In exporting, the terms quote, offer sheet and price sheet may be used instead of quotation. The basic information that an export quotation should have includes a description of goods, trade terms (e.g. FOB, CFR or CIF), unit price, packing, means of delivery (e.g. ocean or air), delivery time, and payment terms. No strict form is used in the quotation. Using the company letterhead for a general quotation is quite common.

Units of Measurement

Most countries have officially adopted the metric units (e.g. kilogram, meter, liter, and cubic meter) of measurement. The Imperial units (e.g. pound, foot, gallon, and cubic foot) and some local units are still in use in some countries, besides the metric system.

A unit of measurement like the ton may refer to the metric ton (2204.6 lbs. or 1000 kgs.), short ton (2000 lbs. or 907 kgs.), or long ton (2240 lbs. or 1016 kgs.). The exporter must clearly indicate the proper unit used in the quotation and contract.

Please see Conversion Factors - Units of Measurement for the other units of measurement.

The preferred terms of import quotation, in the ocean freight, of some of the selected importing countries (areas) of the world are as follows:

Importers may request for trade terms not listed above. In practice, importers usually specify the terms of import quotation.

The import duty is often based on FOB or CIF value. Some countries may require itemized charges on the CIF term, that is, showing on the invoice the FOB value, insurance and freight, and may further require the cost of packing material and labor.

Some countries may require that the import and/or export shipments be insured with their national insurance companies.

• Diagram of international commercial terms
  
• Applicable Trade Terms in Different Modes of Transportation
  
• Outline of Trade Contract Responsibilities
  of the Seller (Exporter) and Buyer (Importer)

The primary goal of a business is to make money. Trimming the profit margin in order to win a deal is not uncommon in exporting. However, sacrificing the profit margin at the expense of quality must be avoided.

Business practices and standards of living vary from country to country. In some countries a markup of 25% on imported goods is considered excellent, while others may require at least 60% in order to survive.

It is very important to know who your competitors are and their selling price and sales strategy. Quite often, the price competitiveness overrides all other considerations in the initial contact with the buyer. How a product is priced is crucial in getting the buyer's attention, before the buyer becomes familiar with the quality of the product, delivery and service. When dealing with a large importer like chain store, quoting a high price may cause the buyer to lose interest, unless a business relationship already exists between exporter and buyer, or unless the exporter has a new product where there is no competition.

Rarely is an exporter able to offer a product to all customers at the same price. Price bargaining is not uncommon in exporting. However, a few large importers are willing to provide a counter-offer, unless the product is unique or new and there is little or no competition. If the importer has a buying agent in the exporter's country, it would be better to contact the agent.

Pricing, Exchange Rates and Price Validity

In some countries, the domestic selling price of imported goods changes a few times a year. However, in Western countries the selling price usually remains constant throughout the year. The strategy of selling at a low price for the first order and then increasing the price for the next order may backfire. The buyer may insist on paying the same, if not a lower, price for the repeat order. Once a price is lowered, it can be difficult to increase unless competitors are forced out.

Most international transactions are conducted in U.S. currency. The exchange rate fluctuates and the costs of export goods change. The exporter will lose money in the event of currency appreciation in the exporting country. For example, three months ago US$1 that was worth 125 Yen is only worth 90 Yen today, which means the exporter will lose 35 Yen for every dollar converted now. On the contrary, the exporter will receive extra money in the case of currency devaluation in the exporting country.

In times of exchange rate instability, the exporter can negotiate with the buyer to deal in the exporter's currency, instead of U.S. funds. The exporter must indicate in the quotation its price validity, for example, "prices valid for 30 days from date" or "prices subject to our final confirmation (or acceptance)."

The HS---Harmonized System or Harmonized Commodity Description and Coding System---was developed by the Customs Cooperation Council (CCC) in Brussels, Belgium, as the basis for an international system to classify goods for customs purposes. It is a 10-digit system presently being used by most of the world's trading partners. The HS is an update of the CCCN (Customs Cooperation Council Nomenclature), which was redrafted and renamed in 1965 from the BTN (Brussels Tariff Nomenclature) produced in 1957. The HS information is available at the customs office and government external trade department.

The buyer's customs broker may encounter ambiguity in identifying the tariff number of a new product from the exporter. The ambiguity can be due to a vague product composition, which may mean a different tariff code (number) and import duty. Under these circumstances, the buyer may request the exporter to provide the proper HS code.