Module 9-: As an exporter, you will be doing business with people in foreign countries—people who share certain common interests with you, but also share conflicting interests with you due to their different cultural backgrounds. Yet, you have to communicate effectively with these people and foster a relationship that will result in a “win-win” for you and them. This is why negotiation is an integral aspect of the export business and an art that must be mastered by every exporter.
The success of your export business hinges largely on your ability to negotiate effectively with buyers, since they can only do business with you if they agree to your terms and conditions and you agree to theirs as well. And remember, you will have to go through negotiation with any buyer you intend dealing with. With the above in mind, let’s now discuss how you can become a good negotiator as an exporter.
How to Negotiate with Prospective Buyers as an Exporter
- Preparation matters most
To be able to negotiate effectively with potential buyers, you must prepare your mind for it. However, you must bear in mind that every prospective buyer you meet will disagree with some of your terms and conditions, and you will disagree with some of theirs, too. The earlier you come to terms with this reality, the better for your business.
After developing the “there will always be need for negotiations” mindset, your next step is to understand your target audience better. Though this will require spending some time and effort on research, the results will be well worth it.
The more you know about your target audience, the better you will understand them as well as their business etiquettes, preferences, and concerns. And with this knowledge and understanding, you will be able to predict what they will likely want to negotiate about. This will, in turn, help you figure out how best to negotiate with them in order to get positive results.
To understand your target foreign audience, you might want to start with reading up about the particular country on websites such as CountryHelp.com or by doing a more specific web search for information about the country. Read about the people of that country, the business climate in the country, the products and services in huge demand, the regulations regarding import commodities, business-related government policies, and other information that is relevant to you as an exporter.
Alternatively, you can call the local Embassy of the country you are planning to export to, and find out if they have a business library. If they have one, visit the library and browse through some of the magazine and newspapers to get a feel for what is happening in the country’s business arena.
In addition, if the local Embassy of that country has a trade section, meet with the trade representative and ask questions about the business climate in the country. Also, ask for some guidance on how to do business in their country and what social practices and courtesies you should follow. This way, you would be able to get valuable information and feedback.
What are the keys to successful negotiation?
There is much more to negotiation effectively than preparing your mind for it. There are other ingredients of a successful negotiation, and they are highlighted below:
- Know the outcome you want. Most of the time, your goal will be to sell your export product to the potential buyer or establish a connection with them that could evolve into a business relationship.
- Know your position. Have all your facts at your fingertips, and know your limits. A recipe for failure is to have no set limits to which you can compromise during negotiations.
- Understand the potential buyer’s position. This can only happen if you put yourself in their shoes (and you won’t be able to put yourself in their shoes unless you understand their business and country–through research).
- Work out different scenarios ahead of time. Prepare for every likely request that the potential buyer might want to make. This will help you remain confident throughout the customer’s approach, since you won’t be caught unawares by any terms or conditions presented by the buyer.
- Understand your strengths and weaknesses and be open about them. Honesty boosts credibility.
- Back up all your positions with logic and facts. Don’t negotiate based on emotions. If you do, you will most likely get badly burned.
- Have an exit strategy. Know when you will get out of the negotiation. Don’t be of the “it must work at all cost” mindset. Desperation sends wrong signals about you and your business.