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Quoting from BHADRESH:YOUR SELLER HAS QUOTED YOU :
FOB - FREE ON BOARD
ORC - ORIGIN ROAD/RAILWAY CHARGES(TRANSPORT)
THC - TERMINAL HANLING CHARGES
INSTEAD OF YOUR SELLER SHOULD HAVE QUOTED YOU FOT (FREE ON TRUCK/WAGON) OR EX WORKS
REGARDS
Quoting from ehd1:
A seller quoted me "FOB pricing without ORC and THC". Does anyone know what ORC and THC might stand for? Thanks.
Bhadresh,
You wrote "INSTEAD OF YOUR SELLER SHOULD HAVE QUOTED YOU FOT (FREE ON TRUCK/WAGON) OR EX WORKS" FOT as an INCOTERM does not exist anyomre. Please see INCOTERMS 2000 - ICC Official Rules for the Interpretation of Trade Terms.
Good Luck!
The answer to the author's puzzle.
"THC" stands for Therminal Handling Charges
"ORC" stands for Origin Road Charges
FOB price with out these two fee. Why the seller note this problem?
In my opinion,there are two:
First,now more and more chinese companies enter into the import and export area.Same products with hundreds of vendors but order is not enough for their company growing and demanding.So they low and lower the price. Make them profile margin very limited.
Second,Buyers(importers) reason. Now many pay more attention to the price than to the others. They enquiry many suppliers and bid the lowest price.They make the problem come out,so many company to lose interet to get the orders.
General, one cake eaten by thousands,how to share and divide?
They might even push down the price too low that you may earn 0.01
And then, they will ask for a lower MOQ with you have already set to be reduce.
So, let say you accept the deal and they are happy to pay you a 30 % deposit or sometime credit until production finish.
Then, they request you a counter sample, aprroval sample, and then finally the shipping sample.
So, you think that's the end. No, they are now asking you for a inspection before they decide if they will pay you the reamin 70% or not.
Ok, You accept the inspection because quality is very important. Then lucky if they satisfy. If not, they will take charges for the second round.
Although you can calculate your prices thousand times before you sell your products, but the true is when it come to the end of the deal and production, thing will just get out of hand!!!
Keni
Quoting fromHKGexporter:Business is very tough these days. But war or Bird flu surely are NOT the answers. Let’s be calm and take the challenge.
**** right on that
Raw materials
Equipment Depreciation
Labor
Overhead
Financing
Taxes
Profit
I believe if you're going to run a successful company/factory you have to ensure you are first class in managing each of these costs and make sure you make money on each of the elements. Prices are driven down mostly by companies/factories that are willing to compromise on one of these factors. Do you want to be thrown in with them and compete with them? If that's the case, it is an endless cycle of price wars. I do mostly OEM and I love serving customers doing OEM production, but if it ever came to the day that prices became a problem, I would just stop doing OEM and instead start designing my own products and moving along the supply chain. I'm a firm believer on focusing on what you do best and setting up strong partnerships, but extreme situations require extreme measures. You can always add value to the supply chain (add pad your margins) with better service, design, marketing, distribution and even going into retail. These will all add a buffer to your margins as long as you manage them well. If you can't do it well... oh well! Anyways, the most successful companies have done this and have control over their destiny.
Quoting from [KINGHAWK]:I am a manufacturer and exporter from Malaysia.
The pricing and selling attitudes of China manufacturers have broken up the business structure of standard practice and the mess it has caused is irreversible.
The results of price driven selling is now for us all to see. We have neglected the value of ideas and know how and priced only on cost of manufacture.The repercussions has affected exporters as well as importers.
We should hv followed the pricing policies of all the many successful western companies and they moved their selling with an organised marketing plarform. These companies priced thier products on the functional value not the cost value.
China companies dont sell brands. They supply OEMs even without a committed contract. Such that an importer, with just a computer and warehouse can endeavour to build a brand of its own with very little capital and no commitment.
All of us are in a . I really dont know how or what will clean it up. Perhaps a war is needed. At least in a war, a victory can be on sight eventually and disorder put into order. But in an economic war like this, a clear victory is not so easily defined and countries get hurt, capital is wasted, labour gets redundant, etc etc. Tears are shed instead of Blood. Its a matter of time, that a slight excuse will bring forth VIOLENCE.
Maybe, the BIRDS will come with their flu and we start all over again with a better forsight.
good idea!
Quoting from [Mono - Keni]:
100% agree.
They might even push down the price too low that you may earn 0.01
And then, they will ask for a lower MOQ with you have already set to be reduce.
So, let say you accept the deal and they are happy to pay you a 30 % deposit or sometime credit until production finish.
Then, they request you a counter sample, aprroval sample, and then finally the shipping sample.
So, you think that's the end. No, they are now asking you for a inspection before they decide if they will pay you the reamin 70% or not.
Ok, You accept the inspection because quality is very important. Then lucky if they satisfy. If not, they will take charges for the second round.
Although you can calculate your prices thousand times before you sell your products, but the true is when it come to the end of the deal and production, thing will just get out of hand!!!
Keni
Sorry Mono-Keni, but I really do not agree on yr point of view as it is way to general.
I do not know who you have been dealing with, bit I advise you to be more carefull in choosing yr business partners. As there are unreliable buyers so are there unreliable seller. I deal with several International Companies located in Europe and have to sign very well stipulated contrats when I take orders, so I expect and demand from my supplier the same commitment. We are always very clear in front about our way of payments and project planning, but I have experienced more then once that suppliers do not realize 100% what they have committed themselfs to. This gives me the inpression that they only think about fast and easy business. We really need suppliers who are able to addapt, act and think in the same way as the buyer, in what ever country he is in. That is the added value you as a supplier can give to yr business. This flexibilety will determinate wether you will succeed or not.
We need to learn carefully before making the prices. Every company have solution and calculation in details before make prices.
See the right company before orders and buy somethings