Task5.2

1. Task5.2 Price and Commission

2. Contents 1. Aims and Requirements 2. Teaching tasks 3. Useful sentences & Homework

3. Aims and Requirements • In this chapter, students are required to grasp as follows • 1. Know price terms that are widely used in international trade • 2. Know how to negotiate price orally and talk about price by letter • 3. Master some negotiation strategies.     • 4. Grasp some words, expressions and typical sentences on this topic.

4. Teaching tasks • Task 1. Learn some basic knowledge about price terms • Task 2 Learn some dialogues and letters of negotiate price • Task 3 Learn some negotiation strategies. • Task 4 Useful words, expressions and sentences • Task 5 Practice

5. Task 1. Learn some basic knowledge about price terms FOB (Free On Board): 离岸价 The seller’s obligations under FOB terms: ： • 1. The seller delivers the goods on the vessel appointed by the buyer at an appointed loading port on the date or within a period speculated in the contract according to the port practice. • 2. The seller will bear all expenses before the shipboard of the loading goods and risks of goods losing or damage. • 3. The seller will bear his own expenses and risks to get the export certificate or other official approved certificates and go through all necessary custom formalities of the exported goods.

6. The buyer’s obligations under FOB terms • 1. The buyer will charter vessel, pay freight, issue shipping advice about name of the vessel, loading port and delivery time. • 2. The buyer will bear all expenses after the shipboard of the loading goods and risks of goods losing or damage. • 3. The buyer will deal with insurance and pay insurance premium. • 4. The buyer will bear his own expenses and risks to get the import certificate or other official approved certificates and go through all necessary custom formalities of the imported goods.

7. CIF (Cost, Insurance and Freight): 成本、保险加运费价 The seller’s obligations under CIF terms:： • 1. The seller is in charge of chartering and booking space at the appointed loading port and speculated period in the contract and signing a transportation contract to load the goods on the vessel and pay the freight to the destination as well as advising the buyer after loading. • 2. The seller bears all expenses and risks before the goods loading to the vessel. • 3. The seller deals with insurance company and pay for insurance premium. • 4. The seller goes through the export formalities and offer certificates issued by the export country government or related official departments.

8. Task 2 Learn some dialogues and letters of negotiate price • A: Mr. Zhao, last time we placed a trial order for your DVD players. Now I’m prepared to place another order. To come straight to the point, what is your lower price? • B: Lower price? Last time I made it clear that I gave you a favorable price to help you to get a start. We can’t close any more business on the same basis, to say nothing of making a reduction. • A: Compared with what is quoted form other suppliers, your price, I’m afraid, is not competitive at all. You know that business manly depends on your price. • B: I’m a little surprised to hear you say that. You know very well that our quality is far superior to theirs. The price is the same as we offered last time. • A: No doubt yours is of high quality, but our offer is the rock bottom price. The best we can do will be a reduction of 5 dollars per set. This is your lower price and we can’t go any further. • B: All right. I will accept your proposal.

9. Specimen Letter Asking for Discount • Dear Zhang • Thanks for your quick response in details. On reference to your HCO, we are satisfied with your specifications and quick delivery promise. But your price is much too high. Could you give us a discount of 10% if we order a large quantity over 200mt this time? Payment is to be made by irrevocable L/C at sight. We will place regular orders for at least 100mt each month. • Waiting for your acceptance. • Best .regards. • Jones (CEO) • chem@caschem.com

10. Writing skills • Thanks • Attitude to price offer. • Too high of your offered price • Ask for a discount based on a large order • Attract the supplier’s attention • Wishes • Contact information

11. Specimen LetterReply to asking for a discount • Dear Jones • Thanks you very much for your email today. We are so glad to establish good business relationships with your company and we will offer you best price. But your suggested 10% discount of the price is not acceptable. In consideration of the long term cooperation, we will give you a special price of 5% discount based on an order over 200mt. This price is the first time we offered only to you. • Waiting for your order. • Best regards • Starter Zhang • ChemChina Oil and Fat Co.,Ltd. • Tel: 86-536-8880111

12. Writing skills • Thanks • Discount rate unacceptable • Accepted concession • Special price with large order • Wishes • Contact information

13. Specimen Letter Asking for Commission • Dear Zhang, • We are distributor and trading company in America. We get your name from Mr. Jones of CasChem company. Your first grade of HCO is in superior quality and accepted by our customers. We want to place a regular order of 150mt each month. Could you accept a price with commission of 5% for this product? It is appreciated to get your best price CIFC5 New York. We are sure to pay by L/C at sight. • Your quick response is appreciated. • Best regards • Smith • Chemical Trading Company.

14. Writing skills • Thanks • Friendship and relations consideration • Commission allowed or not allowed • Commission rate and price offer • Delivery suggestion with good service • Wishes • Contact information

15. Task 3 Learn some negotiation strategies. Attract Customers: Strategies of Quotation Online • 1. Good preparation before offer 报价前充分准备 • 2. Choose appropriate price terms 选择合适的价格术语 • 3. Choose an appropriate quotation ways 选择合适的报价渠道 • 4. Take use of other key terms of the contract 利用合同其它要件 • 5. Succeed by a comprehensive power 以综合实力取胜

16. Task 4 Useful words, expressions and sentences • Words and expressions • competitive price　有竞争力的价格 • 修饰价格的常用词还有：(low, lowest, best, bottom, rock bottom) price: (最)低价 • reasonable price合理价, favorable price优惠价, • special price特价, target price目标价, current price现行价, prevailing price现行价, market price 市场价

17. 表示职务的常用词有： • sales manager　销售部经理 • president 董事长 　 • vice president 副董事长 • general manager 总经理 • vice general manager 副总经理 • executive director  执行董事 • auditor  监事              • department manager 部门经理 • section manager  科长 • assistant section manager 股长 • general secretary 总书记  • chief engineer 总工程师 • chief accountant 总会计师

18. Useful sentences • Price is hovering between $5 and $8. • We regret we have to maintain our original price. • It simply can't stand such a big cut. • This new product is moderately priced. • Everyone knows, the price of crude oil has greatly decreased. • We've already cut the price very fine. • The French price of stainless steel plates are about $1200 per mt, while the German price is still lower. • We're ready to reduce the price by 5%. • To have this business concluded, you need to lower your price at least by 3%.

19. Task 5 Practice • Oral Practice. Make a dialogue according to the following situations and requirements • You are a Chinese exporter of printed poplin (印花毛葛：由丝、人造丝、羊毛或棉花织成的有罗纹的织物，用来做衣服及装潢) and pongee（茧绸；山东府绸：一种轻柔的薄布料，由中国或印度产的原丝或它们的仿制品织成）, you are bargaining with the buyer on the following requirements: 1) product name 2) expressions of price term 3) ask for a lower price 4) the reason of a higher price 4) quantity consulted 5) discount 6) agreement

20. Writing practice: Write an English letter according to the following Chinese letter. • 先生： • 你3月25日函悉，谢谢。我们已仔细研究了你方对我氢化蓖麻油产品报价的意见。 • 虽我方想满足你方的要求，但十分抱歉，不能按你方要求降价，因我方价格经过了精确计算。即使我方价格与其他供应商的价格不同，那也是我方产品的质量远远超过其它厂家产品质量，从我方购进，你方定会得利。 • 我们准备给百分之五的折扣，条件是你方起订1000吨。如果此建议可接受，请早日告知。

21. The End • Thank you!