This unit tries to present a general picture and a brief introduction to export and import trades for the purpose of clarifying their complicated procedures.
2.1 Procedures of Export and Import Transaction
An export or import business is so complicated that it may take quite a long time to conclude a transaction. Varied and complicated procedures have to be gone through in the course of export or import transaction. From the very beginning to the end of the transaction, the whole operation generally undergoes four stages: preparing for exporting or importing, business negotiation, implementing the contract, and settlement of disputes(if any). Each stage covers some specific steps. Since the export and import trades are two sides of the same coin, and one country’s export is another country’s import, hence, we will take the procedures of export transaction in the following diagram to illustrate the general procedures of export and import transaction. Before proceeding to the following units, we’d better keep this general picture in mind.
The most difficult part of exporting is taking the first step. Any exporter who wants to sell his products in a foreign country or countries must first conduct a lot of market research. Market research is a process of conducting research into a specific market for a particular product. Export market research, in particular, is a study of a given market abroad to determine the needs of that market and the methods by which the products can be supplied. The exporter needs to know which foreign companies are likely to use his products or might be interested in marketing and distributing the products in their country. He must think whether there is a poten
1) Research on the countries or regions
Countries or regions with different political and economic systems hold quite different attitude toward foreign trade business. The exporter should investigate their political, financial and economic conditions; their policies, laws and regulations governing foreign trade, foreign exchange control. Customs tariffs and commercial practices; their foreign trade situation (the structure, quantity, volume of exporting and importing commodities, trading partners and trade restrictions,etc.)
2) Research on the market
A research should also be conducted about the production, consumption, price and its trend, the major importing or exporting countries of a particular commodity in order to fix the right price of exporting commodities and properly handle other business terms.
3) Research on the customer
In international trade, credit information is of greater importance than in home trade. The exporter should know what kind of reputation the buyer or importer has, the approximate size of his business, how he pays his accounts and information about his trade activities. Obviously, customers with sound reputation and good financial standing will facilitate the export trade. The exporter can obtain this information from various sources such as references given by the buyer, his bank, various trade associations and enquiry agencies. In this way, the potential customers can be identified.
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