How to Qualify International Buyers
Exporting successfully really comes down to this: minimizing risk. How can an exporter minimize risk when a buyer is thousand of miles away, speaks another language, and comes from a different culture? In the early stages of the negotiation process, a seller must properly screen the buyer. This is easily accomplished and is a similar process to screening a domestic customer. If your company has a website, chances are you are receiving requests for quotations. Preparing quotes takes up time, and in many circumstances, are not going to a qualified, legitimate buyer.
Here is a list of questions that should be reviewed and asked of any prospect. This will also help with compliance – you should “know your customer” and part of compliance is to know who the customer is and what the end-use of the product will be. You can post these questions on your website. send by email, or have a representative call and ask them outright. If your buyer is serious, they will take the time to answer.
1. Company information. What is the company name? Who is the representative and what is their title? Other contact information – website, email, and physical address (if this is not possible, ask for the longitude/latitude) and phone.
2. Business activity. What type of business is this? A supplier, wholesaler, distributor, retailer, or agent?
3. Corporate information. Is this a registered corporation? Who are the Board of Directors? The owner? Financials – annual revenue.
4. Markets. Where do they sell to? Do they have a physical presence in an additional country?
5. Customers. Ask for a business reference (one that is able to be verified). If the prospect is a distributor, ask about similar products they may represent.
6. Financial verification. Ask for a bank reference. There are many companies that offer foreign buyer verification services.
If the prospect has taken the time to provide you with all the requested information, you can assume that they are a serious buyer. The Department of Commerce offers an International Company Profile for a fee. This detailed report will be prepared by the Foreign Service Officer in the country of the customer. This report will provide you with detailed information, including reputation, financials, and general background information. Fees vary. Additionally, the Export Import Bank of the U.S. offers a foreign buyers insurance programs. U.S.-businesses can make up to 20 applications a year free of charge. These insurance policies allow you to check the credit worthiness of the foreign buyer, and take a policy against default if you sell on open account.
The best way to minimize any risk is to ensure that you are educated and prepared to do business across borders. We can help you in all areas of import and export. Contact us to learn more about how you can successfully export or start your own import export business.