SMEs selling overseas face the difficult task of getting potential clients to trust them to the same degree as competing local suppliers.
The potential client knows how to enforce their rights with a local supplier by use of telephone, local reputational pressure and ultimately the local court system to ensure they get what they were promised from the supplier.
But when buying from an overseas supplier (even if the supplier is based elsewhere in the EU), the potential client faces fear, uncertainty and doubt in buying from a foreign company.
So how can you give your salesmen a leg-up when they are selling to overseas companies ?
Clinch the sale by giving a guarantee that the potential client will receive everything they were promised or their money back, by selling through escrow.
Escrow is the process where once conditions are agreed between the parties, payment is made to a secure third party who holds the payment and then either passes the payment on to the seller or back to the buyer, depending on fulfilment of the agreed conditions. Escrow is the only method where both the buyer and seller can both be simultaneously protected.
By utilising an FCA authorised escrow company (at low cost, often from under €10), you can achieve the following two benefits when selling overseas:
- an absolute guarantee to your clients that they will receive everything they were promised or their money back – this guarantee offers a hugely valuable marketing advantage to new exporters, allowing them to gain new overseas clients who would not otherwise trial the exporter. Expect your salesman to be demanding use of this tool.
- At the same time, you instantly eliminate bad debt and debt chasing entirely, as by using escrow your are guaranteed to be paid 100% in full by the overseas client automatically every time. So eliminating your risk when selling overseas.
UKTI (UK Trade & Investment) and the Metropolitan Police (see here) both endorse the use of FCA authorised escrow to protect both the buyer and the seller in a transaction.
When selling overseas, not only can you guarantee that you will get paid without problem, but you can give your company an advantage over and above local competitors by guaranteeing that your target customer will receive what they were promised and require.
For those SME exporters who do not wish to utilise a Letter-of-Credit (similar protection at much greater expense), give your salesmen the tool of escrow to allow them to bring in sales in new markets.