how to accept different payment term

hi,good friend.F{-~5r-X%W
Now I have a custom from Poland and he has a bad credit. L#TPTK
Now can I accept 20% deposite by TT and 80% payment by LC after 60days?@0t%q};]*h!g!EA
If I accept it,I consider to make partial shipments so I may avoid more risk. @d;{V#k(CX0[
I look forward to the best suggestions and ideals.

I am not good at this. Kindly support you:victory:

80% payment by LC after 60days is dangerous to a client who has a bad credit, I think.

[quote]Originally posted by [i]karen022[/i] at 2008-1-16 17:12 [url=http://forum.fobshanghai.com/redirect.php?goto=findpost&pid=3198608&ptid=316672][img]http://forum.fobshanghai.com/images/common/back.gif[/img][/url]
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e 80% payment by LC after 60days is dangerous to a client who has a bad credit, I think. [/quote]
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A9]r agree with you.
&\%jZM L a#[$S Why not 30%TT and 70%LC at sight?

as we know ,profits and the risk combine on the international trade.
i a!qb6X-L},E if the profits value for risk,  ?  how much profits you get?
KyG,Yz,K { as my know , the most important is control the risk in the international process. not the profits hunts.  MQs*Us;V
you hand point that bad credit he is , why you still hesitant it ?
qKQ"R!X :lol

If this customer want to buy something from me,I ask for 100% TT in advanced.:lol

Reply #1 kellylee2008's post

Two months ago we had unpleausre business cooperation.Because he said our quality was bad and)^(j#M1Vf wH
insisted on paying the rest balance after he inspected the quality.We didn't agree with him and he
#F2jW.h)Co w
Lgp'S didn't pay the rest balance until now and the containers are staying in the destination port for about
"|@Q(eut?d 3.5months.
mE[DTLAn This time he said he want to solve last problems and I gave you 20% discounts and he said he would;E6J|BkO*La,Q)|
pay rest balance for last shipments next week and I hope it can come true.
q8H,D-k"_]1L As we know,any chinese cargos have more or less quality problems.
+tL IV5b)us Any clients can not mix the payment term we ever agreed with each other and the possible quality7s$Hd,J/UA"A
problems together.right?
r~;T6p#m9xCj"L From this matter,I got some points inportant for my future orders as follow: Kp}e|0b;j9y$?
1)we must inspect the credit for the clients.If one client has a bad credit,we should insist on 100%
4K7Y ttyj(r payments by T/T before every delivery.
(I,^NTP 2)for large orders,we should make partial deliveries.
Q6o!x H3A]O 3)we can not sell our cargos to the clients required with high quality.But now more and more clientsH"v|6l*U0d
want cheaper prices to buy the highest quality cargos."`"X'J!NE@K-@S
Now it is more and more difficult for us to get orders,moreover the prices are cheaper and cheaper.

Reply #7 kellylee2008's post

For about 3.5 monthes?That's so terrible and it will need a lot of money on it,did they inspect the products before shipment?If had,then why they dont get the goods but just let them to stay at the destination port?If haven't,how do they know your products are with bad quality and reject to get the goods:o
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z+Z*tECL We only accept the payment terms as follow:
z)d#YE n One is 30% deposit by T/T once order confirmed,balance by T/T before shipment or aganinst the B/L;Nu]kZGjL*t!@
The other one is by L/C at sight.6m$`cP-Fb%@
6Sx(Wq?-t U\
We will take pictures for our customers before shipment if they cannt arrange inspection or ask their agent to check,after confirmed all the things,we will arrange the shipment and get the balance.M/r(Z@1qDU
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Towards your three points:(Y'}2ct.P
1,We should check the companys' background,credit and other informations for sure,if have bad credit,maybe we can accept 50% deposit once order  confirmed and balance before shipment,that is my opinion.9_f0Z i)T'ZBPH%{ D8~
2,I have no idea about partial shipment,allow or forbid,both ok for us.[d{4Y6V-K-z
3,Just sell what you can do,but you can also talk with your company and accept some challenge some times.;x2a;S)|\g[
I just studied from a lesson one hour ago by today,the teacher said,we are not selling the goods based on the lower price but as per your products' value,when your product become valuable and different with others in your same industry,price will not be the problem.
+]E!C.XZ{9wYQ oG3~^-fF
[[i] Last edited by lily_trade at 2008-1-16 20:54 [/i]]

Reply #8 lily_trade's post

lily, now I see that you've really learnt someting useful from  last night's " useless" lesson.:lol

Reply #9 jeff008's post

I do hate those kind of trainning lessons,but it seems i can get something from it:lol

60days , i only think if you have get understand the costomer's strenghth , and have a basic coporation before , or i think the payment term is the big problem you must discuss with him ..
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For the first -time coporation , we choose 30%deposit , and 70% must be payed when the L/C file come out ...then sent to him

Reply #10 lily_trade's post

i learn from your story ,as well ,thx...always ,support all~~~ha ...

I only accept 30% T/T ,70% before shipment .

[quote]Originally posted by [i]lily_trade[/i] at 2008-1-16 20:49 [url=http://forum.fobshanghai.com/redirect.php?goto=findpost&pid=3198722&ptid=316672][img]http://forum.fobshanghai.com/images/common/back.gif[/img][/url]%[b'}d~x
For about 3.5 monthes?That's so terrible and it will need a lot of money on it,did they inspect the products before shipment?If had,then why they dont get the goods but just let them to stay at the destination port?If haven't,how do they know your products are with bad quality and reject to get the goods:o @#ID r7k

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s8JM&z We only accept the payment terms as follow:F:U!qI7W
y
One is 30% deposit by T/T once order confirmed,balance by T/T before shipment or aganinst the B/L;
KJKeUG|'e The other one is by L/C at sight.2H
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We will take pictures for our customers before shipment if they cannt arrange inspection or ask their agent to check,after confirmed all the things,we will arrange the shipment and get the balance.(Dcp)H {$?*m

`$v0U5shr Towards your three points:PhzgmX5F9j4Z
1,We should check the companys' background,credit and other informations ... [/quote]
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an:zo\ u9DQ)mf
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yes, I agree with you very much. But now there are too few customers of us, so my boss want to do every trade.5Dk]4n2V X2aR
How can I do.

Reply #1 kellylee2008's post

if your boss prefer to do this way, then let it go... KVYWk%kR/Bt
No matter what risk or loss happen, it's not your responsibility...
]9X/w4}l qtM But for me, i would rather give up than take such a risk.. :loveliness:

In general, sight L/C and term L/C ( 60 days, 90 days or ) poses same risks and it depends on the followings factors1YL]Kh)_uQ
1) The Credit rating of the issuing bank as ultimately it is the bank making the payment not the customer. Therefore, it is important to ask name of issuing bank or L/C application form before issuing. these action not only help you to check the credit rating of the issuing bank from your own banker but also to see if term and condition of  the L/C could be met by you.rN&N[9}^
2) In general, those first class bankers, such as Citi bank, Boa, HSBC, UBS, etc are able to provide such services such as L/C  confirmation , Bill purchasing and bill discount for those L/C with terms ( 60 days for example)  issues by smaller bankers with a fee . To my knowledge, you could approach Garmen, french , dutch and UK bankers for that kind of services if  L/C is issued by eastern European bank. As to south American bank, you may approach American banks where as for middle east, HSBC or Chartered bank will be happy to help you. If no international bankers are willing to provide you with that kind of service, it is advisable not to accept the L/C regardless  at sight or terms
2Jw9Bjh!H#J"^ 3) At the end of the day, whether you could get your payment from the L/C also largely depending on your ability in preparation of L/C documents.

[quote]Originally posted by [i]bacon999[/i] at 2008-1-16 20:18 [url=http://forum.fobshanghai.com/redirect.php?goto=findpost&pid=3198711&ptid=316672][img]http://forum.fobshanghai.com/images/common/back.gif[/img][/url]
"R?u/R+e)r@ If this customer want to buy something from me,I ask for 100% TT in advanced.:lol [/quote]!CAr|
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%h)jLQ[e:cl it is possible, but only applied in small business~

Originally posted by bacon999 at 2008-1-16 20:18 FOB Business Forum:e1e9v4}&|0M1f5S2P/d2x!ZC6Tp5et[Q5c"q1m
If this customer want to buy something from me,I ask for 100% TT in advanced. &CBA Y-Z]:y&I
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agree

Have you considered the rate???? L/C?? after 60 days?? I think so high risk

do not accept this bad payment term from a bad-credit poland client~very big potential risk!

in my opinion,partial shipment is a good way to reduce your risk,in this point ,i agree with you,L/C after 60 days ,not at sight ,is more risk to suppliers,please consider and then do it,it depends on your profit.

full payment by T/T in advance...:D

Quoted from an Indian friend
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K7A I=an indian friend am disappointed. the two are DIFFERENT things altogether. )Bm&l Xg/o

&T_fJ_6{M.u - You cannot compare TT with LC. It's like comparing apples with oranges.
6\J3dW5{Fc K8q/A(pJx6_;?
- TT is a mode of payment or fund transfer, WHATEVER THE REASON. The choice can only be between TT and cash and direct credit to a bank account and cheque and bank draft and mail transfer and international payment order and SWIFT and RTGS and (so on and on and on and ...)
)lS L{ph @
b'g-}%I5V Oc - LC is a CONDITIONAL UNDERTAKING or promise (by a bank) to pay. I can't pay you for goods purchased, send money to you or you to me by using an LC! I have to use TT or a cheque or a ....or any of the foregoing!Oa/R$j2E{$d+x

}q2dV/{v!_6} Oh when. WHEN... will the difference be clear to all....WHEN....!

T/T also will cost much bank charge,but comparing to the LC ,TT is short time(at most 1week) and easy deal both of buyer and seller!But L/C is long time(at least 1month) and complex approval by bank and buyer,so much paper work between bank,buyer and seller.Most important is some buyer is not enough faith,after recieve the goods upon the good relationship with bank ,they will refuse to pay to the seller.Many factory in Zhejiang of China met this kind of buyer !!

I think it is acceptable .I always do business on L/C 90days basis with Poland customer .Of course ,my customer is in good credit.If you make all I:IgU8M/Uh"{:D
documents without any discrepency ,you can get the moeny safely .Anyway,L/C bases on Bank's credit ,right ?

There are many customers require good prices, high quality but the business should be on credit. We should never meet their fulsome requirements, whereby we ought to bear all the risks on business transaction? But it is a fact that there are many customers from countries all over the world consider that products made in China should be cheap and there are abundant supliers in China for their choice, so we should meet their needs, or else they can easly find other suppliers who can meet them well.

Reply #26 leelin851012's post

so it's a dilemma for us chinese  exporters.

Reply #27 jeff008's post

Yep! So frustrated !:(