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To Sell or Not to Sell, That Is the Question. As competition grows, new markets in other countries become an option impossible to overlook. The challenge is not only selling to those markets, but selling on open account terms, as most competitors will be willing to do. Fear of selling to those markets is somehow justified because of the risks involved, especially the risk of not getting paid or the risk of failing to collect through court. Mexico is no exception and does present its challenges, but should you be worried to the extent of holding out and relinquishing that piece of the pie to your competitor?
Selling to Mexico on open account terms and getting paid is possible and achievable. For this you will only need a proven plan to minimize risks effectively. So the answer to the above question is that you shouldn't be worried about selling into Mexico. What you should worry about is selling with your eyes closed!
A Came Plan for Exporters
Contrary to some misconceptions that tell you it's impossible to collect in a Mexican court, I say you can, provided that you learn and follow the rules of the game for credit sales in Mexico. Sun Tzu once said: "Position yourself where you cannot lose" (The Art of War 4:3.22).
To gain this position, you have to start with strategy. Your usual credit and sales policy for domestic sales will just not work because you're venturing into another culture, a different business setting and a totally different legal system. So you have to create a game plan that will give you a strategic advantage in court should litigation be required to collect.
This game plan will essentially be to create a new credit and sales policy for Mexico, and it must include the following:
1. Proper due diligence work to accurately assess the customers' capacity, capital and character,
2. Use a credit application that includes terms and conditions of sale that will create that advantage;
3. secure proper documentation to support your sales, such as purchase orders and delivery receipts;
4. Add security to your collection by implementing guarantees, promissory notes and/or pledge agreements; and
5. Create more options for litigation by using jurisdiction and arbitration clauses...