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Foreign markets offer U.S businesses tremendous opportunities, but a superior product at a low price simply isn't enough. U.S companies who want to compete overseas must be prepared to compete aggressively and offer generous credit terms.
Foreign markets offer U.S businesses tremendous opportunities. Nevertheless, many U.S companies attempting to conduct business and trade overseas find themselves losing deals to a foreign competitor – even if they have a better product and a better price. Why? Because their competition has an extra tool in its toolbox – favorable credit terms.
U.S companies often don't understand the importance of credit terms as part of the overall negotiation process. Since it is a buyer's market, buyers are in a better position to demand favorable terms. Credit terms play a crucial role in the purchasing process overseas. Terms we might consider excessive or overly generous for the U.S market are considered normal in foreign markets. In the United States, terms are typically 30 to 60 days. In Italy or Spain, however, 120 days is standard and even longer terms are commonplace in Africa or Asia. Remember, no matter how good your product is, if you cannot offer competitive terms, the buyer will purchase elsewhere.
How are foreign competitors able to offer such favorable terms without worrying about the credit risk? Simple – they transfer the risk to a credit insurer. With credit insurance, if a customer defaults, they still get paid. Collecting the liability is the insurance company's problem, not theirs. With credit insurance, your business can be in the same position as your foreign competitors. You can close the deal and make the sale with the same favorable terms and without the credit risk.
Do you want to know how trade credit insurance can significantly increase your company's sales and profits while reducing your overall business risk? Call totay at 718-871-3282