NAVIGATING INCOTERMS

2021: STRATEGIES FOR

SMALL ENTERPRISES IN
THE BIG LEAGUES
BY: JOSE ENRICO A. TATCO
 CONTENT
03 INTRODUCTION

04 WHAT ARE INCOTERMS?

05 CHANGES IN INCOTERMS 2021

06 STRATEGIES FOR SMALL ENTERPRISES

07 NEGOTIATION TECHNIQUES

08 CONCLUSION
 Introduction
Welcome everyone to today's presentation on
Incoterms 2021. As small enterprises,
negotiating with large firms can be a daunting
task, but understanding Incoterms can make
the process much easier. Today, we'll explore
what Incoterms are and how they impact your
business.
Incoterms are a set of international rules that
define the responsibilities of buyers and sellers
in international trade. They provide clarity and
consistency in negotiations, reducing the risk of
misunderstandings and disputes. By
understanding Incoterms, you can ensure that
your business is protected and that
negotiations with large firms are conducted
smoothly.
 What are Incoterms?
Incoterms, or International Commercial Terms, are a set
of standardized rules that define the responsibilities of
buyers and sellers in international trade transactions.
They were first introduced in 1936 by the International
Chamber of Commerce (ICC) and have been updated
periodically to reflect changes in global trade practices.
The purpose of Incoterms is to provide a common
language for traders across different countries and legal
systems. By using Incoterms, parties can avoid
misunderstandings and disputes over who is
responsible for various aspects of the transaction, such
as transportation, insurance, and customs clearance.
Incoterms also help to allocate risk between the buyer
and seller, which is especially important in cross-border
transactions where there may be greater uncertainty
and complexity.

 Changes in Incoterms 2021

Incoterms 2021 has made several changes from its
previous version, which can have a significant impact on
small enterprises negotiating with large firms. One of
the most notable changes is the replacement of DAT
(Delivered at Terminal) with DPU (Delivered at Place
Unloaded). This change was made to reflect modern
transportation practices and to provide more flexibility
to the parties involved in the transaction.
Another change that can affect small enterprises is the
requirement for the seller to provide proof of delivery.
This change was made to address issues related to the
transfer of risk and to ensure that the buyer receives
the goods as agreed upon. Small enterprises need to be
aware of this change and make sure that they have the
necessary documentation to prove delivery.

 Strategies for Small Enterprises

To successfully negotiate with large firms, small
enterprises must understand the buyer's needs. This
means researching the firm and its industry to gain an
understanding of its goals, values, and priorities. By
doing so, small enterprises can tailor their negotiation
strategies to meet the buyer's specific needs, making
them more likely to agree to a deal.
Small enterprises must also be aware of the risks
involved in negotiating with large firms. These risks
include being taken advantage of due to lack of
experience or resources, as well as being subjected to
unfair contract terms. Small enterprises should seek
legal advice and consult with experts to mitigate these
risks and ensure that they are getting a fair deal.

 Negotiation Techniques
One of the most important negotiation techniques for
small enterprises is to focus on mutual benefits. By
understanding the needs of the buyer, small enterprises
can find ways to create value for both parties. For
example, a small enterprise may offer to provide
additional services or products in exchange for a better
price or longer payment terms. This approach helps build
trust and creates a win-win situation for both parties.
Another important technique is to be prepared to walk
away from the negotiation if necessary. Small enterprises
should have a clear understanding of their bottom line
and be willing to stand firm if the other party is unwilling
to meet their needs. Walking away can be difficult, but it
can also send a strong message that the small enterprise
is serious about its position and is not willing to accept
unfavorable terms.

 Conclusion
In conclusion, it is clear that understanding Incoterms
2021 is crucial for small enterprises negotiating with
large firms in international trade. By knowing the latest
changes and strategies for negotiation, small businesses
can level the playing field and achieve successful
outcomes.
Remember to always focus on mutual benefits, be
prepared to walk away, and most importantly,
understand the buyer's needs. With these tools in hand,
small enterprises can confidently navigate the complex
world of international trade and compete on a global
scale.