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59. What issues are discussed with agents and distributors?

With agents and distributors there will be many issues to discuss and negotiate on an ongoing basis. These include:

  • which products are to be sold

  • prices in the foreign market

  • performance targets

  • payment of local marketing costs

  • transportation (taking into account speed, cost, security and efficiency)

  • getting paid (cash in advance, letters of credit, bill of exchange, open account, etc.).

60. What methods of payment in international trade do you know?

1.Advance payment

Payment is expected by the exporter, in full, before goods are shipped.

2.Letters of credit, also known as a documentary credits

Documentary credit is a bank-to-bank commitment of payment-the buyer’s bank guarantees that payment will be made when the shipping documents are found to be in compliance with terms set by the buyer.

3.Bills for collection

A bill of exchange is sent from the exporter’s bank to the buyer’s bank. When the buyer agrees to pay on a certain date, the sign the draft.The documents and goods are released to the buyer against this accepatance.

4.Open account

Goods are shipped directly to the buyer, with a request for payment.

61. What difficulties of selling products are there in overseas markets ?

Exporting can bring you lots of benefits. However, there are also disadvantages.

Firstly, you will need a great amount information about foreign market before starting to export.(difficult to collect and requires a lot of time).

Money(if you decide to work with an agent-he will take a high commission)

It’s risky, because each market has its features, and you have no guarantee that your product will suit the foreign market.For ex, if you have to change packaging of the product-you will also need time and money.

Competitors products which are already in the market can be more attractive for customers.

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