Preparing for business negotiations and setting up a contract
First impressions count so make sure you get it right when you meet your potential business partner.
An importer interested in new products or services is starting from his current situation and will be looking for reasons to switch suppliers or add products to the assortment. You can help by having answers to questions by being one step ahead, already knowing which options are available and what exporting would look like in practice.
Know what’s included in a contract
A contract is an agreement between you and your business partner, with obligations that you must both meet. A good starting point when preparing to negotiate a deal, is making sure you have answers and know your preferences to all details that are part of a contract. These include:
- Product description: description, quantity, quality, certificates and other details
- Delivery: specified according to Incoterms
- Price: including currency
- Payment conditions: payment method and time of payment
- Documents: commercial invoice, packing list, insurance, certificate of origin, certificate of inspection, customs documents, other documents
In international trade, Incoterms set rules and guidance which are used for trade worldwide. Their basic purpose is to divide the responsibilities between the exporter and the importer establishing who is responsible up to which point, think for instance of insurance. The terms defined in the Incoterms are used in contracts between an importer and exporter, where the definitions set by the Incoterms apply. Familiarise yourself with the Incoterms before entering into trade negotiations. Read more
In your preparations towards an international contract, you can have a look at the International Trade Centre’s model contracts for different types of agreements.
What is your offer?
Before starting the negotiations, you need to know what you can offer and what your margins are between your preferred option and alternatives that would still be OK for you. For instance, you may be prepared to sell under your preferred price, but not lower than your costs for production. And you may be able to scale up production, but not too quickly as this in turn will require additional investments and resources which will take time to organise.
Also bear in mind that the first time you meet a buyer, he or she may not be very familiar with your country, the logistics options and transit time for instance. You should be prepared to provide this information for a potential buyer as it allows him to compare your offer with his current suppliers.
Bear cultural aspects in mind
Building a successful business relationship means understanding each other and knowing what is appreciated and what is not. It is always appreciated if you show you know and understand the culture of your business partner in your target market. To prepare for doing business in Sweden, these are some of the cultural aspects that characterises the business environment. Read up on the Swedish business culture
Get further information
Feel free to contact us at Open Trade Gate Sweden. We can assist you with questions you may have in your export preparations. In order for us to provide as useful an answer as possible, please be specific in your question and description.