Company Name:
Lishui Huanqiu Bearing Trading Co., Ltd.
Company Address:
No.11 Shiting Road, Shuige Industrial Zone,Lishui, Zhejiang,China
Contact Person: William
Email: admin@tradebearings.com
Homepage: www.asiabearings.com
Bearing B2B: www.tradebearings.com
Envy Performance Limited exports spare parts for performance cars to customers in more than 40 countries, and overseas trade accounts for around 15 per cent of its turnover. As specialists in the field, the business sells to both trade customers and private enthusiasts across the globe, so protecting its interests when exporting has been essential. Director Gareth Walker explains how they do it.
What we did
Assess our options
"When you're sending consignments across the world, problems are inevitable. Once a month or so, we have a package that goes missing or gets damaged in transit. It became clear that the standalone marine insurance policy we originally took out wasnot the best option for us. We were having to claim quite regularly and the premium became increasingly expensive.
"In the end, we decided to use the insurance provided by our couriers instead. This means we pay a flat-rate charge on each consignment rather than an annual premium, making it easier to budget. And if we do have problems with damaged or missing consignments, it is faster to deal with the courier than an external insurer."
Consider currency fluctuations
"We are very affected by changes in exchange rates as we buy much of our stock from Japan. For example if the US dollar strengthens it can be cheaper for our US customers to buy direct from Japan. But when sterling is strong and the dollar is weak, buying ahead will play in our favour as we can buy more stock at an advantageous rate and it is more cost-effective for US customers to buy from us rather than going direct.
"We havenot done it yet, but in future when currency markets are moving the right way for us, we will try and take advantage and protect our overseas business in key markets this way. We have space to take on the extra stock should we need to, so it should be simple to do.
Tighten up credit arrangements
In the early days, we operated quite a few credit accounts with overseas customers. Many of them were quite high volume and we lost quite a few thousand pounds when some of them went bust. Ultimately we decided to remove our account service. We were open and honest with our customers as to why we were doing it and most of them understood.
"Almost everything we do now is on a pre-paid basis. We are also very careful with our credit card transaction processing. We get a fair degree of protection from Barclays Merchant Services which we use for our card transactions. For an additional £10 a month, we have a terminal that allows us to undertake address verification on card transactions, which has given us significant peace of mind. Since we've started doing this, we have only had two chargebacks - and both of those were from the UK, not overseas.
What I'd do differently
Buy ahead when exchange rates were more favourable
We do as much as we can to protect our interests, but the strengthening of the US dollar has meant that we will definitely buy ahead when sterling is strong in the future. A stronger dollar made our US business slightly more difficult for a few months, until the position eased again. But we wonot allow ourselves to be in the same position again.
