How do foreign trade novices do foreign trade? Read this article until you understand it!

1. Introduction to foreign trade: Understanding the essence and business model

Foreign trade is a complex business that spans time zones, cultures, and languages, involving the entire chain of quotation, contract, production, logistics, collection, and after-sales service . Mistakes in any link may lead to order failure.

Differences in business models that newbies must know:

• B2B (corporate customers) : The order value is high (up to hundreds of thousands of dollars), but the procurement cycle is long (sample confirmation and negotiation may take several months)

• B2C (individual consumers) : Fast order placement and quick payment, but high post-sales pressure (e.g., return shipping costs may erode profits)

Recommendations for entering the industry in 2025: first accumulate 1-2 years of experience in a mature team, familiarize yourself with products, processes and customer habits, and then consider independent operation or deep cultivation of niche markets.

2. Market research and product selection: Avoid failure on the first order

Core tools for market research:

• Google Trends : Analyze product search trends and seasonality

• Customs data : such as AB customer customs data , to check the actual import volume of the target market

• Industry Reports : Understand Competitor Pricing and Market Share4

2025 Product Selection and Avoidance Guide:

1. Avoid homogeneous low-priced products : For example, screws with a FOB price of $0.2, where established sellers have already monopolized the market.

2. Prioritize lightweight and high-value-added products : low transportation costs and less prone to damage (e.g., electronic accessories, smart home products)

3. Ensure supply chain stability : Avoid the dilemma of "first order hits, second order out of stock"

4. Certification and compliance are prioritized : CE certification is required for export to the EU, and a health certificate from the destination country is required for food exports (the certification cycle at the Council for the Promotion of International Trade is 3-5 days).

Case warning : A novice exporter did not research voltage standards and exported air conditioner outdoor units to South America. The goods became scrap metal due to voltage mismatch upon arrival.

3. Essential Knowledge: International Trade Terms and Payment Risk Control

1. Key points for practical application of Incoterms® 2020

• FOB (Free on Board) : Risk transfers to the buyer once the goods have crossed the ship's rail. However, be wary of the buyer specifying a freight forwarder to release the goods without a bill of lading . Insist on using the shipping company's original bill of lading.

• CIF (Cost + Insurance + Freight) : Fill in the total amount including freight and insurance in the "Total Price" column of the customs declaration form. The difference with the invoice amount should not exceed 5%, otherwise it will trigger the customs risk warning.

• DDP (Delivered Duty Paid) : The seller is responsible for all shipping costs and customs duties. Be sure to calculate the cost accurately (beginners should choose carefully)

Recommended reading: Essential knowledge for foreign trade novices: a comprehensive explanation of the concept of trade terms - save this article and start your foreign trade journey!

2. Payment method risk ranking and risk control tools

• Security level : 100% before T/T (telegraphic transfer) > Letter of Credit (L/C) > DP (Documents against Payment) > OA (Open Account)

• Letter of credit pitfalls :

  • Reject soft terms such as "revocable" and "buyer confirmation required to take effect"

  • Request a third-country bank (such as Deutsche Bank) to add confirmation (the confirming bank assumes payment responsibility)

  • Using AI tools to scan clauses improves efficiency by 70%

• Export Credit Insurance : Sinosure covers 80% of cargo losses, helping Sichuan companies avoid million-dollar order scams by 2025

4. Customer Development: Low-Cost, High-Conversion Channels

2025 Efficient Customer Acquisition Matrix:

Development letter lightning avoidance formula:

• Title: [紧急] 替代[竞品名]的[产品]方案- 节省X%成本

• Main text: ≤ 4 paragraphs, focusing on 1 pain point + data support + limited-time sample policy

5. Full process operation: from order to payment

Detailed explanation of the entire process of foreign trade exports in 2025:

1. Order and Contract

• Production scheduling : Delivery date is 7 days earlier than the latest shipment date of the letter of credit, leaving a buffer

• Contract terms : Quality standards (quantitative indicators), delivery date (accurate to the day), and breach of contract clauses (penalties for delayed delivery) must be clearly stated in writing.

2. Production and quality inspection

• Inspection at key points : Raw materials arrive at the factory → Semi-finished products → Full inspection before shipment

• Third-party inspection : SGS/BV reports to avoid quality disputes (especially for new customers)

3. Logistics and customs clearance (2025 new regulations)

• Booking pitfalls :

  • Refuse to use the buyer's designated freight forwarder under FOB (unless the freight forwarder has excellent reputation)

  • Hazardous chemicals must submit their UN numbers through the single window [Hazardous Chemicals Declaration] portal

• Customs declaration operation :

  • Log in to the China International Trade Single Window (web version or Electronic Port Assistant APP)

  • For multimodal transport, fill in code "9" and indicate the combination of "sea transport + rail transport" in the remarks column.

• Electronic documents : The certificate of origin number is filled in the "Certificate of Origin Number" column of the customs declaration form, and the system automatically verifies the HS code matching

4. Collection and Refund

• Control of goods : Never release the original bill of lading (B/L) or agree to a Telex Release before receiving full payment

• Tax refund speed up : the first tax refund requires cooperation with tax verification (5-7 days to arrive), and the non-first tax refund only takes 1-3 days

Recommended reading: The most comprehensive guide: From inquiry to document settlement, one article explains the international trade process clearly!

VI. Risk Prevention and Control: Addressing High-Incidence Traps in 2025

1. Loss of control over cargo ownership in logistics – releasing cargo without a bill of lading (SWB sea waybill)

• 7 high-risk scenarios :

  ① The buyer forces SWB+credit payment
  ② The destination port is a country with high cargo release rate, such as Thailand or Brazil
  ③ Under FOB, the buyer designates the freight forwarder to issue the SWB

• Countermeasures :
  → Insist on the original bill of lading (B/L)
  → Purchase insurance for cargo release without documents (insurance amount ≥ 110% of cargo value)
  → The contract stipulates that "SWB must release the goods upon written instruction from the seller"

2. Detecting Letter of Credit Fraud

• Risk signals :
  ✘ Saudi Arabian customers forged bill of lading dates when refusing payment
  ✘ The bank placed a million-dollar order despite missing underwriting records

• Defense combination : Double protection of confirming bank + credit insurance , reducing losses by 80%

3. Response to exchange rate fluctuations

• Currency lock tool : Forward settlement locks the exchange rate (especially for single transactions exceeding $50,000)

• Segmented settlement : 30% deposit + 70% payment before shipment

7. Essential Toolkit for Beginners (2025 Update)

Government and Compliance Tools:

• China International Trade Single Window : One-stop service for customs declaration/inspection/certificate of origin

• Amazon SPN Mini Program : Officially certified service provider (logistics/ERP/certification), covering 17 major sites

Efficiency-enhancing tools:

• Lingxing ERP : Covers over 100 platforms including Amazon and Temu, automatically synchronizing order/inventory/financial data (preferred for medium and large enterprises)

• AB customer website building system : build multilingual independent websites and website clusters within 72 hours, intelligent SEO + content marketing + data analysis, one system = one operation team

Newbie Tips : Use CRMs like AB Customer to manage the entire customer process and prevent employees from leaving and taking away resources.

Conclusion: The Law of Long-term Survival

Foreign trade is a marathon, not a sprint. Continuous learning, tooling, and branding are key.

• Daily focus : customs policies, Incoterms® updates, tax changes in target countries

• Long-term investment : independent website SEO, distribution network, social media matrix

• Rejecting price wars : Building a moat with professional services and reliable delivery

Warning for 2025 : The seemingly tempting "million-dollar order" may be a scam that uses quality disputes as an excuse to refuse payment - a small trial order + credit insurance verification is the bottom line for novices.