Establishing and Importation Business

In your travels you found a pottery maker in Tanzania that produces hand crafted and brightly colored fired clay pots that you are interested in importing to the U.S.You feel confident that the pots will sell as useful, colorful, and functional kitchen works of art.Your discussions with the local owner of the business about supplying the pots for the U.S. went well and she seems to be eager to provide the product for the U.S. market. The producer mentioned that she could fill any relatively large order for shipment within a week at the unit price agreed upon.If the order needs to be shipped sooner a 10% price premium will be added. You estimate that the average weekly transaction with the pot makers is 200 per week at 45,206.67 TZSin terms of the Tanzanian Shilling (TZS)or ($19.50 U.S. dollars) wholesale for each pot bringing 9,041,549.49 TZS ($3,900) each week to the Tanzanian producer. You expect the pots to sell very well in the U.S. with an 80%mark up.

1) Did the stability of the Tanzania Shilling exchange rate factor into your decision to import from them? In addition, there are rumors that the Shilling (TZS) may increase in value relative to the dollar within the next month from 1/100 of a cent to 2/100 of a cent.

2) What should you do to protect your sales agreement if the shilling is increased in value relative to the dollar?