International trade for this article is explained as, “a means of connecting a seller and a buyer to trade across countries for a particular good(s)/service(s) at an agreed price, with accepted payment instrument, and an acknowledged sanctioned working procedure”.
Trade is simply the selling and buying of goods or services. Where a seller puts across a good or service searching for a credible buyer, and the buyer seeks (agrees) to purchase the good or service of the seller. Buyers on the other hand, in an equal measure require a credible, efficient, track record and seller who can perform seamlessly.
Borders/Boundaries is the physical demarcation or territorial sovereignty of nations (countries). Example is, Ghana is bordered to the East by Togo, Ivory Coast to the West, and Burkina Faso to the North. These three countries Ghana shares boundaries/borders with basically are our neighboring countries. There is as well the broader boundaries or borders of continents, for instance we have Africa, Europe, Asia, North America and South America, and Australia.
Goods/Services is the item or product of transaction between a performing seller and a credible buyer. Hence without goods or services in essence, trade or international trade cannot happen in a vacuum. So, goods or services of any variety is the fulcrum around which trade or international trade evolves.
Price is the single most important agreement or discussion that ensures trade or international trade takes off on a smooth starting. Price is the economic value at which a good or service is exchanged between a seller and a buyer for mutual benefits. Price discussions, negotiations, countering, acceptance and agreement is critical to finalizing a trade between any two interested parties. Price is key to satisfying both seller and buyer to agree to trade. Price solidifies and fortifies the spirit and intent of trading or engaging the common interest of both seller and buyer.
Payment Instrument is the guarantee or assurance of settling the agreed price and accepted payment schedules or arrangement. In strict international trade or business transaction, instrument might imply any of the following: Stand-By Letter of Credit (SBLC), Letter of Credit (LC), Bank Guarantee (BG), Block Fund, Proof of Fund (POF), Bank Comfort Letter (BCL) and others. Payment can be by Swift messaging or others. The commonest and often requested mode of Payment is MT103.
Procedure/Steps of Engagement is the agreed ‘way and manner’ for which both seller and buyer have agreed to guard and guide the business transaction or trade between both parties. Procedure is usually given by seller to buyer for consideration by buyer. However, buyer can as well submit their proposed procedure for seller’s consideration. In any which way, either the seller or buyer is at free will to ‘counter’ the procedure for final acceptance by both parties.
Nonetheless to enter into international trade, just like a customary administrative or managerial functions or roles, it is necessary and incumbent you appreciate the following tools or principles (however, not limited to them):
• Activation: Activation is meant to initiate a business dealings with the next party or partner. By activating a party or partner in international trade or business, it is recommended you come prepared, straight to point, clear and concise and precise with what the activation is about. The activation should be enough to fully get the other partners desire to enter into a business or trade with your offer or activation. Simply put, activation can equally be referred to as an offer from one party (buyer/seller) to the other party (seller/buyer). In practice however, activation or offer can be: Letter of Intent (LOI), Irrevocable Corporate Purchase Order (ICPO), Full Corporate Offer (FCO) and others.
• Trust: Trust is simply to get and secure the attention of the other party who has fully been activated. Trust is never an end on itself. Trust is work in progress. Trust needs always to be spiced with water, air, nutrients and constant food by both parties to ensure both parties are at par with each other in terms of information, updates, expectations and projections. Trust is not to be jeopardized for anything. Trust is not to be taken for granted. Once trust is missing or jeopardized, then expectedly nothing fruitful can come out of the business at hand.
• Integrity: Integrity is key to business transactions. Both seller and buyer ought to ensure their integrity is top notch and free from dirt. Integrity comes for both the firm or business and the individual representatives of the firm or business. At any moment, integrity is lost for the firm or personality, then the business at hand suffers a detrimental and unrepairable damage. Integrity is the soul, body, spirit and vehicle covering the success or otherwise of any business transaction.
• Confidence: Confidence is imperative to setting the business tones and asserting the competence of parties to a trade or business transactions. Confidence basically exhibits our ability to perform a trade or business to the life span of such a transaction. The confidence we exhibit to our partners in business (trade) convinces and wins us over to them. Confidence is one business tool we ought to take seriously and continue working on to ensure we boast our assurances and personality.
• Long term relationship/rapport: Any moment we intend activating any business prospects, we ought to reflect that it is for a long term. This is because, business is a going concern and expected to live for the foreseeable future. Hence, any moment we activate or offer a business prospects to any partner, we should ensure we do that for keep. Meaning we are going into such business prospects for a long term relationship or rapport. The relationship or rapport we build and keep with our business prospects or partners goes a long way to show whether such a trade or business have a Short term or long term relationship and mutual benefits?
• Competence: You would realize that, from the point of activating a business prospects or partner, to building trust, to ensuring integrity, to cementing confidence and to ensuring a long term business relationship, we ought to be competent of our business or trade offer. Competence is vital to securing and consolidating a business prospects or transaction. Be competent on what you want or have to offer. Be competent on how you want it delivered or intent delivering. Be competent on why you need the other partner (cannot overlook your offer) or why they can’t do without you. Be competent on where you want the partner to deliver or where you will deliver up to. With competence we show no weakness or lack of knowledge to the other partner, such that our incompetence be exploited against our interest. Simply put, competence is to abide by the agreed timelines, arrangements, understandings and schedules.
• Professionalism: A principle worth emulating and practicing is, “at all times be professional and exhibit professionalism to the latter”. Be professional in all your dealings or correspondences with the party you into business or intent being in business with. Being professional pays a lot. When you least expected, your professionalism opens more opportunities to you than being disrespectful and belligerent. Go for professionalism when into business transaction or trade. Professionalism is to abide by the etiquettes and training of your profession or industry of practice. Such that you exhibit great maturity, calmness and much resolve to going by what ought to guide and ensure success of the trade or business you into with your other parties.
• Understanding: Without understanding one another, basically there is no need for projections, no need of planning and no need to work as a team to achieve set goals or target of the business prospects. Understanding is imperative if at all an international trade or business is to be successfully closed. Each party of the seller and buyer are required at all times to reach understanding on what is to be executed/implemented, how to be executed, when to be executed, where to be executed and why to be executed for a desired outcome. With understanding between seller and buyer at material times, all the above critical questions are adequately discussed at length and agreed, and procedures are placed at each predetermined stage to be achieved seamlessly and efficiently devoid of misunderstanding.
• Pro-Activeness: Pro-activeness in simply terms requires the ability to prepare forehand for any inconvenience, mishaps, delays or disappointments that might impede the success or otherwise of the business prospects or trade at hand. Pro-activeness requires us to be foresighted on happenings in our business environment, to have oversight on intricacies of business transactions, have a firm insight on knowledge of the industry of practice, and clear convictions on decisive decisions we take periodically. Proactiveness is one business tool we ought to train oneself often in other to acquire the tools of foresight, oversight, insight and clear convictions. These tools when we put to practice will have a direct correlation on our business dealings, such that it will guide and aid us to render sound judgment.
• Sound Judgment: Sound Judgment is the instance to make injunctions, inferences and conclusions that stands the test of time and is relevant. The ability to make sound judgment on business transactions and most especially in international trade goes a long way to sanction the success or otherwise of such a business prospects or trade. Sound judgment is a skill and business tool worth mastering in the business world. Sound Judgment interestingly bars emotions and feelings into decisions making. Devoid your sound judgment from emotions, feelings and guesses, which most often is not empirically driven for an optimal efficient solutions.
• Experience: Experience is the composition of all what is required to guard and guide utterances, writings, thoughts and correspondences in a business prospects or trade. Experience gives one the spring board to shoot higher than its partner who is not well versed in such a business prospects or trade. Experience is the mother of succeeding or failing in a business. Success to a large extent in international trade is dependent on how experienced one is in such a trade or business line. The reverse is largely true. In any capacity you are currently in, the advice is to sacrifice your time and energy with devotion to learn and practice your skill or trade to perfection. In effect you are gathering your wealth of experience and wisdom which is a cardinal business principle worth inculcating.
In all these let me link it to the reality of international trade or business prospects with an excerpt of message sent a partner some time past:
“Hi Seller A,
Good Morning Seller A. Trust our mail reaches you doing fine. We extend warm greetings as well to your entity.
We write to ask for your response to the 30 days LC sent by Buyer B on the 8th of January 2020 by Representative C.
On the 25th of January (specifically 22nd of January) 2020 we were made to understand that in 10 days’ time we would get Seller A’s final response. Today the 5th of February 2020 is exactly 10 (working) days as we were promised.
Kindly we wish to know:
1. What is the response from Seller A to Buyer B on the transaction at hand?
2. What specifics are the Issues (concerns or worries) of Seller A regarding Buyer B’s issuing of 30 days LC?
3. What does Seller A require Buyer B to satisfy for this transaction to go through?
4. Any genuine feedback worthy of Buyer B’s knowing after the ‘due diligence, background check and verification’ of Seller A’s bank on the 30 days LC (the transaction at hand)?
We (Representative C) strongly suggest the following as the way forward:
1. Seller A and Buyer B should have a conference call first thing today (preferably before noon, 12:00pm).
2. Seller A should put in writing acceptance of the 30 days LC or otherwise stating issues worthy for Buyer B’s attention. An acceptance and assurance is highly recommended.
3. Propose a timeline for the shipment schedules for the transaction at hand.
4. Show more willingness and capacity to perform to Buyer B.
5. Ensure more communication and timely correspondence with Buyer B.
We expect Seller A is in the know that, as part of understanding between Seller A and Buyer B, Seller A was supposed to show PPOP (partial proof of product) as soon as Buyer B issues the 30 days LC.
We encourage Seller A to bullet their genuine concerns with the 30 days LC as advised by their bank for Buyer B’s consideration. Most importantly with the proposed conference call, this should be settled once Seller A and Buyer B discuss the issues.
Counting on your full cooperation and kindest consideration. We expect to have a swift response from your end. Thanks for your assistance.”
The above excerpt is an instance of a quarter billion dollars commodity transaction, the aftermath of which was not materialized.
There is a word called ‘SETBACK’. Setback is bound to happen in a business prospects or international trade especially when a party (seller/buyer) has followed the rules (procedure, understanding and contract) to the latter. Once setback sets in, the ability to manage the setback gives a clear picture on your mindset, maturity, calmness, composure, acumen and likelihood of bouncing back strongly and spectacularly. It is my strong proposition that, no matter the gravity of the setback in shutting the success of the business or trade at hand, ‘the equal measure of energy and focus we redirect (and channel) in making a resounded come-back is the antidote in granting us the best, effective, strategic and optimal solutions (outcomes)’. Kindly never give up, no matter the avalanche of setbacks, disappointments and failures. Be a fighter, a hero and champion you are to stand tall, bold, daring and fearless to conquer all setbacks and fears. All the best in your strides thus far in achieving your dreams and goals.
Author Name: Ismail M. KAILANI.
Title: Head of Research and Operations, Aliska Consult Ltd-Accra
Email: i.kailani@aliskaconsult.com / kailaniismail@gmail.com