Mastering International Trade: A Foreign Trade Guide

In theThe field requires a wide and detailed knowledge base and is a typical multi - faceted profession.For newbies in foreign trade,being familiar with and mastering this knowledge can not only help them quickly integrate into the industry but also avoid detours in their career.The following details the basic knowledge that should be possessed in doing foreign trade from several aspects such as functional departments,settlement methods,business development,and actual operations.

I.Main functional departments involved in foreign trade

The smooth progress of foreign trade work is inseparable from close cooperation with multiple departments.The following are common relevant departments and their main responsibilities:

• Freightforwarder:Arrangethetransportationofgoods,including,landtransportation,etc.Provideservicessuchasbookingshippingspaceandcontainerloading.
• CustomsBroker:Assistinpreparingcustomsdeclarationmaterialsandcomplete.Ensurethatgoodscomplywiththecustomsrequirementsoftheexportingandimportingcountries.
• StateAdministrationofForeignExchange:Controlinternationalsettlementandforeignexchangecirculation.Payattentiontotheforeignexchangeverificationofforeigntradeenterprises.
• TaxBureau:Enterpriseapplication.Ensuretaxcomplianceofexportenterprises.
• Time-limitrequirements:Handleinternationalsettlementbusiness,suchasopening,collectionandTTpayment.Providefinancingservices,suchasexportcreditinsuranceandperformanceguarantee.
• Customs:Inspectgoods,checkcustomsdeclarationmaterials.Reviewcompliancewithrelevantlawsandregulations.
• ChinaCouncilforthePromotionofInternationalTrade:IssueCertificateofOrigin(CO),commercialcertificationandotherdocuments.
• Entry-ExitInspectionandQuarantineBureau:Inspectthequalityofgoodsandissuerelevantcertificatesofconformity.
• Sinosure(ChinaExport&CreditInsuranceCorporation):Provideexportcreditinsurancetoreducetraderisks.
• MarineInsuranceCompany:Underwritetheriskoflossofgoodsduringtransportation.

II.Common international settlement methods

The choice of foreign trade settlement methods directly affects the security of transactions and the cash flow management of enterprises.The following are common settlement methods and their characteristics:

• Pre-TT(TelegraphicTransfer)
  • Arrangeproductionorshipmentafterreceivingtheadvancepaymentfromthecustomer.
  • Lowrisk,suitableforcustomerswithinsufficientcredit.
• Final payment against bill of lading (DP at Sight)
  • Thecustomerpaysafterthebillofladingispresented.
  • Balancestherisksofboththebuyerandtheseller,butthereisacertainriskofoverstockingfortheseller.
• Letter of Credit (LC)
  • Issuedbyabanktoguaranteethepaymentbythebuyer.
  • Highsecurity,butcomplexoperation,suitableforlargeorders.
• Usance LC
  • Thecustomerpaysafterthespecifiedperiod.
  • Suitableforcustomerswithhighrequirementsforcapitalturnover.
• OA (Open Account)
  • Thecustomerpayswithinthecreditperiodafterthesellershipsthegoods.
  • Highrisk,andexportcreditinsuranceisneededtoreducetheprobabilityofbaddebts.
• DP (Documents Against Payment)
  • Thebankdeliversthedocumentsonbehalfoftheseller,andthebuyerobtainsthedocumentsafterpayment.
  • Requireshighcapitalfromthebuyer,suitableforcustomerswithgoodreputation.
• Bank Performance Guarantee
  • Thebankprovidesperformanceguaranteeforthebuyer.
  • Enhancesthetrustofthetransactionandreducestheriskofdefault.

III.Knowledge points that foreign trade service companies need to master

• Documentpreparation:Commercialinvoice,packinglist,billoflading,certificateoforigin,etc.:Payattentiontothecorrectnessofthedocumentformatandtheintegrityofthecontent.
• ExportTaxRebatePolicy:Befamiliarwiththetaxrebatedeclarationprocessandrelevanttaxrates.
• Conductpre-shipmentinspection(ChinaCertification&InspectionGroup)“Flexiblychoosetheappropriatetransportationmethodaccordingtothecustomersneeds.:Confirmthetransportationandcustomsclearancerequirementsofthedestinationcountryinadvance.
• Legalcompliance:Complywiththeimportlawsofthedestinationcountry,suchasproductcertification,environmentalprotectionrequirements,etc.Ensurethecompletenessofcontracttermsandpreventlegalrisks.

IV.Skills of foreign trade salesmen

Foreign trade salesmen not only need to have basic industry knowledge,but also need to have some exposure to the following fields:

• BusinessDevelopment
  • BefamiliarwithonlineB2Bplatforms(suchasAlibaba.com)andofflineexhibitionsandotherchannels.
  • Developcustomersthroughemailmarketing,socialmediasuchasLinkedIn.
• Product Knowledge
  • Understandthecharacteristics,applicationfields,andmarketdemandsofthecompanysproducts.
  • Beabletoquicklyanswercustomerstechnicalquestions.
• Negotiation Skills
  • Masterpricenegotiationtechniquesandavoidcustomersexcessivepricepressure.
  • Flexiblyrespondtothenegotiationofpaymenttermsanddeliverytime.
• Customer Management
  • Managecustomerscategorically,distinguishingkeycustomersfromordinarycustomers.
  • Maintainlong-termcustomerrelationshipsandincreasetherepurchaserate.

V.Suggestions for successful foreign trade employees

• ContinuousLearning
  • Befamiliarwiththelatestinternationaltraderegulationsandpolicychangesinthedestinationcountry.
  • Participateinforeigntradetrainingtoimproveprofessionalquality.
• Good Communication Skills
  • Maintaineffectivecommunicationwithcustomersandsolveproblemsinatimelymanner.
  • Demonstrateclearexpressionabilitywhencollaboratingwithcross-departments.
• Risk Control
  • Clarifydefaultclausesandliabilityforcompensationwhensigningcontracts.
  • Forhigh-riskcustomers,besuretopurchasecreditinsuranceinadvance.
• Attention to Details
  • Ensuretheconsistencyofdocumentstoavoidcustomsclearancedelays.
  • Regularlycheckthecargostatuswithcustomerstoreducemisunderstandings.