How do I protect my Interests and Commissions?
Post 1 of 11
Greetings from South India! My name is Ram and I was reading your article / post on the trade forum on Alibaba. I have a lot of enquires for goods where I'm just another player in a long chain of intermediaries. I want to be able to safeguard my interest and would appreciate it if you can offer any advice / suggestions as I'm only starting out in Ex / Im and I don't want to get burnt!
For eg.
Buyer -> Agent -> Agent -> Me -> Agent -> Agent -> Seller.
I have all the paper work to directly Import / Export. In this case would it be better for me to take out an L/C, Purchase it from the seller and sell it to the Buyer? But what if he/she backs out? I would be screwed!
Is there any other way to go about this Catch 22 sitation?And if so, who pays my commission, and who has to sign the legal documents. etc...?
Thanks,
Ram.
If you are interested in any India prouducts, I will be more than happy to help you source it!![[em17]](http://img.alibaba.com/images/eng/style/icon/emoticons_shake_hands.gif)
![[em19]](http://img.alibaba.com/images/eng/style/icon/emoticons_great.gif)
For eg.
Buyer -> Agent -> Agent -> Me -> Agent -> Agent -> Seller.
I have all the paper work to directly Import / Export. In this case would it be better for me to take out an L/C, Purchase it from the seller and sell it to the Buyer? But what if he/she backs out? I would be screwed!
Is there any other way to go about this Catch 22 sitation?And if so, who pays my commission, and who has to sign the legal documents. etc...?
Thanks,
Ram.
If you are interested in any India prouducts, I will be more than happy to help you source it!
Award 10 MVPs (
What's this?
)for the best answer.
26 Sep 2006 02:05
Post 2 of 11
Replying to [msrisc]:Essential for international safe trade is a. How well you know your Buyer? b. How well you know your seller? If both sides are Dodgy then you are stuffed! Dont even try!. Letters of credit and other instruments are only backing up the honest intention of parties. With dishonest and corrupt and greedy business people no amount of protection is going to help.
Steps to know your buyer:
1. Ask for contact details phone fax and email. Phone them at the given number.
2. Go meet them and try to understand their specific needs - even on a highly standardised product.
3. Get a detailed brief and specifications.
4. Give them a good idea of your capabilities . Dont oversell yourself.
Steps to know your seller
Same as above but ask for Bank references and trade references. If the Agent does not disclose the seller - How well you know your Agent? Are you willing to put your house on sale for the words of this person.
Last but not least - see what value you can add in the chain of transactions. If there is no value added just take an introduction fee and let the other parties who add value deal direct with each other. That way you retain friends.
Be sincere, Be Honest and Be patient. These are virtues that will stand you in good stead through life.
Best wishes and happy day to you and the readers.
Steps to know your buyer:
1. Ask for contact details phone fax and email. Phone them at the given number.
2. Go meet them and try to understand their specific needs - even on a highly standardised product.
3. Get a detailed brief and specifications.
4. Give them a good idea of your capabilities . Dont oversell yourself.
Steps to know your seller
Same as above but ask for Bank references and trade references. If the Agent does not disclose the seller - How well you know your Agent? Are you willing to put your house on sale for the words of this person.
Last but not least - see what value you can add in the chain of transactions. If there is no value added just take an introduction fee and let the other parties who add value deal direct with each other. That way you retain friends.
Be sincere, Be Honest and Be patient. These are virtues that will stand you in good stead through life.
Best wishes and happy day to you and the readers.
26 Sep 2006 04:44
Post 3 of 11
Replying To [msrisc]:What sivaras says above is quite true.
However, if you know the Buyer and Seller directly you can ask the Buyer to open a transferable LC, which you then ask your bank to transfer to the Seller. This way, the cash transactions are done through your bank, and you receive your commission.
It is always difficult if there are too many middle people involved, unless you have an iron-clad contract with them and are prepared to sue them if they don't pay you your share.
Hope this helps.
26 Sep 2006 06:20
Post 4 of 11
Replying to [msrisc]:My friend, I had a simillar situation, so decided to do what u mentioned in your post. The buyer opens and L/C in my name and I buy on his behalf., other than that I have just started over here and have not found the time to complete my profile. looking for partners in india. drop me a line.
take care
take care
26 Sep 2006 06:32
Post 5 of 11
Replying to [msrisc]:My friend, I had a simillar situation, so decided to do what u mentioned in your post. The buyer opens and L/C in my name and I buy on his behalf., other than that I have just started over here and have not found the time to complete my profile. looking for partners in india. drop me a line.
take care
take care
26 Sep 2006 06:32
Post 6 of 11
Replying to [msrisc]:I am also doing the Import and Export from China. We also depends on the comission. To save our commision we work on TT in advance. We take the 35 to 40% advance from the buyer and pay to 20 to 25% to Seller and when the product is ready then we ask to buyer to pay the leftover before shipping the container. And after taking our commision we pay to the seller. I think you can use this way...all the best
26 Sep 2006 08:05
Post 7 of 11
Replying to [alavia]:
"....looking for partners in india. drop me a line."
We are in Mumbai, India. Which products are you interested in?
Regards,
"....looking for partners in india. drop me a line."
We are in Mumbai, India. Which products are you interested in?
Regards,
26 Sep 2006 09:38
Post 8 of 11
Replying to [msrisc]:
You can do the business in a professional manner.
1. Select a seller.
2. Select a buyer.
3. Sign NCND Agreement (Non-circumventure and Non Disclosure Agreement) with both parties. That is mandatory in present situation.
(as per International Chamber of Commerce Publication 500 and above).
4. Insist your name in the ICPO, FCO, CONTRACT.
5. If you are doubtful about your commission, better get FPA (Fee Protection Agreement signed) at the time contract or before, signed by the seller or buyer whoever pays to you.
6. As soon as L/c (Letter of Credit) is established then get the FPA endorsed by the bank.
7. This way you can over come Smart buyer who wants to break the protocol.
8. Daily touch with your buyer and seller (by phone or email or Skype/yahoo phone) will make you to watch them constantly.
9. You can also moniter their movement. In the absence of mails or communication is sure way something going wrong somewhere and you can immediately block.
10. In some cases you can pre test your buyer and seller with fake buyer/seller. so that you can undrstand their position.
11. Meanwhile, have a cordial relation with your bank so that in due course of time you can handle the L/c your self. and you can make BACK TO BACK L/c.
12. If profit margin is more, then you can contact some trade finance group and take their help to handle both parties...who will be willing to help you with back to back L/c and other related matters.
13. This way you can consolidate your position in the business.
14. Also there are some buyers (like government organisation) who will be interested of materials than by passing you and going to seller directly.
15. Once you consolidate your position in the market and you will find many clients around you and you can dictate your seller and buyer because they need your service...
I wish all the best who read this mail. If any body need any expertise on International trade please write to me directly to my email id : swamypr1@rediffmail.com
I also handle trade disputes in the international trade.
with regards
Dr. P.R. Swamy
M.A.(econ).,Ph.d.,M.B.A.
You can do the business in a professional manner.
1. Select a seller.
2. Select a buyer.
3. Sign NCND Agreement (Non-circumventure and Non Disclosure Agreement) with both parties. That is mandatory in present situation.
(as per International Chamber of Commerce Publication 500 and above).
4. Insist your name in the ICPO, FCO, CONTRACT.
5. If you are doubtful about your commission, better get FPA (Fee Protection Agreement signed) at the time contract or before, signed by the seller or buyer whoever pays to you.
6. As soon as L/c (Letter of Credit) is established then get the FPA endorsed by the bank.
7. This way you can over come Smart buyer who wants to break the protocol.
8. Daily touch with your buyer and seller (by phone or email or Skype/yahoo phone) will make you to watch them constantly.
9. You can also moniter their movement. In the absence of mails or communication is sure way something going wrong somewhere and you can immediately block.
10. In some cases you can pre test your buyer and seller with fake buyer/seller. so that you can undrstand their position.
11. Meanwhile, have a cordial relation with your bank so that in due course of time you can handle the L/c your self. and you can make BACK TO BACK L/c.
12. If profit margin is more, then you can contact some trade finance group and take their help to handle both parties...who will be willing to help you with back to back L/c and other related matters.
13. This way you can consolidate your position in the business.
14. Also there are some buyers (like government organisation) who will be interested of materials than by passing you and going to seller directly.
15. Once you consolidate your position in the market and you will find many clients around you and you can dictate your seller and buyer because they need your service...
I wish all the best who read this mail. If any body need any expertise on International trade please write to me directly to my email id : swamypr1@rediffmail.com
I also handle trade disputes in the international trade.
with regards
Dr. P.R. Swamy
M.A.(econ).,Ph.d.,M.B.A.
26 Sep 2006 11:14
Post 9 of 11
Replying to [msrisc]:
Greetings
Hi, I am in the Indian Hair Wig trade. I am looking to cut out the middle man get a direct connection with someone that could supply me with Virgin Indian Hair cut from the donors own head then is used for weaving/extensions and wigs. I was wondering if you could put me in connection with anyone possibly there that may know anything about this.
Thanks in advance
lisa
Greetings
Hi, I am in the Indian Hair Wig trade. I am looking to cut out the middle man get a direct connection with someone that could supply me with Virgin Indian Hair cut from the donors own head then is used for weaving/extensions and wigs. I was wondering if you could put me in connection with anyone possibly there that may know anything about this.
Thanks in advance
lisa
27 Sep 2006 00:27
Post 10 of 11
Replying to [msrisc]:
Its very nice answer by Dr.
well here i wud like to oin point one thing....like there are several buyers from middle east etc.or some similar countries they act as dumb often.They have no idea about any specific documentation how t o deal with them.....they are sometimes very potential buyers however...
Its very nice answer by Dr.
well here i wud like to oin point one thing....like there are several buyers from middle east etc.or some similar countries they act as dumb often.They have no idea about any specific documentation how t o deal with them.....they are sometimes very potential buyers however...
27 Sep 2006 08:45
Post 11 of 11
Replying to [msrisc]: Ram, the very basics of international trade suggest that enough measures should be taken for transacting both goods and money.
It wont be wise enough to conduct an international trade in the conventional domestic way. There are many more risks that need to be taken care in an international transaction, like Forex and credit risks. If the exchange rate or the order changes while you buy locally and sell it, you may incur losses.
Always ask for payment through Confirmed irrevocable LC, so that the money is in safe hands. You can open Back-to-back LC in the favour of your supplier, so that the real buyer name is never exposed. If you trust the supplier that he wont go ahead and bypass you, then you can also ask for a transferrable LC where the balance payment apart from your commission goes directly to the supplier.
You can also get the LC forfaited so as to get an early payment.
The middlemen can add value in terms of services they offer, and thats what makes the difference, even if your prices are higher than the peers.
It wont be wise enough to conduct an international trade in the conventional domestic way. There are many more risks that need to be taken care in an international transaction, like Forex and credit risks. If the exchange rate or the order changes while you buy locally and sell it, you may incur losses.
Always ask for payment through Confirmed irrevocable LC, so that the money is in safe hands. You can open Back-to-back LC in the favour of your supplier, so that the real buyer name is never exposed. If you trust the supplier that he wont go ahead and bypass you, then you can also ask for a transferrable LC where the balance payment apart from your commission goes directly to the supplier.
You can also get the LC forfaited so as to get an early payment.
The middlemen can add value in terms of services they offer, and thats what makes the difference, even if your prices are higher than the peers.
28 Sep 2006 23:21
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