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Trade Leads - How to use them profitably (Part II)

 

The challenge - How to separate wheat from chaff

There is no user manual or detail rules - but common sense, observation, care and imagination will help you locate the more potential leads and manage your time and resources that much better. Following are some guidelines (based on my experience) that you may consider:

  
Find Reliable and Exclusive Source

If you talk to people who actually sell in foreign markets, they will privately tell you that their best leads are the ones which they generate themselves usually by direct mail. It is far easier to cultivate a trade lead into business when they come from exclusive source, not available to zillion others or lying in some free bulletin board. The options are clear - either invest in research to locate buyers or take professional help. There is no free lunch - there had never been any.

  
Be wary of peeping Toms

Look for keywords that might indicate the intention - if the guy is gathering information and has no intention to buy. Be suspicious of companies who ask for detailed information about manufacturers' prices but reluctant to identify themselves.

  
Be careful of large orders

Be very wary of companies who post trade leads for large orders and are not easily located in any company or industry directories. These are often small companies who will issue an RFQ (request for quotation) for large quantities in order to get a lower price and then will try to order a very small quantity at that price.

  
Mind the language

Do not be unduly influenced by flowery language or very specific requirement. Do not pre-judge the lead - exercise all precautions required in international business. Many small manufacturers get trapped by this.

  
Check the market

If you are not a manufacturer and outsource products - be careful of locked market activities. This trade lead will specify a particular product. Your company contacts the manufacturer, hoping to make a commission on the sale, only to find out that the manufacturer already has representation in that country and will not sell the product to you for resale to that market because they want to protect their distributor relationship.

  
Jack of all Trades ?

Generally ignore companies who claim to deal in any commodity traded on world markets and who are placing trade leads. Traded commodities such as coffee, sugar, urea, oil and gold are handled by well established companies in well established markets. These companies usually do not place trade leads in order to do business.

  
Do not Believe in Overnight Success

Be very wary of international business scams designed to separate you from your money. Be suspicious of anybody who prefers phone conversations to written documents. Do not get sucked into fantastic business opportunities which promise to yield you huge profits with no risk. Learn which countries and areas have a reputation for spawning international business fraud and avoid them like the plague. Never respond to business opportunities which require you to make wire transfers in advance of receiving goods or services.

  
Understand the virtue of patience

Understand that most foreign distributors do not make fast buying decisions. It is not at all unusual for an initial order to require 9-18 months from the time of the initial solicitation depending upon the cost of the item.

  
Develop relationship

Instead of treating the leads as 'export order' with a hit or miss attitude - use the opportunity to develop lasting relationship. Understand buyer's requirements and offer solution accordingly. Do not indulge in monologue on your products - make it a dialogue on how both the companies can stand to gain from a mutual understanding.

Source: Archival Issues of FAIDA

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