Uncovering the secrets of foreign trade B2B order execution process: practical tips not to be missed

For foreign trade novices, the appeal of B2B foreign trade business is undoubted. However, mastering the order execution process is crucial to success. Understanding this process not only helps reduce business risks, but also improves customer satisfaction. This article will provide a comprehensive guide to the foreign trade B2B order execution process and provide detailed and practical suggestions at each step.

Customer negotiation and contract signing

In the early stage of foreign trade B2B business, finding potential customers and signing contracts are the first steps. The specific steps are as follows:

Customer development channels

There are several effective ways to find potential customers. B2B platforms such as Alibaba and Global Sources are good choices. These platforms allow you to showcase your products to a global audience. Participating in international trade shows is another excellent method. For example, the Canton Fair in China attracts thousands of buyers from all over the world. Social media platforms such as LinkedIn can also be used to connect with potential customers. You can share your product information and industry insights to attract their attention.

Key points of business negotiation

When it comes to product pricing, it is crucial to conduct market research to understand the price range of similar products. You can offer different price ranges based on product features and quantity. When it comes to negotiation strategies, listen carefully to your customers’ needs and concerns and work hard to find win-win solutions. For example, if a customer asks for a lower price, you can offer a longer payment term or additional services. To understand your customers’ needs, use open-ended questions such as “What are your specific requirements for this product?”

Explanation of contract terms

The contract is the legal basis for the execution of the order. Key terms include product specifications, prices, delivery dates, payment methods, and liability for breach of contract. When formulating product specifications, be as detailed as possible. For example, if you sell clothing, clearly state the fabric, color, size, and style. Prices should be clear and include FOB, CIF, or other terms. Delivery dates should be feasible and agreed upon by both parties. For payment methods, T/T (telegraphic transfer) is a common choice. When filling out the contract, first list all the products and their details in the product description section. Then, specify the price and payment terms. Next, determine the delivery date and shipping method. Finally, add a liability clause for breach of contract. For example, if the supplier fails to deliver on time, they may need to pay a certain percentage of the order amount as compensation.

A new foreign trade company once lost a large order because the product specifications were not clearly specified in the contract. The product received by the customer did not meet their expectations, resulting in damage to the business relationship between the two parties.

Product production coordination

After the contract is signed, the next step is to coordinate the production of the product.

Supplier Selection

Choosing the right supplier is crucial. You should evaluate their qualifications, production capabilities, and reputation. Check their business licenses and certifications. For example, if you are in the food industry, the supplier should have relevant food safety certifications. Evaluate their production capabilities by asking about their production equipment, labor, and production plans. You can also ask for references from their previous customers. The standard list for supplier screening may include items such as production quality, delivery time, price, and after-sales service.

Production progress tracking

To ensure that production is proceeding smoothly, you can create a production progress tracking sheet. List key production milestones and their expected completion dates. Communicate with suppliers regularly by phone or email. You can also visit the factory in person to see the production status. For example, if you produce furniture, you can visit the factory to see the wood cutting, assembly, and finishing processes.

Solving production problems

Various problems may arise during the production process, such as raw material shortages or technical difficulties. If there is a shortage of raw materials, you can work with suppliers to find alternative suppliers or adjust production plans. If there are technical difficulties, you can consult technical experts or ask suppliers to improve the production process. A foreign trade company once encountered a shortage of raw materials when producing electronic products. By quickly finding an alternative supplier, they finally completed the order on time.

Quality Control

Quality is the lifeblood of foreign trade products. How to ensure product quality?

Determine quality standards

You need to develop quality inspection standards based on customer requirements and industry standards. If customers have specific quality requirements, such as a certain durability or performance, be sure to include them in the standards. You can find industry standards through industry associations or relevant government regulations.

Quality inspection methods

Raw materials are inspected upon arrival. For example, if you are using steel for manufacturing, check its hardness, chemical composition, and surface finish. During production, random inspections are performed. You can use sampling techniques to select a certain number of products for inspection. After production is complete, all finished products are fully inspected. Inspections can be performed using tools such as calipers, microscopes, and testing machines.

Dealing with quality issues

If you find quality problems, communicate with the supplier immediately. Clearly explain the problem and the expected solution. You can ask the supplier to rework the products. After rework, conduct another inspection. At the same time, keep your customers informed of the situation. For example, if a batch of toys has peeling paint, you can ask the supplier to repaint them and provide a detailed report of the process to the customer.

Logistics and transportation arrangements

Once the product is ready, it’s time to arrange for shipping.

Choose a transportation method

There are many modes of transportation, including sea, air, and land. Sea transportation is suitable for bulk, low-value products and is relatively cheap, but the transportation time is longer. Air transportation is fast but more expensive, and is suitable for high-value, time-sensitive products. Land transportation is often used for cross-border transportation between neighboring countries. When choosing a transportation method, please consider product characteristics, delivery date, and cost.

Selecting a logistics provider

Evaluate logistics providers based on service quality, price, and transportation network coverage. You can request quotes from multiple logistics providers and compare their services. Check their track record of handling similar shipments. A good logistics provider should be able to provide timely updates on the status of your shipment.

Customs clearance process

First, prepare the necessary documents, such as commercial invoice, packing list, bill of lading, and certificate of origin. Then, submit these documents to a customs broker or clear customs yourself. Cooperate fully with customs during inspections. And provide any additional information or samples as needed. For example, if you are exporting agricultural products, you may be required to provide a phytosanitary certificate.

Payment Settlement

The final step in the order fulfillment process is payment settlement.

Common payment methods

T/T (Telegraphic Transfer) is a simple and fast payment method. The buyer transfers the funds directly to the seller's bank account. L/C (Letter of Credit) is a safer payment method, especially for large transactions. The bank guarantees the payment on behalf of the buyer. Collection (collection) is also a common payment method, where the seller entrusts the bank to collect the payment from the buyer. Each payment method has its own processes and risks.

Prevent payment risks

To prevent customers from delaying payment, you can specify payment terms in the contract. For example, requiring a certain percentage of the deposit to be paid before production begins. To deal with exchange rate fluctuations, you can use hedging strategies such as forward contracts. A foreign trade company once suffered losses due to large fluctuations in exchange rates. By using forward contracts in subsequent transactions, they were able to reduce exchange rate risks.

Follow up payment

Send payment reminders to customers promptly. If there are any payment anomalies, communicate with the customer immediately to understand the reason. For example, if the payment is late, ask the customer if there is a problem with the payment process or if more time is needed.

Summary and Outlook

In short, the foreign trade B2B order execution process involves customer negotiation, production coordination, quality control, logistics arrangement, and payment settlement. Each link is crucial and needs careful care. For foreign trade novices, continuous practice and accumulation of experience are essential. By optimizing the order execution process, you can expand your foreign trade business and enhance your competitiveness in the international market.

If you’re ready to take your B2B business to the next level, start implementing these practical tips today! Contact us for more in-depth guidance and support.