Target Price

Target Price is the ideal transaction price that a buyer or seller hopes to achieve in foreign trade negotiations. It is usually proposed by the buyer to indicate the maximum price they are willing to pay, or by the seller to indicate the minimum price they hope to sell at. It is commonly used in inquiries, counter-offers, and contract negotiations, serving as a benchmark in price bargaining. Note: A target price is not a final quotation or a firm offer; it is subjective and exploratory and should not be directly used as the contract price. If the seller accepts the buyer's target price, it is necessary to confirm whether commission, freight, insurance, and other costs are included to avoid profit loss. Unlike a quotation, which is a formal trading condition proposed by the seller and is binding, and unlike a reserve price, which is the minimum acceptable to the seller, a target price is an expectation and is negotiable. Foreign trade practitioners should use target prices flexibly in light of costs, market conditions, and customer relationships, neither accepting them easily nor rejecting them outright, but guiding the negotiation to a reasonable range through counter-offers.