Business Negotiation
A: The seller Miss Lin representing Huaxin Trading Co. Ltd.
B: The buyer Miss Cai representing James Brown & Sons
A: Good morning, Miss Cai. Glad to meet you.
B: Good morning, Miss Lin. It’s very nice to see you in person. Let me introduce my
colleagues to you. This is my manager, Miss Cai.
A: How do you do? Miss Cai.
B: How do you do? Mr. Wang. Nice to meet you.
B: ……And this is Mr. Cai. He is in charge of sales department. This is Miss Huang. She
is in charge of business with clients.
A: Nice to meet you, Mr. Cai, Miss Huang.
B: Nice to meet you, Miss Lin.
A: How are thing going?
B: Everything is nice.
A: I hope through your visit we can settle the price for our Chinaware, and conclude the
business before long.
B: I think so, Miss Lin. We came here to talk to you about our requirements of HX Series
Chinaware. Can you show us your price-list and catalogues?
A: We’ve specially made out a price-list which cover those items most popular on your
market. Here you are.
B: Oh, it’s very considerate of you. If you’ll excuse me, I’ll go over your price-list
right now.
A: Take your time, Miss Cai.
B: Oh, Mr. Wang. After going over your price-list and catalogues, we are interested in
Art No. HX1115 and No. HX1128, but we found that your price are too high than those
offered by other suppliers. It would be impossible for us to push any sales at such high
prices.
A: I’m sorry to hear that. You must know that the cost of production has risen a great
deal in recent year while our prices of Chinaware basically remain unchanged. To be
frank, our commodities have always come up to our export standard and the packages are
excellent designed and printed. So our products are moderately priced.
B: I’m afraid I can’t agree with you in this respect. I know that your products are
attractive in design, but I wish to point out that your offers are higher than some of
the quotations. I’ve received from your competitors in other countries. So, your price
is not competitive in this market.
A: Miss Cai. As you may know, our products which is of high quality have found a good
market in many countries. So you must take quality into consideration, too.
B: I agree with what you say, but the price difference should not be so big. If you want
to get the order, you’ll have to lower the price. That’s reasonable, isn’t it?
A: Well, in order to help you develop business in this line, we may consider making some
concessions in your price, but never to that extent.
B: If you are prepared to cut down your prices by 8%, we might come to terms.
A: 8%? I’m afraid you are asking too much. Actually, we have never gave such lower
price. For friendship’s sake we may exceptionally consider reducing the price by 5%.
This is the highest reduction we can afford.
B: You certainly have a way of talking me into it. But I wonder if when we place a larger
order, you’ll farther reduce your prices. I want to order one container of HX1115 and
438 sets of HX1128.
A: Miss Cai, I can assure you that our price is most favourable. We are sorry to say that
we cannot bring our price down to a still lower level.
B: OK. I accept. Now, let’s talk about the terms of payment. Would you accept D/P? I
hope it will be acceptable to you.
A: The terms of payment we usually adopt are sight L/C.
B: But I think it would be beneficial to both of us to adopt more flexible payment terms
such as D/P term.
A: Payment by L/C is our usual practice of doing business with all customers for such
commodities. I’m sorry, we can’t accept D/P terms.
B: As for regular orders in future, couldn’t you agree to D/P?
A: Sure. After several smooth transactions, we can try D/P terms.
B: Well, as for shipment, the soon the better.
A: Yes. Shipment is to be made in April, not allowing partial shipment.
B: OK. I see. How about packing the goods?
A: We’ll pack HX1115 in carton of one set each, HX1128 in cases of one set each, two
cases to a carton.
B: I suggest the goods packed in cardboard boxes, it’s more attractive than cartons. Do
you think so?
A: Well. I hope the packing will be attractive, too.
B: For transaction concluded on CIF basis, insurance is to be covered by the sellers for
110% of invoice value against WPA. Clash & Breakage and War Risk.
A: This term less these goods should damage in transit. I agree with it.
B: I’m glad we have brought this transaction to a successful conclusion and hope this
will be the beginning of other business in the future. Let’s confirm these items we
concluded at the moment.
A: Yes. We concluded as follows: 542 sets of HX1115 at the price of USD 23.50 per set to
be packed in cardboard boxes of one set each and to be shipped CIFC5 Toronto; 438 sets of
HX1128 at the price of USD 14.50 per set to be packed in case of one set each, two cases
to a cardboard box and to be shipped CIFC5 Toronto.
B: All right. By the way, when can I expect to sign the S/C?
A: Miss Cai, Would it convenient for you to come again tomorrow morning. I’ll get the
S/C ready tomorrow for your signature.
B: That’s fine. See you tomorrow. Goodbye, Miss Lin.
A: See you and thanks for coming, Miss Cai.
A: Good morning, Mr. Huang. Glad to meet you.
B: Good morning, Miss Li. Glad to meet you, too. It is my first time to visit Shanghai.
Shanghai has been known to me as an interaction port city before I came here.
A: We always take attention to establish business relations with the new clients in other
countries. I wish we will have a good time this morning.
B: I come here to visit you hoping to have a discussion with you on the purchase of your
HX Series chinaware.
A: Which Art. No. are you interested in?
B: HX1115 and HX1128.
A: Which price terms do you prefer, FOB, CFR, or CIF?
B: CIF.
A: The price of HX1115 is USD 24.19 per set CIF Toronto. The price of HX1128 is USD 14.93
per set CIF Toronto. It is understood that the above prices are net, without any
commission.
B: I am afraid it goes against the usual commercial practice not to allow a commission.
A: We are prepared to grant you a 5% commission. 442 sets of HX1115 at the price of USD
24.68 per set CIFC5 Toronto; 338 sets of HX1128 at the price of USD 15.23 per set CIFC5
Toronto.
B: I’m afraid your prices appear unworkable.
A: I am assuring you that our prices are most favorable. A trial sale will unvoiced you
of my words.
B: Unless the prices could match with the market level, it is difficult to persuade
customers to purchase with you. In order to conclude the transaction, I think you should
reduce your price to USD 23.00 per set of HX1115. Will you consider cutting down your
price to USD 14.20 per set of HX1128.
A: As the raw material has advanced by 10% during the last few months and the prices are
going up, owing to the rise in the cost of raw materials. We can’t accept this prices.
B: I think it unwise for both of us to insist on his own prices. Can we each make some
concession, say, the price of HX1115 is USD 23.50 per set CIFC5 Toronto; the price of
HX1128 is USD 14.50 CIFC5 Toronto?
A: If we accept your prices, we will not leave a little of margin of profit.
B: I am afraid we have to call the whole deal off if you still insist on your original
quotation.
A: Well for friendship’s sake, we are prepared to make a 5% reduction if your order is
big enough. Our minimum quantity is a 20’ container for each article.
B: Our quantities are 542 sets of HX1115 and 438 sets of HX1128.
A: OK.
B: Shall we have a talk about terms of payment now?
A: Our usual payment terms are by confirmed, irrevocable L/C payable by sight draft
against presentation of shipping documents and to reach us 30 days before the month of
shipment.
B: To open an L/C will cause us a great deal of difficult. It’s expensive to open an L/C
and ties up the capital of a company like ours. So it’s better for us to adopt D/P or
D/A.
A: L/C at sight is our usual payment terms.
B: It is better for us to adopt D/P at sight than L/C at sight.
A: We have never granted D/P terms to any new clients. So we hope you can accept the L/C
terms. After several smooth transactions, we can try other terms.
B: We can’t help it if you insist requiring payment by L/C at sight. By the way, what
cover will you take out?
A: The insurance is to be covered by us for 110% of invoice value against WPA Clash &
Breakage and War Risks as per the Ocean Marine Cargo Clauses of PICC (1981.1.1).
B: All right. How would you pack the goods?
A: HX1115 is to be packed in cartons of one set each. HX1128 is to be packed in cases of
one set each, two cases to a carton.
B: I hope the packing will be attractive. Nice packing helps find a market. Please give
special attention to the packing or the goods could be damaged in transit.
A: All right.
B: When is shipment to be made?
A: Shipment is to be made before or on April 30, 1998.
B: We have to point out that the goods are not allowing partial shipment.
A: OK. By the way, what are the Ports of Shipment & Destination?
B: Shanghai and Toronto.
A: I’m glad we have brought this transaction to a successful conclusion and hope this
will be the forerunner of other business in the future.
B: All right. I accept your offer of 542 sets of HX1115 at the price of USD 23.50 per
set, and 438 sets of HX1128 at the price of USD 14.50 per set. Shipment is to be made no
later than April 30, 1998 after receipt of L/C and not allowing partial shipment. The
Ports of Shipment & Destination are from Shanghai to Toronto. HX1115 is to be packed in
cartons of one set each and HX1128 is to be packed in cases of one set each, two cases to
a carton. The payment terms are by L/C at sight. Insurance is to be covered by you for
110% of invoice value against WPA Clash & Breakage and War Risks as per the Ocean Marine
Cargo Clauses of PICC (1981.1.1).
A: That’s right. I will get the Sales Confirmation ready tomorrow for your signature.
Would it be convenient for you to come again tomorrow morning?
B: OK. We expect to find a good market for your goods and hope to place further and large
orders with you in the near future. See you tomorrow morning.
A: See you.
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