Unit Six

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Unit Six

• International Trade

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Study Objectives

• This unit deals with the following situations
  connected with importing and exporting goods
• ? making and answering enquires
• ? placing, acknowledging and filling orders
• ? the functions of asking for and giving
  information are also covered

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What are the basic procedures to be followed if a
contract is to be signed in any business
transaction?
Enquiry ?????
Contract ??
Offer ??/??
Counter-offer ?????
Acceptance ??
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6.1 Exchanging information

• This section covers the functions of asking for
  and giving information or apologizing for not
  being able to give the required information.
• We also emphasize the importance of an
  appropriately friendly and helpful tone of voice.

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Step A

• This step looks at the importance of creating a
  good impression.
• Youll hear TWO versions of this conversation.
• Decide which of these words describe the
  IMPRESSION the two men give in each version of
  the conversion.
• Please identify how each speaker makes himself
  sound nice in the second version.
• 1) their tone of voice 2) the way they
  hesitate 3) the polite forms they use

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Step D

• When youre giving someone an important piece of
  information, its best to follow this rule Speak
  clearly and slowly!
• Youll hear various people asking for
  information---and all of them speak unclearly or
  quickly. Decide what each person wants to know
  and choose the correct alternative in your books.
• The emphasis is on listening carefully and
  concentrating.

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6.2 Making enquiries

• Whether you are a retailer or a manufacturer, it
  is crucial for you to find some proper suppliers,
  so you have to send out enquiries (???).
• An enquiry is aimed at 1) collecting information,
  2) giving off information.

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• What is the information to be collected?
• Generally, the information covers What, When and
  How the supplier can do.
• What refers to the type of product and service,
  When the terms of delivery, How the rate of
  discount, the terms of payment and guarantee.
• What is the information to be given off?
• In most cases, it may cover the enquiry-makers
  general information-in what business line,
  headquarters location, present operation, and
  its readiness to establish a certain relation
  with the supplier-would-be.

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• Kenneth Beare2520 Visita AvenueOlympia, WA
  98501
• Jackson Brothers3487 23rd StreetNew York, NY
  12009
•  September 12, 2000
•  Dear Sirs,
• I am writing to make an enquiry on 100 cotton
  cloth, color No. 12, standard width 200 yards.
• We also would like to make sure if you can make
  the delivery of the above in two weeks and if you
  could, what the quote (CIF) is like.
• I look forward to your quotation soon.
•  Yours faithfully,  
• Kenneth Beare
•  Kenneth BeareAdministrative Director

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• Dear Sir/Madame,
• We are writing for your latest catalogue and
  price list regarding your office furniture.
• We are in the business of sales of office
  equipment and facilities and, base in Busan, we
  have developed markets in Asia and Europe. You
  have been recommended to us by the Tops List, a
  trade journal, and we are interested in your
  products. As we would like to expand our
  operation, it is essential that our suppliers be
  both competitive in terms of price and reliable
  in quality.
• We will be interested in discussing terms with
  you after the final decision has been made, but
  can you let us know what discount you would offer
  on bulk purchase in priority?
• Looking forwarding to hearing from you.
• Yours sincerely,

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Tips for Enquiry Letters Writing

• State what kind of information is needed at the
  very beginning of the letter in a direct way.
• The information should not be merely about the
  product or service, the packaging, size,
  delivery, payment and after-sales service terms
  are also included.
• End the enquiry with a hope for the other sides
  prompt reply.

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Step A

• You and your partner have just joined the Buying
  Department of BROADWAY AUTOS. You are Mr.
  Norths assistance.
• Imagine youve just come into Mr. Norths office
  and hes on the phone. Make notes on the call and
  guess what Fritz is saying to Mr. North during
  the call.
• Decide what to tell Mr. North when he returns to
  the office.
• Youll probably decide to tell him that it may be
  risky continuing to depend on Arcolite. Finding
  alternative suppliers might be wise.

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Broadway Autos
Arcolite (sole supplier)
New Supplier (you---newspaper)
Enquiry Letter (boss-Mr. North)
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Step C

• Homework
• Draft a short letter explaining your
  requirements to other battery companies.
• Your letter should be written in a more formal,
  impersonal style than Mr. Norths.

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6.3 Answering enquiries

• It is very important to make a good impression
  when responding to enquiries from potential
  customers.
• Of course, the best impression will be made by
  providing the materials or information that the
  perspective client has asked for, this positive
  impression will be improved by a well written
  response.

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• The response to an enquiry is either a confirmed
  reply (????) or a quote (??).
• In replying, one should first confirm having
  received the other sides enquiry, then the
  solution made in reply?an enclosed catalogue and
  price list, or a quote, and may be with a
  discount offer.
• If it happens that you cant meet the enquiry, a
  declining should be made in a very polite way.

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• Dear Mr. Kim,
• Thank you for the letter dated on March 24 and we
  are very happy that you are interested in our
  products.
• Enclosed please find the latest catalogue and the
  price list.
• The rate of discount is made on the size of the
  order and the payment is also taken into
  consideration. Anyhow, for an order of 50 pieces
  of one product a favorable discount is 5.
• We are sure that our products will appeal your
  clients of upper market buyers.
• We look forward to an order from you.
• Yours sincerely,

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Step A

• Step A is preparatory to the integrated activity.
• You and your partner work in the export
  department of AntiSpy Products. Its your job to
  answer enquiries about your products.
• The document is the current stock position. You
  will need to refer to this as you do the activity
  because youll have to check on the availability
  of the products you are asked about.

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Step B

• Using the information given in the advertisement
  and the printout in A, draft repliers to
  Enquiries 1 and 2.
• To answer the enquires, you will need to look at
  the inventory position in A3.

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Model letters (Enquiry 1)

• Dear Mr. Hanson,
• Thank you very much for you enquiry about
  AntiSpy Products.
• As you requested we are sending you our
  latest catalog of security products. We have
  debited your American Express card 667589980
  for the sum of 50 US. This 50 will be
  discounted from your first purchase from the
  catalog.
• Do please get in touch with me if you have
  any queries about any of our products which are
  not covered in the catalog.
• Sincerely,

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• Enquiry 2
• Dear Mr. Perez,
• Thank you very much for your enquiry about
  AntiSpy Products.
• I am pleased to inform you that we do supply a
  portable listening device detector the AntiSpyTM
  CJ 4000P is a battery-driven device which will
  detect any eavesdropping devices within 20 feet.
  It is very compact, looks like a Walkman and
  costs only 359. For an order of five or more
  items we are happy to offer you a rebate of 20,
  making the price per item 287.20. All our prices
  include shipping by air. I can also confirm that
  this product is available from stock at this
  time.
• If you would like to see a copy of our complete
  120pp catalog this is available for 50---which
  if refundable when you place an order. However,
  if you decide to order one of our CJ 4000Ps a
  free catalog will be included with your order.
• Sincerely yours,

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Step C

• This step involves answering Enquiries 3 and 4
  by letter, e-mail or fax.
• The recorded call requires you to alter the stock
  position printout in A3.
• The phone call also provides a MODEL for
  answering the enquiries on the phone in step
  D---though the tone may be rather to effusive for
  some peoples tastes!

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• Enquiry 3
• Dear Mr. Graham,
• Thank you very much for you enquiry about AntiSpy
  Products.
• We do carry a telephone scrambler the LR 44
  Octopus Telephone Scrambler. The price for this
  is 299 including shipping by air.
• I can confirm that this product is suitable for
  both tone dial and pulse dial and will adjust
  automatically to any mains voltage from 100 to
  250 volts.
• We have only one of these items available at this
  time but will have full stocks from August 15.
• Please let me know by fax today if you would like
  to purchase one at this time---I have reserved
  our one remaining LR 44 for you for 24 hours.
  Please note that you would need an import license
  for this product.
• If you would like to see a copy of our complete
  120 page catalog this is available for 50---
  which if refundable when you place an order.
  However, if you decide to order one of our LR44s
  a free catalog will be included with your order.
• Sincerely,

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• Enquiry 4
• Dear Mr. Ovambo,
• Thank you very much for your enquiry about
  AntiSpy Produccts.
• I regret that we are unable to supply our Screen
  Protector at this time. This is because of the
  import restrictions into Nigeria which are
  currently in force.
• However, our former distributors may still have
  stocks and I suggest you contact them. They are
  Kano Security, Independence Square, Kano.
• Do please contact me if you have any further
  enquiries about our products.
• Sincerely yours,

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6.4 Placing and filling orders

• This section covers the stages of dealing with an
  export order, with each step corresponding to a
  different date in the process. Additional
  information for each step is provided in the
  Files at the appropriate time.
• Each step involves deciding what to do and then
  writing a fax or letter.
• The purpose of this activity is to revise the
  writing of faxes by reading faxes and responding
  to them in kind.

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• Generally speaking, after terms of business are
  set, the purchasing side places an order
  .Furthermore, an order form filled out is not
  enough, and a confirming letter usually goes with
  the order from the purchasing side, as one can
  not be too careful in business.
• On the other side, after an order is placed, the
  purchasing side usually expects an
  acknowledgement from the supplier as to make sure
  that no mix-up occurs for the order and delivery.
  The acknowledgement usually covers the order
  number, the ordered items, the price and
  discount, the payment settled and the terms of
  delivery.

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order form, confirming letter
purchasing side
the supplier
acknowledgement
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Water Sportware, 12 Chandos St., St Lenoards, NSW Australis Order No. AB 2371 Mr. Peter Sung Del Mar Sporting Ltd 181 Tras Street 07-177 Singapore 0207 10 September 2006 Water Sportware, 12 Chandos St., St Lenoards, NSW Australis Order No. AB 2371 Mr. Peter Sung Del Mar Sporting Ltd 181 Tras Street 07-177 Singapore 0207 10 September 2006 Water Sportware, 12 Chandos St., St Lenoards, NSW Australis Order No. AB 2371 Mr. Peter Sung Del Mar Sporting Ltd 181 Tras Street 07-177 Singapore 0207 10 September 2006 Water Sportware, 12 Chandos St., St Lenoards, NSW Australis Order No. AB 2371 Mr. Peter Sung Del Mar Sporting Ltd 181 Tras Street 07-177 Singapore 0207 10 September 2006
Quantity Description of Goods Unit Price Total
100 100 Rucksacks RS 101 Travel bags TB51 _at_ 399 _at_ 199 39,900 19,900
Total amount Total amount Total amount 59,800
Comments 10 discount Authorized by Colin Hirst (Colin Hirst) Tel [phone] Fax [phone] Comments 10 discount Authorized by Colin Hirst (Colin Hirst) Tel [phone] Fax [phone] Comments 10 discount Authorized by Colin Hirst (Colin Hirst) Tel [phone] Fax [phone] Comments 10 discount Authorized by Colin Hirst (Colin Hirst) Tel [phone] Fax [phone]
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• Water Sportware
• 12 Chandos St.,
• St Lenoards
• NSW Australis
• Mr. Peter Sung
• Del Mar Sporting Ltd
• 181 Tras Street 07-177
• Singapore 0207
• Dear Mr. Sung,
• We enclose our order No. AB 2371 for the
  following
• 100 Rucksacks RS 101 _at_ 399
• 100 Travel bags TB51 _at_ 199
• We would like to confirm that payment is by
  letter of credit. Thank you for the quantity
  discount of 10.
• We would appreciate delivery within the next six
  weeks and look forward to receiving your
  acknowledgement.
• Yours sincerely,

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• Del Mar Sporting Ltd
• 181 Tras Street 07-177
• Singapore 0207
• Mr. Colin Hirst
• Water Sportware
• 12 Chandos St.,
• St Lenoards
• NSW Australis
  
  10 September, 2006
• Ref on the order No. AB 2317
• Dear Mr. Hirst,
• Thanks for the order No. AB 2317 placed by you.
• The items ordered are
• 1) 100 Rucksacks RS 101 _at_ 399
• 2) 100 Travel bags TB51 _at_ 199
• A favorite discount of 10 is for the size of the
  order, so the total amounts up to 59,800.
• As this is our first trade we would appreciate
  that payment is by letter of credit.
• As required, we shall make the delivery before 22
  October, 2006, within the six weeks after the
  date of your order placed.

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Step A

• The draft fax contains some errors. First you
  should spot the errors and correct them.
• 179,800 (in words one seven nine thousand eight
  hundred)
• each PB 5000 for export in a 40-foot open top
  container
• and valid for 90 (ninety) days from the date of
  your order
• Mr. Richardson sends his best regards

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Step B

• Model Fax
• To Alpha Marine
• From SunWorld Powerboats
• We wish to order TWO of your stainless steel
  anchors
• Product Number 3456 120kg stainless steel
  anchor at a price of 135 including delivery.
• Please confirm by return that these are
  available from stock and let us know when we can
  expect delivery.
• Yours sincerely,

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Step C

• File 46 contains a fax from Alpha marine,
  answering the fax from step B, and a fax from the
  freight forwarders.
• Proforma invoice ????
• ??????????(P/I)?????????????,?????????????????????
  ???????,??????????????????????????????????????,???
  ????????
• ????????????,?????????,???????,??????????????????,
  ???????????,??????????????,?????????????????

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Model fax

• Dear Mr. A__,
• Thank you very much for your order for two PB
  5000 vessels with stainless steel anchors. I can
  confirm that the total price for the two vessels
  will be 187,850 CIF, as stated in our quotation
  number 0067. This sum is payable by irrevocable
  letter of Credit confirmed on a T__ bank and
  valid for 90 (ninety) days from the date of your
  order.
• I can confirm that the two vessels will be
  shipped in 40-foot open top containers from our
  factory on 23 August. Passage has been reserved
  on m/v Caribbean Star to Puerto Limon where the
  containers will be unloaded on 10 or 11
  September.
• A proforma invoice is being sent to you by
  airmail today.
• Again, thank you for your order. If you have
  any queries please contact me.
• Yours sincerely,

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Model covering letter

• Dear Mr. A___,
• I enclose a proforma invoice for your order
  for two PB 5000 30-foot Sun Voyager vessels.
• If you have any further queries about the
  vessels, their specification and the delivery
  date, please get in touch with me at any time by
  fax or phone.
• It is a great pleasure to be doing business
  with you.
• Yours sincerely,

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Step D

• Shipwreck? Disaster? File 71 contains reassuring
  news in a fax from Costa Rica, which must be
  replied to--- probably again with both an
  immediate fax and a covering letter.

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Step E

• File 22 contains instructions from Mr. Richardson
  to send a follow-up letter.

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Step F

• As its nearly Christmas and it seems a good idea
  to maintain the excellent, friendly relationship
  with Naves Limon, you can send a seasonal fax!

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Step G

• File 52 contains a reply to the fax sent in step
  F. Naves Limon want to be the agents in Central
  America---is this a good idea?

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• Quote sb. a price for sth. ???
• Please quote us your price on CIF New York basis
  for the article A40.
• ?????A40????????
• Please quote (us) your lowest price CIF London.
• ????CIF??????

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• When quoting a price in international trade, you
  must use a price term.
• Price terms, also called trade terms or delivery
  terms, are an important component of a unit price
  in international trade, standing for specific
  obligations of the buyer and the seller.
• The price terms refer to using a brief English
  concept or abbreviation to indicate the formation
  of the unit price and determine the
  responsibilities, expenses and risks borne by two
  parties as well as the time of the passing of the
  property in the goods.

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• In 1936, the International Chamber of Commerce
  (ICC) drew up a set of standard terms and
  definitions, which are known as Incoterms 1936.
• The purpose of Incoterms is to provide a set of
  international rules for the interpretation of
  most commonly used trade terms in foreign trade.

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Group E EXW Ex-works ????
Group F FAC Free Carrier ?????
Group F FOB Free on Board ???????
Group F FAS Free Alongside Ship ???????
Group C CFR Cost Freight ????????????
Group C CIF Cost, Insurance Freight ?????????
Group C CPT Carriage Paid to ????
Group C CIP Carriage Insurance Paid to ??????
Group D DAF Delivered at Frontier ????
Group D DES Delivered Ex-ship ???????
Group D DEQ Delivered Ex-Quay ???????
Group D DDU Delivered Duty Unpaid ?????
Group D DDP Delivered Duty Paid ?????