It’s well worth negotiating payment and delivery terms

Manuel Rieder, co-managing director of Tarzan GmbH: “As a label for sustainable street fashion and corporate fashion, we work with suppliers from Bulgaria, Slovenia, Portugal, Turkey and India. One thing we’ve learnt is that the cheapest deal is not always the best one, and that models are well worth it. This is because there is always a chance something will go wrong during production, and models help us reduce the risk of producing a substandard final product. It’s also important to regulate payment and delivery terms properly. We, for example, pay 30% when we award the contract, then pay a further sum when the product is ready for delivery, and we pay the rest when we receive the product. As a relatively small company, we don’t have much scope for negotiating. With that said, we do still push for contractually agreed discounts wherever possible if a product is delivered too late, or for assurance that, in the event of any delays in production, clothing items must be sent by air at the exporter’s expense. We consider personal contact to be a very important part of international business relationships, which is something that facilitates many aspects of cooperation. This is also how long-term partnerships are forged, for instance with an Indian supplier we have worked with ever since we made our very first T-shirts.”

There are a lot of rules to bear in mind in foreign business

Angela Hausammann, Audio Bauer Pro AG: “As an international company that makes and sells professional microphones and earphones, we often develop special products for our customers that are tailored to their requirements. It’s vital we avoid any misunderstandings in the process. Even if many people can communicate in English, it’s occasionally difficult to explain details over the phone or by e-mail. This is why we prefer to communicate over Skype so that we can actually show the product as well. When exporting, a particular challenge for us is that we supply customers from countries with different time zones. This requires flexibility, and frequently a willingness to have video sessions in the evening or early in the morning. As far as importing products is concerned, it is important to bear in mind the strict import rules of some countries, and the fact that documents such as commercial invoices and delivery notes have to be specially adapted. There are, for instance, countries where discounts cannot appear on commercial invoices. If I had to give a company with little or no experience some tips for foreign business, I would say:

• You should only deliver goods consignments to new customers via advanced payment
• Offer prices in different currencies: CHF/EUR/USD, and open the relevant accounts
• Don’t just communicate by e-mail, but over the phone or Skype as well
• Bear in mind that different countries have different mindsets, i.e. what applies or is normal in Switzerland may be viewed or handled completely differently in other countries
• Keep an in-house record of all processes, including special requests/import regulations and so on.
• Be sure to always check goods consignments very carefully before they are sent, as exchanging them abroad is very costly and time-consuming.

Be wary of transport costs and cyber crime

Reto Lüscher, Voyage Cycling Store: “Seeing as good import terms usually depend on quantities, you don’t often have a very good position for negotiating as a small company. This means that if you want some flexibility, you need to put forward strong arguments and explain your situation to your business partner in clear terms. When I negotiate with international suppliers, I may for instance point out that, even if their margin proves to be slightly less, it can be well worthwhile having a good distribution partner in Switzerland – especially if we’re dealing with products (our bikes, for instance) that also require advising customers on-site. Another important issue when it comes to foreign business both for us and certainly many other SMEs as well is transport costs. After all, these can be a major item, especially if you’re dealing with consignments where the value of the goods is low. As far as transport costs are concerned, my advice is to bundle your consignments where possible, or to send them or have them sent by parcel service rather than use a forwarding agent to send them as small consignments on pallets. And here is another completely different piece of advice I would give: be wary of cyber crime and do not share any bank account details by e-mail. We had one instance where some cyber criminals did a very professional job hacking into some correspondence with a customer abroad, and sent him fake bank account information. The result was that the customer paid into the account, and we lost the money.”