CHAPTER 9

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 (see
     chapter 10), 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 (see chapter 7), which are
     available for a fee through any local Commerce district office (see
     appendix III).

*    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 (see
chapter 8). 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