International Trade Negotiation Cases

Foreign trade negotiation case: Sichuan Hongjian Chemical and Kyrgyzstan customer cooperation negotiation
1, Background and Requirements Analysis
Customer background:
A certain oil unit in Kyrgyzstan. Previously, it mainly relied on Russian imports, and the supply chain was blocked due to the Russia-Ukraine conflict, so it is urgent to open up Chinese sources of goods.

Chinese enterprises:
Sichuan Hongjian Xinyi Technology Co., Ltd. has an annual production capacity of 500000 tons of ammonium persulfate and is qualified for export. It is the first to explore the Central Asian market.

Core negotiation topics:

Price and Payment Method: The customer expects to purchase at a price lower than the Russian market;
Transportation and delivery time: Inland countries have complex logistics, requiring clear transportation routes, cost allocation, and delivery time;
Quality dispute clause: Customers may claim compensation for clumping issues within 30 days of receiving the goods;
2, Negotiation Process and Strategy
Phase 1: Technical Communication and Trust Building
Chinese actions:
Provide third-party testing reports (with ammonium persulfate content greater than 98.5%), invite customers to video visit the production line, and demonstrate the anti caking coating process;
Emphasize the advantages of China Kyrgyzstan road transportation.
Customer feedback:
Recognizing the stability of quality, but pointing out that high temperatures in Central Asia during summer may lead to the risk of clumping during transportation, it is requested that the cost of moisture-proof packaging be increased and borne by the Chinese side.
Phase 2: Price and Term Game
Customer price reduction strategy:
Comparing historical quotes from Russia, claiming that 'Chinese products need lower prices to compensate for supply chain risks';
Propose a 60 day deferred letter of credit payment to alleviate cash flow pressure.
Chinese response plan:
Payment terms concession:
Accept forward letter of credit, but require a 15% advance payment to reduce risk;
Risk sharing clause:
If clumping occurs due to improper temperature control during transportation, the Chinese side will bear 50% of the loss, but requires the customer to provide a third-party inspection report during unloading.
Phase Three: Facilitating Cooperation
Cultural adaptation:
Presenting customers with a white paper on logistics cooperation at Xinjiang ports (in three languages of China, Russia, and Kyrgyzstan), highlighting the willingness to deeply cultivate the Central Asian market.
3, Negotiation results
Contract terms:
Upgrade the packaging to double-layer moisture-proof film, with each party bearing 50% of the cost;
The claim period has been shortened to within 15 days of the arrival of the goods, and an international notary report is required.
Long term cooperation:
If the first order loss rate is less than 3%, exclusive supply agreement negotiations will be automatically initiated;
The Chinese side promises to dispatch a technical team to guide local warehouse moisture-proof management.