Trade methods refer to various methods used in international trade. With the development of international trade, trade methods are becoming increasingly diversified. In addition to the method of selling one by one, there are also underwriting, agency, consignment, auction, bidding and tendering, futures trading, counter trade, etc.

Exclusive sales is one of the methods commonly used in international trade. In my country's export business, according to the characteristics of certain commodities and the need to expand exports, in the appropriate market, appropriate customers are selected, and the underwriting method can also be used.

Exclusive sales refers to a trade in which the exporter (client) gives the operating rights of a certain commodity or a certain type of commodity in a certain region and within a certain period to a foreign customer or company through an agreement. practice. Although underwriting is also a fixed sale, underwriting is different from the usual unilateral export one by one. In addition to the sales contract signed by both parties, an underwriting agreement must also be signed in advance. With underwriting, the rights and obligations of the buyer and seller are determined by the underwriting agreement. The sales contract signed by the two parties must also comply with the provisions of the underwriting agreement. The underwriting agreement includes the following main contents:

1. The name, signing date and place of the underwriting agreement.

2. The preamble of the underwriting agreement

Usually in the foregoing clauses, it is clear that the relationship between the underwriter and the principal is the relationship between the principal and the principal (principal to principal). Buying and selling relationship.

3. Scope of underwritten goods

The principal (exporter) deals in a wide variety of goods, even if they are the same type or type of goods, there are also different brands and specifications. Therefore, in an underwriting agreement, both parties must agree on the scope of the underwritten goods.

4. Underwriting area

The underwriting area refers to the geographical scope within which the underwriter exercises sales.

Usually there are the following methods of agreement:

1. Determine a country or several countries;

2. Determine several cities in a country;

3. Determine a city, etc.

To determine the size of the underwriting area, the following factors should be considered:

1. The scale and ability of the underwriting;

2. The sales that the underwriter can control Network;

3. The nature and type of underwritten goods;

4. The degree of market differentiation;

5. The topographic location of the underwritten area, etc.

5. Underwriting period

The underwriting period can be long or short. In my country's export business, the term is often clearly specified when signing an underwriting agreement, usually one year. It is common practice in the markets of other countries to not stipulate a time limit in the underwriting agreement, but only to stipulate suspension clauses or renewal clauses.

6. Exclusive rights

Exclusive rights refer to the underwriter’s right to exercise exclusive sales and purchases, which is an important content of the underwriting agreement. Franchise rights include exclusive sales and exclusive buying rights. The former is that the principal (exporter) gives the underwriter the exclusive right to sell the specified goods in a specified region and within a specified period. The exporter has the obligation not to sell directly to customers in the region. The latter is the obligation of the underwriter to purchase the item from the exporter and not from a third party.

7. Underwriting quantity or amount

In addition to the above content, the underwriting agreement should also specify the quantity or amount. This quantity and amount are equally binding on both parties to the agreement. Sometimes the quantity and amount are specified in the agreement, then the underwriter must bear the obligation to purchase the specified quantity and amount from the exporter, and the exporter must bear the responsibility of exporting the above quantity and amount to the underwriter.

8. Pricing methods

There are different methods for pricing underwritten products. One approach is to make a one-time price determination within a specified period of time. That is, regardless of whether the price of the goods underwritten in the agreement rises or falls, the price stipulated in the agreement shall prevail. Another approach is to set prices in batches within a specified underwriting period.

Since prices in the international commodity market are highly variable, it is common to use batch pricing.

9. Advertising, Publicity, Market Reporting and Trademark Protection

The parties to the underwriting agreement are in a buying and selling relationship, so the principal (exporter) is not actually involved in the sales business in the underwriting area. , but he is very concerned about exploring overseas markets. In order to promote the trademark used for its products, the principal often requires the underwriter to be responsible for publishing certain advertisements for his products. For example, some underwriting agreements stipulate: "The buyer is responsible and funded to hold exhibitions for the seller's machinery and equipment in its underwriting area, solicit orders, and place advertisements in local newspapers and periodicals." Some agreements stipulate that the underwriter should visit this period to hopefully conclude the deal. Customers or sellers require underwriting to provide market reports as much as possible.

Agency

Agency refers to an agent who concludes a contract or performs other legal acts with a third party on behalf of the principal in accordance with the authorization of the principal. The rights and obligations arising therefrom are directly effective on the individual.

1. The relationship between the agent and the principal is an entrusted sales relationship. In the agency business, the agent only acts on behalf of the principal, such as soliciting customers, soliciting orders, signing sales contracts on behalf of the principal, handling the principal's goods, accepting payment, etc. He does not participate in the transaction as a party to the contract.

2. Agents usually use entrusted funds to carry out business activities.

3. Agents generally do not sign contracts with third parties in their own names.

4. The remuneration earned by the agent is commission.

Types of agents

In the capitalist market, there are usually the following types of agents:

1. General agency (general agency) The general agent is designated Full authority for regional principals.

In addition to having the right to act on behalf of the client in signing sales contracts, handling goods and other business activities, he can also engage in some non-commercial activities. He has the right to appoint sub-agents and share in the agent's commission.

2. The exclusive agency or soleagency

3. Commission agency

Commission agency, also known as general agent, refers to those who work under the same agency An agency in which several agents act on behalf of the principal at the same time within the agency area, time and period. The commission agent calculates commission from the client based on the actual amount of goods sold and the method and percentage stipulated in the agreement. The client can directly make transactions with actual buyers in the area and does not need to pay commission to the commission agent.

Consignment

Consignment is a trading method in which goods are sold on an entrusted basis, and it is also one of the practices commonly used in international trade. In my country's import and export business, the consignment method is not commonly used. However, in the transactions of certain commodities, in order to promote transactions and expand exports, the consignment method can also be used flexibly and appropriately.

"Consignment" is a trading method that is different from agency sales. It means that the consignor (consignor) first transports the goods to the consignment place and entrusts a foreign consignor (consignee). According to the conditions stipulated in the consignment agreement, the consignor will do the work on behalf of the consignor. After the goods are sold, the consignee will settle the settlement with the consignor. A trade practice of payment for goods.

Compared with the normal selling method, the consignment method used in international trade has the following characteristics:

1. The consignor first transports the goods to the destination market. (consignment place), and then sell to local buyers at the consignment place through agents. Therefore, it is a typical spot transaction in which physical objects are bought and sold.

2. The relationship between the consignor and the agent is an entrustment and sales agency, not a sales relationship. The consignor disposes of the goods only in accordance with the consignor's instructions. Title to the goods remains with the consignor until sold at the consignment place.

3. All costs and risks incurred before the consignment is sold, including during transportation and after arriving at the consignment place, shall be borne by the consignor.

After the consignment goods are shipped for export, you can also use the method of selling road goods before arriving at the consignment place. That is, when the goods are still in transit, if conditions are met, the transaction will be completed and sold. If the sale fails, the goods will still be sold. Shipped to original destination.

Tendering and tendering

Tendering (invitation to tender) means that the tenderer issues a tender announcement or tender order at the time and place to propose the variety, quantity and related information of the goods to be purchased. Conditions of sale, the act of inviting bids from sellers.

Tender (tosubmit tender) refers to the act of a bidder submitting an offer to the tenderer within a specified time at the invitation of the tenderer and in accordance with the conditions specified in the bidding announcement or tender order.

In fact, bidding and tendering are two aspects of a trading method.

Currently, there are three or four types of bidding methods adopted internationally, namely

ddgt; 1. Intenational competitive bidding (ICB) refers to the bidder Invite several or even dozens of bidders to participate in the bidding, and through competition among the majority of bidders, select the bidder who is most beneficial to the tenderer to complete the transaction. It is a redemption method.

There are two methods of international competitive bidding:

a. Open bidding. Public bidding is an unlimited competitive bidding. When adopting this approach, the tenderer must publish bidding advertisements in major domestic and foreign newspapers and periodicals, and anyone who is interested in the bidding content will have the opportunity to purchase the bidding materials and bid.

b. Selected bidding. Selective bidding is also called invitational bidding, which is limited competitive bidding. When this method is adopted, the tenderer does not publish advertisements in newspapers and periodicals. Instead, the tenderer invites merchants based on their specific business relationships and intelligence materials. After pre-qualification, they will then bid.

2. Negotiated bidding

Negotiated bidding is also called negotiated bidding. It is non-public and a non-competitive bidding. In this kind of bidding, the tenderer selects several merchants to directly negotiate the contract. If the negotiation is successful, the transaction is concluded.

3. Two-stage bidding (two-stage bidding)

Two-stage bidding refers to the comprehensive method of unlimited competitive bidding and limited competitive bidding. When this method is adopted, public bidding is used. Tendering and then selective tendering are conducted in two stages.

Most government procurement of materials adopts competitive public bidding methods.

Auction

An auction is a method in which a specialized auction house accepts the entrustment of the owner of the goods and uses open bidding at a certain place and time in accordance with the prescribed regulations and rules. , a spot transaction method in which the auctioneer finally gives the goods to the buyer with the highest bid.

Most of the goods traded through auctions are of a quality that is easy to standardize, difficult to store for a long time, or goods that are customarily auctioned. Such as tea, tobacco, rabbit fur, fur, wood, etc. For certain commodities, such as mink skins and Australian wool, most transactions are conducted through international auctions.

Auctions are generally conducted by specialized organizations engaged in the auction business in a certain auction center market and within a certain period of time in accordance with local unique laws and regulations.

The auction process is different from general export transactions. The transaction process generally goes through four stages: preparation, inspection, bidding, payment and delivery.

There are three bidding methods for auctions:

1. Increased price auction, also known as buyer's bid auction. This is the most commonly used auction method.

During the auction, the auctioneer proposes a batch of goods and announces the predetermined minimum price. After the valuation, the bidders bid one after another and compete to increase the price. Sometimes the amount of each increase is specified until the auctioneer thinks that no one will bid anymore. Out of taller people.

2. Reduction auction, also known as Dutch auction. This method first calls out the highest price in the auction, and then gradually reduces the bidding price until a certain bidder thinks that it is low enough to pass. The accepted price indicates a buy.

3. Sealed bid auction, sealed bids (closes bids) auction is also called bidding auction. When using this method, the auctioneer first announces the specific situation and auction conditions of each batch of goods, and then each party seals and submits its bid to the auctioneer within the specified time for the auctioneer to review and compare and decide. To which bidder will the goods be sold? This method is not an open bidding, and the auctioneer sometimes has to consider other factors besides price. Governments or customs in some countries often use this auction method when dealing with inventory materials or confiscated goods.

Futures trading

Futures trading (futurestransaction) is a process in which many buyers and sellers bargain in accordance with certain rules in a commodity exchange by shouting and using gestures, and reach transactions through fierce competition. a form of trade.

Futures trading is different from spot trading in commodities. As we all know, in the case of spot trading, buyers and sellers can reach physical transactions in any way, at any place and at any time. The seller must deliver the actual goods and the buyer must pay for them. Futures trading refers to futures trading conducted in a specific futures market, that is, in a commodity exchange, in accordance with the "standard futures contract" pre-established by the exchange at a certain time. The buyer and seller do not transfer ownership of the goods after the transaction is completed. Because futures trading has the following characteristics:

1. Futures trading does not require both parties to provide or accept actual goods;

2. The result of the transaction is not the transfer of actual goods, but payment or The price difference between the date of signing the contract and the date of performance of the contract;

3. The futures contract is a standard futures contract formulated by the exchange, and can only be traded in accordance with the commodity standards and types specified by the exchange. ;

4. The delivery date of futures trading is determined according to the delivery date specified by the exchange. Different commodities have different delivery periods;

5. Futures contracts must be registered and settled at the clearing house established by each exchange.

Types of futures trading

Futures trading has two different types according to the purpose of the trader: one is to use futures contracts as gambling chips, buying and selling , a purely speculative activity that pursues profits from the difference between price fluctuations; one is hedging by people who are truly engaged in physical transactions. The former is called "short buying and selling" in business custom. It is a gambling and speculation activity carried out by speculators based on their own judgment of the market prospects.

The so-called "short buying", also known as "long", means that speculators estimate that the price will rise and buy futures; once the price of the goods rises, they sell the futures and earn the price difference. The latter is called "hedging" in business practice, also known as "Haiqin".

Counter trade

Counter trade is also translated as "reverse trade", "mutual offset trade" and "reciprocal trade" in my country. Some people also refer to it as "counter trade". It is generally called "barter" or "big barter."

We can generally understand countertrade to include barter, bookkeeping trade, mutual purchase, product repurchase, resale trade, etc. that are goods The scope of trading is a general term for various trade methods with the same characteristics of combining import and export and exports to offset imports.