Question

Discuss why it is important to have a Incoterm strategy from both the exporter and importer points of views.

Answer 1

Most pursued goals are market protection, cost minimization, capacity utilization and maximization of profit.

Many people associate incoterms with freight charges.

Incoterms are planned for tangible goods, but despite this fact they can be agreed for services, licenses or software within the scope of the freedom of contract.

The use of incoterms eliminates inconsistencies in language by giving all parties the same definition of specific terms within a trade agreement.

Incoterms are rules agreed to beforehand by the international community to avoid misunderstandings.

Importers and exporters must agree in advance on their respective roles and the terms, conditions and definitions of the sale.

Tax set-up may mean the price you'll pay in one country for a particular product, even with transport costs, is much lower than you'd pay in the UK.

Exporting like the term with least responsibility for them, Ex works. The seller says, "The goods are at my book dore, come and get them.

To increase your revenue and profitability by expanding your business.To shield you from fluctuations in your domestic market.

The workshop develops, exporting learn that the Ex works rule has risks, such as the potential of a diverted shipment.As an exporter, you must trust the purchaser.