International Business is common for many agricultural companies. You may be a large exporter, an importer, perform production for a multi-national, or have an emphasis strictly on logistics. "Because every country has its own government, policies, laws, cultures, languages, currency, time zones, and inflation rate, navigating the global business landscape can be difficult." (Harvard Business Review).
No matter the type or size of your organization many factors should be kept in mind with any cross-border interaction. These considerations keep business running smoothly and without too much offense towards your partners. Over the past 25 years I have worked with international customers in various roles. After many conversations I compiled the seven most important messages I heard in recent years from overseas customers regarding what they wished their business partners knew.
1. “Communication and updates must be timely…from your entire team.” Sales staff should provide prompt quotes and always offer a heads up when there are indications prices or inventory could fluctuate. If not, it can negatively affect your buyer’s budget and import license(s). Offering shipping schedules and order status before the customer asks from the logistics department is appreciated and helps them coordinate local delivery. Customer Service staff promptly preparing documents prevents customs delays and undue costs for the buyer.
2. “Stick with the facts. Provide all-in-one pricing.” It’s aggravating to receive pricing information from a supplier which says something like “$xx.xx plus freight, plus testing, plus handling, plus service charge, plus packaging, plus documents.” All-in single pricing (in most cases) is much easier to understand and use in a budget. It provides much less ambiguity and uncertainty for factors which are out of your buyer’s control. Keep it simple for them.
3. “The small details matter in a big way!” A former colleague of mine made a big mistake when preparing shipping documents for a $5m+ consignment. The order was sold through a Letter of Credit and when negotiated with the bank they were considered discrepant because she used an “O” (letter O) instead of a “0” (zero). It was a very costly mistake but eventually corrected. While this is an extreme example, missing small details on your shipping documents can cause problems with a buyer upon import which could result in delays, demurrage, higher tariff rates, and other unnecessary charges. Slow down and double check your work.
4. “Honesty, if you don't know please don't pretend you do.” Ideally a successful transaction will result in a win-win situation for both parties. This can be achieved by fair pricing, access to products, shipping schedule, specialized packaging, and market knowledge. A few years ago, I received a call from a supplier saying, “I agreed to ship product to my buyer’s destination with all the documents and a phytosanitary certificate. What’s a phytosanitary certificate?’” This supplier agreed to a sale they didn’t have the knowledge or ability to provide which would unquestionably result in quick failure for both parties. If you can’t provide exactly what your customer wants, product or service, just tell them.
5. “Please know my needs.” Years ago, a colleague and I were visiting an overseas customer who was discouraged with the reduced sales their product was having in the local market. After seeing their distributor stock both ours and the competitors product we quickly saw there was a deficiency in packaging and our customer needed something better. This situation had an easy solution and sometimes small changes such as packaging, specialized tags, or even additional marketing material can make a big difference for your customer. Other times your customer may require greater assistance by receiving access to new products, increased market exclusivity in their region, or even flexibility on payment terms. All can help them receive a market advantage which will benefit you both.
6. “Local culture has a strong impact on my buying and selling.” One highlight of working globally is experiencing new cultures. This isn’t always easy though. Greetings for example could be with a handshake, cheek kisses, bowing, a hand to your heart, or just a smile. Some cultures tend not to be very open to new relationships as others, but you will find most are open to new ideas. It’s a good idea to research the country you’re doing business with first to prevent possible complications. A simpler way to avoid problems is to ask your customer what is important to them. China for example cannot take shipments during the (lunar) New Year. Many European customers go on holiday in August and prefer to avoid imports. Lacking understanding of the local culture, its influence on consumer demand and decision-making can result in failure and significant costs to your business.
7. “Try to learn my language, even if a little bit.” English is the business world’s most common language but learning a little of your business partners language goes a long way. Many organizations have discovered the hard way words matter. Mercedes Benz tried to market the “Bēnsǐ” which translates to “rush to death” in Mandarin Chinese. Ikea struggled in English markets offering the “Fartfull” workbench which means speedy in Swedish. The Chevy Nova was a “no go” in the Spanish markets. Don’t offer your German partner a free “gift” which means poison. When determining a new product name be sure to vet the words meaning in any country you intend to market it to avoid potential misfortune.
For more information contact AgCultured Consulting.