When it comes to doing business in a foreign country, especially if it is China, as well as offering a good deal in import of hardware to our potential clients, knowing the customs of the country to avoid making a mistake that can hinder negotiations in China or learning about the roots of non-verbal language, it is necessary to know specific terms. Today we present you a glossary with the 5 most important topics to learn more about the negotiations in China.
Terms of Marketing: B2B and B2C
To get into the world of the negotiations in China, we must be familiarized with the strategies of marketing and the target group of each one of them. To begin with, the term B2B is one that focuses on actions “business to business”. Customer can be an organization that hires products or services for internal use, or an intermediary. The exact deition is “action that is mainly related to wholesale, but also may refer to services and consumption of content”. On the other hand, the B2C means Business-to-Consumer and it means “strategy that commercial enterprises develop to get directly to the client or consumer”.
Legal documents: BL, DUA.
On the one hand we find the initials BL (Knowledge of shipping), a document issued by the maritime carrier as he has taken the goods in the import from China. This document includes details of buyer, seller, maritime consignee, contents of load, port of origin and destination.On the other hand we find the DUA, a standardized declaration of import or export between a member of the European Union and third countries. This document is presented to the Customs Office for the entry or exit of goods from a country of the EU and is the basis for the tax declaration.
- Logistics: Picking
On the other hand, the Picking is “the process of withdrawal of a product or packaging unit from the store to prepare the order for a customer”. In group purchasing, it is applied to the separation and distribution in orders separate of the purchase of each individual company.
- Incoterms: CFR, CIF and DDP
The Inconterms are standardized contracts to regulate the obligations of buyer and seller in international trade with China or other countries.
On the one hand, the CFR (cost and freight, port of destination) is an incoterm applicable to loads transported by boat, except for containers. CIF (cost, insurance and freight, port of destination) is the incoterm whereby the costs of transport to the port of destination, freight and load insurance are included in the purchase price. The seller assumes them.
In addition, the DDP (delivered with rights paid) is the type of incoterm which assign to the seller most responsibilities. You must be responsible for all costs and procedures until the goods are delivered in the place agreed with the buyer.
Finally the FOB is one of the incoterms used in international trade by sea or river and establishes that the transfer of the goods from the seller to the purchaser is aboard the ship where it will be carried, and the risk is implicit. The purchaser is who should deal with transport of the goods from the boat to his warehouses.
- Management and control systems: QSM, RC, Shipping Card, Test report and VIES
During the transport and logistics process, various systems of control and management are established. On the one hand we find the QMS (Quality Management System), a system of quality management is the set of procedures and actions focused in ensuring the quality of a product or service. It involves the planning, monitoring and evaluation of all the elements that make up a particular business process or activity of the Organization as a whole.
On the other hand, with the RC, we create a policy that protects the manufacturer or distributor for damage caused to third parties.
In addition, through the Shipping Mark (labelling of load) we identify and prevent losses. Finally, with the Test Report, we collect the results of a systematic trial to analyze whether a product complies with the requirements that have been set for approval.
We also add the VIES, a tax control instrument of the European Union for trade activities among member countries. All legal persons performing international operations on Community territory must enroll in the VIES Census and obtain the corresponding identification number (NIE-VAT).