Episode eleven How much does it cost?

The negotiations between the parties were resumed at Eurosport head office on Friday. The owners of Eurosoprt decided to buy the first lot of goods from Dynateam Innovations and were eager to discuss prices and terms of payment with John Boden.

Dmitry: _John, let's get straight down to business. We like your products, we like you and we'd like to take first step. We have been thinking of purcha­sing some T-shirts and sports shoes from you. Of course, the initial lot should not be very large. According to our estimations the optimum size of the first lot is in the range of 3500-5000 items.

John Boden: Are you talking about sports shoes only?

Din itry: Both shoes and T-shirts. We understand, it's а small lot, but if we sell the merchandize quick­

1у, you'll get а larger order very soon.

John Boden: No problem. I don't think you'll have any problem selling the primary lot. Our products are first class and your sales force know their business.

Vitaly: Let's have another look at your price lists.

John Boden: ОК. Our current price list quote c.i.f. prices Helsinki. We offer very fair prices.

Vita Iу: I agree they are quite reasonable when we speak about the European market and а separate lot. But we expect you to be more flexible knowing that we are interested in long-term cooperation on regular basis.

John Boden: We always try to meet our partners half way. We give loyalty discounts to firms with whom we have а long association.

Vitaly: But we are just starting our cooperation. Are you prepared to grant us а discount now, say а dis­count of 7% for the beginning.

John Boden: It is possible. We offer quantity discounts for orders of тоге than 5000 items. So, if you order 5000 items, you'll get а 7% discount.

Dmitry: Sounds good. It will help us develop our market.

Vita Iу: 1t would be great to receive the first lot in а month's time.

John Boden: I до not like to make promises, but I think we сап deliver by December ₁st Аnd we'd like you to prepay the entire shipment.

Vitaly: John; we are willing to place an order with Dynateam, but we must ask you to consider making its а more favorable offer. Why don't we consider open account terms.

John Doden: I am afraid we are not ready to grant this facility. Му experience tells it's too risky. After college graduation I worked for а company selling mirrors. We signed а contract with а buyer in Malaysia. We agreed upon to open account. At first everything went we1L The lots were small and the payments prompt. After а year, the com­pany in Malaysia placed а much bigger order with us. We shipped it and did not get any money. Be honest, I am not very enthusiastic about open account terms.

Dmitry: Live and learn. Then I suggest payment by 30-day bill of exchange, documents against acceptance.

John Boden: That is а possibility. 1 let you know immediately after ту return to the States.

BUSINESS VOCABULARY

Association Сотрудничество

Bill of exchange (переводной вексель), тратта

Discount Скидка

Loyalty ~ ~ старым клиентам

~ of 5% ~ в5%

Quantity ~ ~ за количество

Grant а ~ v. предоставлять ~

Deliver v. доставлять

Documents against acceptance документы против акцепта

Lot партия

First ~ первая ~

Initial ~ - (перво)начальная ~

Large ~ большая ~

Optimum size ~ ~ оптимального размера

Primary ~ первая ~

Separate ~ отдельная ~

Small ~ маленькая ~

Offer Предложение

Favorable ~ Выгодное ~ Open account Откры тый счет Order Заказ

Place an ~ v. Разместить ~

Prepay v. • Осуществить предоплату

Prepayment Предоплата

Price Цена

Fair ~ Приемлемая (умеренная) -

Reasonable ~ Разумная ~

Quote а ~ v. Назначать ~

Price list Прайслист

Ship v. Транспортировать, отправлять

Shipment Погрузка, отгрузка, партия

How much does it cost? Review

1. The owners of Eurosport decided

а) not to buy from Dynateam Innovations

b) to buy the first lot of goods from Dynateam Innovations с) to contact another supplier of sports goods.

2. The Russian partners have been thinking of purchasing а) golf clubs

b) fishing rods

с) sports shoes.

3. According to Vitaly's estimations the optimum size of the first lot is in the range of

а) 350-500 items

b) 35 000-50 000 items

с> 3500-5000 items.

4. John Boden was convinced that their prices were а) dumping

b) fair

с) fancy.

5. Dynateam gives loyalty discounts to

а) firms with whom they have а long association b) domestic suppliers

с) firms that place big orders with them.

б. John Boden finally agreed to а) 17% discount b) 70% discount с) 7% discount.

7. John Boden was convinced Dynateam would be able to а) deliver T-shirts by January 1^st b) deliver shoes by December 1^St с) deliver the first lot by November 1^st,

8. John Boden insisted upon

а) open account b) full prepayment

с) documents against acceptance.

9. After college graduation John Boden а) worked in Malaysia

b) worked for а company that had а branch in Malaysia с) worked for а company that sold mirrors to Malaysia.

10. John Boden promised to give his final answer regarding the terms of payment

а) next morning

b) in а week's time

с) upon arrival to the stat_es.

Your own business

Do you offer any discounts to your customers? What discounts до you offer to your customers? Which methods of payment are most common? Which methods of payment до you use? Do you always pay promptly?

• Recollect your latest price negotiations with you supplier/buyer?