Building Trust Over Time
Street Smart Strategies
It can be difficult to get visibility on an emerging market buyer’s creditworthiness. We have seen companies go so far as to hire private investigators to try to get this information in special circumstances.
The most pragmatic way to proceed can be to incrementally build your own positive history with the company.
Start the relationship with smaller sales. Structure payments to minimize the risk, by taking as much as you need upfront to cover costs. Do not release new product until old ones are fully paid for. That way, your company is unlikely to make a loss on a transaction - only profits are at high risk.
As you build trust with the buyer, increase to larger sales over time. Building your own positive history with a buyer can be worth more than all of the credit reports in the world.
This seems like simple advice, but it can be hard to turn down a large sale because of terms. Taking shortcuts – delivering goods or services before any payment is made or other risk mitigating mechanism is put in place – can lead to tremendous frustration and loss.
Check out examples of what we have done to manage troubled situations when a foreign party is not coming through on their end of a deal. From actively managing relationships
to cleaning up a mess without going to court
, we have several strategies up our sleeves.
This is just the beginning – there are also lots of risks related to accepting letters of credit or payment in foreign currencies.
Engaging an advisor familiar with various mechanisms and strategies to manage a full spectrum of risks can help your company survive and thrive in the global business jungle.