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Network
Marketing - The Ultimate People's Business
The following article aims
to assist would-be businessmen and beginners who intend
to promote and sell their products or procure their
stock in trade, capital assets, to or from the international
market, respectively.
IMPORTATION:
1. Register your business and ensure
that all licenses and other legal requirements have
been complied with.
2. Obtain a list of suppliers dealing
in the products you wish to import and select the most
dependable. Do a comprehensive research on the industry.
This can be done with the assistance of your bankers
through their correspondents overseas.
3. Obtain a pro-forma invoice or firm
offer from your selected supplier. Make sure that their
quotation includes, among others, the terms of shipment
such as FOB, C&F, or CIF. Payment for imports can
be done in the following manner:
a.) By Letter of Credit (L/C) - Once
you have agreed with your supplier on the pricing and
other terms and conditions of your purchase, open a
letter of credit with your bank. Depending on the agreement
with your supplier, the L/C can either be sight or usance,
revocable or irrevocable, confirmed or unconfirmed.
Under a sight L/C, payment for the goods are made upon
presentation of the documents from the supplier through
your bankers (which is commonly the L/C opening bank)
regardless whether or not you have received the goods
imported. Under usance L/C, payment is made at a later
day, after 30, 60, 90 or 120 days. A revocable L/C is
one which you can revoke even without the consent of
your supplier. A confirmed L/C is one by which the L/C
advising bank, by virtue of their confirmation of the
L/C, is liable to pay your supplier the value of the
imported goods should the L/C opening bank be unable
to pay your supplier for some reason.
b.) By Open Account (O/A) - Payment
is made at a later date depending on your agreement
with the supplier.
c.) By Documents Against Payment (D/P)
- Under this mode of payment, you have to effect the
payment of the imported goods upon presentation of the
import documents by the bank.
d.) By Documents Against Acceptance
(D/A) - Under this mode, the documents are forwarded
to you through an appointed bank in your locality and
upon your acceptance, (i.e. signing the relative document
signifying your acceptance of the liability) the bank
then surrenders the documents to you, and payment will
be made later, after 15, 30, 45 or 60 days depending
on your agreement with the supplier.
e.) By Prepayment - Advance payment
must be made before supplier ships the goods
Note that the basic import documents
consist mainly, but are not limited to, original Bills
of Lading (B/L) or Airway Bill; original Commercial
Invoice; original Packing List; or any such other original
documents which you may require. These documents are
necessary so the importer can secure the release of
the imported goods from the shipping/airline companies
and customs authorities.
EXPORTATION:
1. Register your business ensuring that
all requirements have been complied with.
2. Choose the products that you are
going to export and ascertain from the difference governmental
agencies that these are not banned items. Where necessary,
obtain a list of all the documents that are required
especially for regulated products. If you produce or
manufacture your own products for export, know your
production capacity. If you subcontract the production
of your goods, know the production capacity of all your
subcontractors.
3. Open an account with a bank with
international connections or one with correspondents
in the locality of your customers.
4. Where necessary, obtain a background
check of all your would-be customers through the aid
of your bankers.
5. From new buyers, always insist on
prepayment before you ship your goods.
6. If you agree on payment by Letter
of Credit (L/C), ensure that the L/C is irrevocable
and at sight.
7. Try to understand the different modes
of payment for international trade, as discussed above,
under Importation.
This is a simple step-by-step guide
on import and export procedures. While requirements
may vary from country to country, the general and basic
procedures are essentially the same.
1howto.com
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