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Med Industry Blog
INTERNATIONAL MEDICAL MARKETS
September 16, 2011
I recently received an email from a physician in India. He had been residing in the United Kingdom for several years and had returned to his home land. He contacted me because he was interested in developing a new business of selling and supporting pre-owned diagnostic imaging systems to facilities throughout India. His email included details of how he intended to develop this business in a rather lengthy dissertation and he wanted me to send him a catalog with pricing of the products we offer. Frankly I was amused at his misunderstanding of that market, the products and the competition. My point is that international markets are difficult to comprehend even if you reside in the market you are selling to when you are offering imported products. I introduced him to several Indian associates and provided some incite, but better yet, I developed a friendship with a person I have never met or have spoken with previously.
The world healthcare markets are developing rapidly and many systems are being imported from the United States, Australia, Europe and Japan by countries in the Middle East, Asia and Africa. Many developing countries in Africa are extremely interested in acquiring pre-owned x-ray, CT and MRI systems. Many of the organizations which require systems have very limited budgets and therefore rely on older systems from the US. Although they prefer to have newer systems, their budgets dictate 10 years old or older systems. Single slice CTs, low frequency x-ray systems and low strength MRIs are common.
There are many difficulties encountered when dealing with international transactions. The most obvious is communications. Although most buyers are able to communicate in English, often their English is rather difficult to understand clearly. This is not a criticism, it is just not their first language. The next hurdle to overcome is getting the prospect to communicate the required information. Often we get inquires requesting a price for a CT. This is like asking for a price of a car. Without knowing the preferred make, model, features, year and budget – it's impossible to provide pricing. The most important information is the budget, because regardless of what is preferred, only what is affordable can be considered. However, many international buyers believe that if they share what they are willing to pay, the price will be raised to match that amount and they will not be offered the lowest price available. They don't realize that weeks could be spent discussing details and availability of specific systems only to find out once everything has been agreed to that the system agreed upon is not within their budget. It is much easier to first establish the budget and then back into the most appropriate solution.
Like most buyers, international buyers are price sensitive. They believe that by identifying every available system reseller and pitting resellers against each other to achieve the very lowest price, that they will successfully purchase at bargain basement prices. Often they do, however more often, they purchase systems in very poor condition because there is a reason for the low price - poor condition. Although without question, price must be a prime factor in making the purchase, there also must be major consideration for the condition of the equipment. Of course cheap is good, but if the system is not functional or has limited features or requires extensive ongoing support – in the long run, it's not really cheap.
Once a sale has been consummated, other difficulties begin. First payment terms. Payments must be received in advance by electronic bank wire transfer. Credit cards, company checks, letters of credit are no longer safe means to obtain payment. Larger transactions will often be structured with a deposit payment with the order and the balance payment prior to the system shipping. Payment terms are relatively straight forward, shipping is another issue. The first step is to crate the equipment to provide maximum protection, being careful to have enough cushioning within the crate to prevent the objects from moving and/or being raddled around and creating damage. The equipment must be weighted and transportation arranged. The key to a smooth shipment is understanding the required documentation to export from the US and the correct documentation so the shipment will be allowed to be imported to the country of delivery. Generally, most shipments are allowed to leave the US if a commercial invoice and packing list is provided by the shipper. Import customs is usually not as easy. Documents of origin, engineering certificates, shipping declaration, safety documents and authentication certificates notarized by the country of import's Consulate in the US are just some of the documents that may be required.
International sales appears to be complicated and difficult, and many believe it's not worth the effort. However, as the US dollar continues to lose value, US products become more attractive to international buyers, creating demand for pre-owned diagnostic imaging systems and many other products. The world is an extremely large market and offering products to this market may have become one of the most important factors in increasing business and reducing the US trade deficit.
If you have concerns or questions about any of the issues discussed, don't hesitate contacting me, as we are involved with these projects continually.
Charles J Patti, President/CEO
NCD Medical Corporation
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