Presentation on theme: "Abstract: This chapter mainly tells about the concept and characteristic of various trade forms; main contents of various trade agreement; and issues of."— Presentation transcript:
Abstract: This chapter mainly tells about the concept and characteristic of various trade forms; main contents of various trade agreement; and issues of using various trade forms. Section 1: Distribution Section 2: Agency Section 3: Consignment Section 4: Fairs and Sales Section 5: Invitation to tender and Submission of Tenders Section 6: Auction Section 7: Counter Trade Section 8: Processing trade Chapter 10 International Trade Forms
Section 1: Distribution 1. Concept and nature of Distribution The Concept of Distribution The Types of Distribution Distribution Sole Distribution or Exclusive Sales
Advantages and disadvantages of sole distribution Advantages: Exclusive sales helps to arouse the enthusiasm of exclusive distributor, use the distributor's marketing. Channel, and consolidate and expand the market Exclusive sales can effectively reduce multi-channel ’ s self competition Exclusive sales help to organize production and supply in a planned way. Disadvantages: The exclusive distributor may take advantage of its monopoly position to manipulate market. The exclusive distributor may still sale the goods of other export enterprises and not sale the appointed goods attentively.
Section 2: Agency 1. The nature and characteristics of agency The relationship between agent and principal is Principle-Agent relationship. Case analysis:
2. Kinds of agency General Agent Agent or Commission Agent Solo Agent or Exclusive Agent Case analysis:
The Comparison of Sole Distribution and Solo Agent Similarities: 1. They both have monopoly ability and the right of exclusive sales within appointed territory and time limit. 2. They both help to arouse the enthusiasm of exclusive distributor and exclusive agent. Differences: 1. They have different relationships between involving parties 2. They have different risk. 3. They have different reward.
3. Agency agreement Please notice the non-competition clause. (Restrain the Agent) As to the sole agency, in order to safeguard the interests of export enterprise, the minimum purchase amount is usually stipulated. If the agent fails to reach or exceed the minimum amount, the principle will adjust the agent's commission accordingly. As to the sole agency, the exclusive agency agreement usually stipulates that the agent can still obtain commission when the principle sign the contract direct with client inside the territory
Section 3: Consignment 1. The concept and nature of consignment 2. The characteristics of consignment 3. The main contents of consignment agreement 4. The advantages and disadvantages of consignment
Section 4: Fairs and Sales 1 ． The meaning and practice of Fairs and Sales 2 ． Fairs and Sales in our country International fair Chinese Export Commodities Fair 3 ． Issues of doing Fairs and Sales business
Section 5: Invitation to tender and Submission of Tenders 1. The meaning and characteristic of Invitation to tender and submission (1) The meaning of Invitation to tender and submission (2) The characteristic of Invitation to tender and submission 1. It ’ s competed by numerous bidders in a fixed time and place 2. The trade is concluded without negotiation 3. The bidder can only bid once, no counter-offer.
2. Kinds of Invitation to Tender (1) Open Bidding or International Competitive Bidding Note: The purchase under World Bank's loan, mostly adopt the international competitive bidding. (2) Selected Bidding (3) Negotiated Bidding (4) Two-stage Bidding It ’ s a combination way of opening bidding and selected bidding.
3. Procedure of Invitation to tender and Submission of Tenders (1) Invitation to tender 1. Issue announcement of tender: Note: Selected bidding doesn ’ t need issuing announcement of tender. 2. Prequalification 3. Draw up invitation document
(2) Submission of tenders 1. Prepare work before submission Note: the submission of tenders is a firm bid can ’ t be withdrawn before the award. 2. Make invitation document and provide bid bond 3. Submit application for tender
(3) Opening of bids and award of bid (4) Win the bid and sign the contract When concluding the contract, the winning bidder is usually required to pay the performance bond.
Section 6: Auction 1. The conception and characteristics of auction （ 1 ） The conception of auction （ 2 ） The characteristics of auction It ’ s a kind of spot transaction bid publicly It is according to certain principles and regulations It is well organized and carried on in some certain organizations
2. Kinds of Auction Mark-up auction Mark-down auction or Dutch auction Sealed bids or closed bids
3. General procedure of auction Preparation Inspection by the buyers Formal auction Making payment and taking delivery of the goods 4. Some explanations to the issues raised in auction business
Section 7: Counter Trade 1. The conception, characteristics and main forms of counter trade The conception of counter trade The characteristics of counter trade The main forms of counter trade 2. Barter Trade The forms of barter trade The advantage and disadvantage of barter trade
3. Compensation Trade (1) The conception and characteristics of compensation trade (2) Types of compensation trade Product Buy-back Counter Purchase Labor Compensation
The function on the importer of equipment technology The function on the exporter of equipment technology (3) The functions of compensation trade
(4) Limitations of compensation trade 1. Equipment suppliers do not generally accept repaying with the counter sale product. 2. It is difficult to bring in highly advanced technical equipment, and the price is usually on the high side 3. If the export quantum of the compensation product is great, it may compete with the export of the similar product. 4. Compensation trade is relative complicated and time-consuming.
Section 8: Processing trade 1. Processing with supplied materials (1) The nature of Processing with supplied materials (2) The function of Processing with supplied materials (3) The main contents of Processing with supplied materials Pay attention to the terms of payment Pay attention to the stipulations of transportation and insurance
2. Processing with imported material The conception of Processing with imported material The difference between Processing with imported material and Processing with supplied material The meaning of doing processing business with imported material 3. Overseas processing trade The conception of overseas processing trade The necessity and feasibility of overseas processing trade The application procedure of developing overseas processing trade Precautions of developing overseas processing trade
Summary In order to promote the development of foreign trade and strengthen the export commodities' competitiveness, we hope the students can use various kinds of trade forms flexibly in practice, and pay attention to the combination use of different trade forms. Key points: similarities and differences of exclusive distribution and exclusive sales, pros and cons on consignment, compensation trade. Difficult points: similarities and differences of processing with imported material and processing with supplied material