Selecting And Qualifying The Trade Term
When a trade term is selected for the purpose of quotation, it will not necessarily be the term that will apply to the actual transaction at the time of shipment to the buyer. For example, a quotation made "Ex-Works, Nashville, Tennessee," requires that the buyer arrange for all transportation, and take all risk of loss from your dock. On the other hand, when the actual transaction takes place, the seller will most probably take responsibility for arranging for transportation, and assume risk of loss until the goods are accepted by the buyer at destination. This will automatically change the trade term to be applied to the transaction.

Establish The Ex-Works Price Of The Product
An Ex-Works price should be established for the product being sold, that can be universally used for all international transactions. In addition, a procedure for discounting the established price should be considered before any quotations are made. For example, if a standard retail price of a unit were $100, discounts can be established for volume, distributor's commission and promotional incentives that could easily discount the price by up to 35%. The two most important factors that will be encountered will be custom's officials in the foreign country who will determine if you are declaring a reasonable declared value, and independent inspection agencies who will want to determine if you are inflating the value for the purpose of assisting the buyer in converting their currency to U.S. dollars in countries that prohibit this practice.

Also, when establishing a product price, research should be accomplished to determine a competitive price in world markets. When comparing the competitive price, costs in addition to the Ex-works price should be considered. This would include, but not limited to, export boxing, inland and international transportation, import brokers fees, duties, taxes, and other costs incidental to transportation and clearing the goods for import into the foreign country.

Determine The Validity Period Of The Quotation
When dealing in most of the industrial world and selling an off the shelf product, a reasonable validity period for a quotation is 90 days. If a product is being sold in a country that imposes currency or quota restrictions, it may be necessary to extend the validity period to 180 days. Specific care should be exercised when transportation is included in the quotation. Be sure that the cost for transportation will be valid for the period of the quotation. For instance, transportation rates to the pacific rim will increase at an alarming rate until the year 2000. This is due to the imbalance of imports verses exports caused by the financial difficulties in those countries.

Projecting The Number Of Days Before Shipment
It is particularly important, when using payment methods such as cash in advance and letter of credit, that you establish the number of days after receipt of purchase order, import permits and other required documents, and an acceptable letter of credit, that you will ship the goods. This is so that the buyer can project how long their credit line or cash flow will be tied up before they have the opportunity to consume or resell the goods, collect their receivable, and replace their available credit line or cash paid in advance. This is also important when the product is part of another product that is being sold by the buyer, therefore delaying a larger sale that will be very important to the profitability of the buyer.

Research Country Requirements
Although most of the major markets in developed countries do not have restrictions regarding a quotation, it is best to review these requirements in advance of making a quotation. Most of the unusual requirements will come from countries that are located around the Equator which will give you a pointer when you receive a request for quotation. Also, some countries have specific requirements as to origin of the products, and specific restrictions against products produced in countries where they have disputes of one nature or another. For example, the U.S. has boycotts and quotas for some countries and some products.

U.S. Government Export Restrictions
In addition to being concerned about payment and foreign country restrictions, the U.S. government has specific restrictions about exports which fall into three major categories; buyers that have been prohibited from purchasing U.S. products, anti-boycott regulations restricting U.S. companies from participation in contributing to boycotts of countries with whom the U.S. has friendly relations, and restrictions against the export of certain products subject to the requirement of export licenses for each transaction. These products generally fall into the categories of national security, high technology, implements of war, precious metals, products used in nuclear applications, and end use.

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