It is not difficult for us to imagine and understand that international trade is indeed a risky business. Bulk goods and money are exchanged internationally. The languages ​​of different countries are different, the laws are different, the miles are thousands of miles apart, the transaction has not even met, and the transaction takes a long time. The business field was originally a battlefield for intrigue, not to mention the distant and strange customers.
If you buy a watermelon like a vegetable market, it is naturally convenient to hand over the money. However, even if the technology is developed, the goods need to travel at sea for more than 20 days or even more than one month. Similarly, it is not surprising that a sum of money has been transferred from a foreign bank to a domestic bank for a few days to a half month. In this way, buyers and sellers of international trade will naturally be quite suspicious.
As a seller, first of all, I was worried that the buyer had booked the contract, but when it was not, the goods were not available. It should be noted that the general transaction volume of international trade is quite large, and the sellers have to pay for the goods in a timely manner. In the event of a breach of contract by the buyer, a large amount of goods can be a headache in the hands. What's more, many times the goods are customized according to the buyer's requirements, and it is very troublesome to resell others. Secondly, after worrying about delivering the goods to the buyer, the buyer delayed the payment or even the debt. After all, shipping costs are high. For example, a 20-foot standard container is shipped from Shenzhen to a European port. The one-way shipping charges are far more than 10,000 yuan. That is, you can keep the goods from being cheated, and the round-trip freight can't be eaten. Because of these concerns, the seller naturally hopes that the buyer can pay a part of the deposit advance payment after signing the contract, or settle the payment before delivery.
As a buyer, there is concern that the seller cannot deliver on time, quality and quantity. At the same time, it is not willing to hand over the payment to the seller in advance, and the use of funds will affect the business turnover; secondly, in the event of a flaw in the seller, it is difficult for the buyer to recover through thousands of miles. Therefore, contrary to the seller, the buyer naturally hopes to deliver the goods first and check the correct payment.
Of course, in theory, there are international trade practices. There are arbitrations and laws. But businessmen know that it is not a last resort to go to court. It is really hard for the people and the people to fight for a crime. In addition, most of them are limited liability companies nowadays, and it is easy to register a company to play. What are you going to do? In the final analysis, the headache of international trade is a "credit." The problem of goods and money is difficult to negotiate through the commercial credit of both parties, especially those customers who have just been in contact for a long time.
How to do? Find a guarantor in the middle. Who are you looking for as a guarantor? Looking for a bank. Why are you looking for a bank? Because the bank has money, the strength is more trustworthy, and things can be afforded. Moreover, the management and requirements of banks in the world are generally relatively high. Knowing the roots, unlike the ordinary limited liability companies, they say that they ran and ran, which is relatively safe and secure. Therefore, a unique approach has been formed in international trade: after the buyers and sellers negotiate the transaction, the buyer will come forward and list the contents and requirements of the transaction, such as the name, quantity, quality requirements, amount, delivery date, etc. Hand over to a bank (usually the buyer's bank), ask the bank to act as a guarantor, and open a certificate to the seller under these terms. As long as the seller delivers on time, quality and quantity, the bank supervises the buyer's payment.
Because the buyer itself opened an account at this bank, or paid a certain margin, the collection under the supervision of this bank is very secure. Conversely, for the buyer, there is no need to pay any advance payment before the seller delivers, and if the seller fails to deliver the goods in time or fails, the payment can be refused and it is safe. Both parties are happy. In this way, the commercial credit between international traders is guaranteed by the bank. The document that proves "credit" is the legendary "letter of credit", the full name of English is LetterofCredit, and the jargon is L/C. There is a key factor in this, which is the characteristics of the foreign trade “document trading†mentioned in the previous issue. A set of documents is used to represent the goods, which makes the operation between the buyer and the seller and the bank possible. In the letter of credit, detailed provisions are made as to which documents are required to represent the goods. When the seller delivers the set of documents representing the goods to the bank in accordance with the agreed delivery deadline, it is equivalent to handing the goods to the bank. Banks do not need to go to the warehouse to inspect the goods, only need to test the set of documents. If the document meets the requirements, it means that the delivery is qualified and the payment must be made to the seller.
It can be seen that for the letter of credit, the document is a core part. The main content of a letter of credit is precisely the stipulation of documents. Including which documents are required, how many copies are required for each document, who will issue the documents, when they will be issued, and even how the words on the documents are expressed in detail. Such a cautious approach is to enable the document to accurately reflect the cargo itself and the delivery process to a greater extent, and to limit the possibility of seller fraud.
Is the letter of credit a trick?
The letter of credit is simply a thing that lists the terms of the transaction, and the bank is centered as a guarantee. After the seller obtains the letter of credit, it is required to deliver the goods in accordance with the requirements of the letter of credit and prepare all the documents stipulated in the letter of credit. By handing it over to the bank, you can get the money safely and smoothly.
Our Hand Spiner with 3-5Minutes--steel or Ceramic Bearing, good quality R188 steel or Ceramic Bearing-changeable, Quiet when spin, no noise, help you to calm down. So great For Anxiety, Focusing, ADHD, Autism, Quitting Bad Habits, Helps Relieve Stress,also effective for Focus and Deep Thought through the Different Play. The size is easy to carry and you can put it in your pocket. Choose the one you like, and we also can do custom-made.
Spinner Hot Toy,Fidget Spinner Toys,Hand Spinner Toys,Spinner Aluminium
Ningbo Yonghuai Import And Export Co., Ltd. , http://www.nbgoldenshine.com