a foreign exchange license is needed, government funding is required, or you are selling a customized one-of-kind product such as uniquely designed factory automation machinery, you may wish to add the word “verification” of acceptable financing.
You cannot anticipate nor cover all contingencies in the sales offer or proforma invoice, but the better you are at making clear concise statements, the more likely your export sale will go smoothly.
This post was originally published in June 2003 and has been updated to include current information, links and formatting.