How To Ensure The Quality Of Goods You’re Buying Locally, Exporting, Or Importing Meets International Standards
A lot goes into every international trade transaction; from product sourcing to logistics, payment security, and much more. But while there are attractive profitable opportunities to explore, there are also great risks involved, and one risk that can cost you your entire investment is failing to ensure that the quality of the goods you’re exporting meets the export standard agreed between you and the international client.
Quality assessment is usually a great problem for a lot of exporters and managing this risk is key to building a profitable fast-growing international trade business, since meeting your obligations would help spread word of mouth. But when you fail to meet the quality standards specified, you wouldn’t just lose clients, but would also very likely lose your investment.
If you’re an exporter in Nigeria or any country located around the world, here are 6 ways to ensure the quality of goods you’re buying locally, exporting, or importing meets international market standards:
1). Study The Laws Of The Region Or Country You’re Exporting To:
Every region in the world has a minimum standard for the commodities that can be imported into their countries. Whether for petroleum products, agricultural products, or solid minerals, there’s a minimum standard for every nation, before moving on to the importer’s standard requirements.
Studying and understanding what is acceptable in most parts of Asia, Europe, America, and parts of Africa can be the difference between success and failure.
For instance, when it comes to spices, ASTA (American Spice Trade Association) standard is what is expected in many parts of the world, but then, there’s also the FAQ (Fair Average Quality) standard that is also accepted in other parts.
For petroleum products, many countries have a preference for commodities with low sulfur contents, and so give their required specifications.
The same applies for solid minerals as some countries only want solid minerals that have higher concentration levels to be imported into their nations so as to eliminate excessive dust and reduce global warming effects generated when trying to process low-quality minerals.
Before you commit to a specification with an international buyer, first find out what the minimum acceptable import quality is for the country and work your way up from there. Even if the buyer wants a standard lower than what’s allowed into their country, the cargo might get seized at the delivery seaport and if you have not been paid yet, you’d very likely lose your entire investment.
Always start negotiating quality standards from the minimum acceptable standards in whichever country you’re shipping to.
2). Only Contractually Agree On Realistic Specifications:
Some buyers would want the specifications of the commodity they’re purchasing to be unrealistic. And by this, it means giving ridiculous requirements for commodities where the requirement does not match the price.
Usually, these type of buyers will want to pay the lowest possible price for the highest possible quality. And when you see them, you should not go too far with the inquiry because first, their values, beliefs, and respect of other people’s wellbeing are highly questionable. They only care about themselves and no matter how much you try to please them, they’ll find a way to frustrate you.
Before you commit to any specifications, first ensure that the price of the commodity and the quality matches right, and if the quality is too tough to meet up with, then its best you simply tell them what you can and cannot do.
3). Pay Attention To The Branding, Labelling, & Packaging:
While most people pay too much attention to just the quality specifications of the product, a lot of them tend to pay far lesser attention to the area of branding, labelling, and packaging.
It’s important that you must also meet the branding, labelling, and packaging terms as agreed, else you might not get paid despite meeting the quality specifications of the product.
4). Mutually Hire The Services Of A Globally Respected Inspection Company:
Never agree to have the buyer be responsible for inspection. In the same light, the buyer should never let the exporter be responsible for inspection.
It is important that an independent inspection body is responsible for inspection so that there will be no partiality in the quality tests from either the buyer or seller side.
The same way, if you’re purchasing locally before you export to your international buyer, ensure you have a standard inspection company to carry out tests on the commodity to ensure it matches the quality specifications before you pay to them.
Some globally recognised inspection companies are SGS, Bureau Veritas, & Cotecna.
5). Have A Local Supplier Deliver To Your Warehouse Before Paying:
As an exporter, buying locally in remote communities for export could be a huge quality and security risk. And to mitigate this, one thing you could do to give yourself the best chance of shipping only the agreed specifications between you and your buyer is to give a local purchase order (LPO) to a local supplier who would then supply to your warehouse and only get paid if the goods pass the agreed specifications.
In the LPO, you’d state the agreed specifications, and if possible, issue a local bank payment guarantee to the supplier stating your commitment to pay if they deliver as per your specifications.
6). Cover Insurance:
The last important part to handle is to ensure that you cover insurance for 110% of the value of the commodity against all forms of risks that could impact the quality of the goods in transit.
When you do this and for some reason, water or any external factor affects the commodity through some means or the other far beyond your control and of no fault of yours, the insurance company would have no choice but to pay for the commodity.
What are your thoughts on how to ensure the quality of goods exported meets the agreed export standards? Let me know by leaving a comment below.
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