- In case, the price is workable, please submit purchase order / letter of intent (LOI) along with banking details (BCL).
- We send you full corporate offer (FCO) or Sales Contract, you shall sign and seal, then return to us.
- We issue Pro Forma Invoice along with banking details to open L/C.
- After receiving clean L/C, we will ship to the abroad within the time agreed, which would be 30 to 40 days. ?
SHIPPING DOCUMENTS FOR YOUR IMPORTING PROCEED:
- SHIPMENT ADVICE
- BILL OF LADING (B/L)
- COMMERCIAL INVOICE
- PACKING/WEIGHT LIST
- QUALITY CERTIFICATE
- CERTIFICATE OF ORIGIN (CO)
How do I pay for the products?
Most likely that you will be paying for the goods with a letter of credit or L/C. The L/C is used to protect both the buyer and the seller. Payment will be given if these documents comply with the terms and conditions set out on the letter of credit. Safeguards such as inspections of the goods, quality control, and delivery times are possible conditions added to the L/C.
L.O.I. / B.C.L.
In order to buy all Agricultural Commodities, L.O.I. must be sent to us. So we can provide a legitimate price quote.
The L.O.I. (Letter of Intent or Transaction Details) must contain the following
1. Your firm's name, address, telephone & fax number
2. Contact person's name and title
3. Products quantity and specifications
4. Contract length
5. Your target price in USD.
6. Method of packing, Bags, Bulk etc.
7. Destination Port or country
8. Shipment size.
9. Method of payment: Irrevocable L/C at sight or T. /T
10. Preferred shipping date, and
11. Confirming Bank or a letter (B.C.L.) from your Bank stating the actual buyer has or could have the financial capacity to handle the payment.
This lets our Legal Officer review the proposed L/C and perhaps make suggestions for amendments, informally, at no cost to the buyer. At this point if all terms and conditions of the L.O.I., L/C and Contract are acceptable to both buyer and Seller, a Full Corporate Offer (FCO), legally binding, is made to the buyer.
How to make payments ?
There are a number of different payment methods that can be used when you deal with us. Three mostly used are T/T payment in advance, D/P and L/C.
1. T/T payment in advance
2 .Letter of credit
3 .D/P (document against payment)
1. T/T payment in advance:
T/T means telegraphic transfer or simply wire transfer. It's the simplest and easiest payment method to use.
T/T payment in advance is usually used when the sample and small quantity shipments are transported by air. The reason why is that the documents like air waybill, commercial invoice and packing list will be sent to you along with the shipment by the same plane. As soon as the shipment arrives, you can clear the customs and pick up the goods with the documents. As it's acknowledged, T/T payment in advance presents risk to the importer if the supplier is not an honest one.
For us, T/T advance payment is required for some high-value samples (see our samples ordering policy) and small quantity order shipped by air.
To the customers who have long-standing business relationships with us, we send free samples; and for the small quantity order, document against payment is used.
It takes 3-4 days for us to receive the wire transfer made from anywhere in the world.
2. Letter of credit (L/C)
An irrevocable Letter of Credit is also an often used payment method. It is often referred to an L/C. Letters of Credit are formal payment methods that offer a lot of protection to both the parties.
A letter of credit is a letter written by the importer's bank to the exporter. It verifies that the payment will be guaranteed when the bank is presented with the concrete documents (bill of lading, and freight documents). Most letters of credit are "irrevocable" once the importer has had them sent.
A letter of credit usually includes applicant ( the importer), beneficiary (the exporter) bank, negotiating bank, specification and quantity of the goods, amount of money, loading port and destination port, shipment date, the validity date of the L/C, terms and conditions agreed by both the importer and seller, and the documents required by the importers (bill of lading, commercial invoice, packing list, insurance certificate, inspection, etc.)
The L/C payment procedure is usually as follows:
a. You (the importer) applies to open the L/C to us (the seller) through a bank who can open the L/C in your country.
b. The opening bank will inform The importer Bank that the L/C has been opened.
c. The Importer Bank will inform us that the L/C has been established.
d. We'll check all the terms and conditions listed in the L/C. If all terms and conditions are acceptable, we'll arrange the shipment within the time specified in the L/C.
e. After the goods are loaded onto the ship without any damage, the ship agent will issue the clean bill of lading to us.
f. We will submit the clean bill of lading and other relevant documents to the corresponding Bank to gather the payment. Only with clean bill of lading can you claim the ownership of the goods.
g. The Bank will send the clean bill of lading and relevant documents to your bank (the opening bank).
h. The opening bank will inform you that all documents are received.
i. You will go to the bank to make the payment to get the clean bill of lading and relevant documents.
j. with all of these documents, you can clear the import Customs and pick up the goods after the goods arrive at the destination sea port.
The typical L/C scenario takes 7 - 15 days to complete.
3. D/P (document against payment)
The exporter (we) makes shipment and sends the shipping documents to the importer's bank for collection. The corresponding buyer bank then sends the shipping documents along with a collection letter to the importer's bank, who then sends a collection notice to the importer. The importer makes payment upon receiving the notice, and only after payment does the importer receives the original shipping documents with which you can take the physical possession of the goods.
The major advantage of the use of cash against documents payment is the low cost, versus using a letter of credit. But, this is offset by the risk that the importer will for some reason reject the documents (or they will not be in order). Since the cargo would already be loaded (to generate the documents), we have little recourse against the importer in cases of non-payment. So, a payment against documents arrangement involves a high level of trust between the exporter and the importer.
To our customers who have long-standing relationships with us, for larger quantity order shipped by sea, we usually make the payment arrangement as 50% made via T/T advance payment and 50% made via D/P to expedite the whole transaction process.
There is no payment method that is perfectly safe to both the importer and supplier at the same time. But, we still have got to do business, right? So, we hold it's crucial to develop a long-term relationship with our customers based on mutual trust.
FOB = Free On Board
CIF = Cost, Insurance & Freight
FOB = (Production Cost+Profit+Expenses) + Transport to the Port of Origin Costs
CIF = FOB + Freight from port of Origin to the Port of Destiny + Insurance
So as you see CIF is including the cost of Freight, if you want to calculate it... you would do like this
Freight = FOB - Insurance ( - Other Costs if applicable) take this
ICPO & BPL
ICPO is irrevocable purchase order and it is the seller's prerogative to decide what mode of payment he wants. And if the buyer says he wants to pay by 100% TT that is fine so long as you recieve the money in your accounts before you ship the goods. Point of correction, the fact that someone has a verifiable bank account does not mean that he is not scamming you or otherwise. What you should do is ask the buyer to send you an LOI and BCL, BCL is bank comfort letter. It is a letter from the buyer's bank to the seller confirming availability of funds in the buyer's account. Even at that, you need to get your bank to verify with the buyer's bank by swift that the BCL is genuine.
On another note, a seller does not sign ICPO and send back to buyer. The procedure is that the buyer sends an LOI and BCL or ICPO and BCL, if the seller verifies the BCL, he sends an FCO which is a Full Corporate Offer signed and sealed on his letter head to the buyer, the FCO will state the availability of the product, the specifications of the product, the terms and conditions of the sales, the terms of payment and all such other relevant information. If the buyer accepts it, he will sign the portion marked as "Buyer", seal it and send back to the seller marking acceptance of the terms as specified in the seller's FCO.
The next step will be the signing of a contract in 4 originals and two copies, preferably notorised and sealed at the seller's local trade ministry or chamber of commerce. As soon as that is done and originals are exchanged by courrier or whatever such means is more convinient, the seller and the buyer will exchange POP (Proof of Product) and POF (Proof of Funds) on a principal bank to bank basis.
After which the buyer will make payment through the already agreed mode of payment as set out in the FCO and shipment will commence according to the contract.
If you follow this procedure, I doubt anybody will scam anybody. Wish you luck in your efforts