General Operation of Export Sales Operation
General Operation of Export Sales Operation
The general operating rules and principles to be followed in export sales operations should be determined and operations should be carried out accordingly. If the company does not already have such a set of rules and principles, it would be appropriate for the foreign trade manager to establish these rules and have them approved by the company management. Otherwise, it is likely that he will be held responsible for the problems that may arise in the future as the person in charge.
The lack of a systematic approach to export sales by most small and medium-sized companies poses a problem for young professionals who start working in these companies. For this reason, in this article, we have prepared various information about how export sales operation works, with the thought that it will be useful for friends who have just started their foreign trade profession.
Foreign Trade Stages
Let's imagine that we are a foreign trade/export manager in a medium-sized manufacturer company. Let's make FCA our general delivery method in export sales, and let's model the general operation over an existing customer who makes regular purchases.
Our client passes his order and asks us to send a Proforma Invoice, also asking for a delivery date. Customers often want the Packing List together with Proforma Invoice, especially on their first purchase. Thus, they can plan the transportation organization and calculate the costs of their imports.
We send this incoming order to production by entering all the details in the Order Form, but without a production instruction, that is, without approval. Thus, the production department takes this possible order into account when making its own production plan and gives us a delivery date. (In order to avoid confusion, the Order Form we send without approval can be called the Order Information Form, and when the order is confirmed, we can also call it the Order Form.)
In accordance with the order, a Proforma Invoice containing all important details such as product, quantity, amount, delivery method, payment method, bank account information and Packing List containing the packaging information is sent to the customer, notifying the delivery date, and prompting the customer to approve the Proforma. we want. If he approves, we usually request a prepayment if we have agreed on the form of payment in advance. The logic of prepayment is to reduce both our financial burden as a manufacturer and the risk that the buyer will stop buying the product. If our product comes to a single standard that we can sell to every market, or if there are very long delivery times, it is reasonable not to keep the prepayment amount high.
Let's say we're going to ask our customer to make a 50% down payment. As the export manager, we should not pass production instructions to our production department before this payment is made. Because, even if the buyer has approved Proforma Invoice, the sale should not be considered final without receiving the prepayment. The export manager should not put himself in the situation of passing the production instruction of a sale that does not yet exist, to the factory.
If we are working with our customer without prepayment (in which case there must be a contract between us), then we should ask the buyer to confirm the order and write a statement on the Proforma that he accepts the terms, fax it to us with an authorized signature and stamp or send it to us via email. In this case, it would be appropriate to write the specified payment date of the order to the Proforma and to reference the relevant sales or distributorship contract.