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A Taiwanese exporter of sporting goods talks with an English distributor about the possibility of becoming a commissioned agent.
Distributor : It's a very innovative design. This tennis racquet is stronger, lighter, and more flexible than other existing racquets.
Exporter : Yes, our company is the first to take the carbon fiber graphite used in rockets and apply this technology to racquets. As you know, Colin, we'd like to introduce our products to England. But our experience with English markets is limited. We're considering appointing an agent for the U.K. How would you like to be our agent?
Distributor: That might work well for both of us. Let me assure you that I'd do my best for you. I'd make sure this racquet got a good reception in the U.K.
Exporter : We'd offer you a 10% commission on all sales.
Distributor : What about buyers who don't make good on their payments?
Exporter : I'm afraid that would be the responsibility of the agent.
Distributor : What terms of payment would you offer buyers?
Exporter : The usual. 20% when the order is placed, 50% at delivery, and 30% 30 days after delivery. And a 5% cash discount.
Distributor : Would you consider both C.W.O.and C.O.D. as cash?
Exporter : I'm afraid not, since with C.O.D. orders, the money is not paid until delivery. We'd only offer a discount on C.W.O. orders.
Distributor : Then I guess you wouldn't offer discounts for prompt cash payments either. With that sort of arrangement the payment is supposed to be made within a reasonable time after delivery-usually within a few days.
Exporter : We might be able to consider that kind of payment. And perhaps we could offer some discount for that and C.O.D., but not as much as for cash.
Distributor : What about installment payments?
Exporter : For domestic purchases that form of payment is quite popular and safe for the seller. You can reclaim goods if payments aren't made. In the case of foreign trade you can't do that easily. Goods are difficult to reclaim from abroad, though, of course, I know you would use good judgment in choosing customers.
Distributor : Well, we aren't obliged to offer installment payments. We always say, A bird in the hand is worth two in the bush.