I am having a hard time closing any deals these days because none of the buyers want to send a LOI/BCL before they recieve a FCO from our company. I want to know are there any companies that practice this: issueing a FCO from the supplier before they have recieved a LOI/BCL from the buyer. I would like to know if anyone has any solutions for this or any insight as to how to get around this.
And I have been useing a NON CIRCUMVENTION/NON DISCLOSURE CONFIDENTIAL AGREEMENT to ensure that we will not try to go around the initial contact and that is not helping either. Any agents or brokers who have some good insight please tell me something good.
Quoting from [studewood]:I am having a hard time closing any deals these days because none of the buyers want to send a LOI/BCL before they recieve a FCO from our company. I want to know are there any companies that practice this: issueing a FCO from the supplier before they have recieved a LOI/BCL from the buyer. I would like to know if anyone has any solutions for this or any insight as to how to get around this.
And I have been useing a NON CIRCUMVENTION/NON DISCLOSURE CONFIDENTIAL AGREEMENT to ensure that we will not try to go around the initial contact and that is not helping either. Any agents or brokers who have some good insight please tell me something good.
LOI terms varies, some buyer LOI include permission for soft probe into their bank account, so effectively, a BCL is not necessary. Some buyer want the LOI to bear the cost price (maybe that is one reason for the FCO).
Normally it is troublesome with BCL and may required bank administrative charges (depending on relationship with bank). Furthermore, some buyer need the FCO to trigger the bank issuance of the BCL or in some cases, bank facility.
If is a Triple A company, and indeed the PO come directly from them, I see no reason why the seller do not comply, unless you do not have their full trust.
In any case, the final sales contract and sale invoice will determine the finalisation of the sale.
Quoting from [studewood]:I am having a hard time closing any deals these days because none of the buyers want to send a LOI/BCL before they recieve a FCO from our company. I want to know are there any companies that practice this: issueing a FCO from the supplier before they have recieved a LOI/BCL from the buyer. I would like to know if anyone has any solutions for this or any insight as to how to get around this.
And I have been useing a NON CIRCUMVENTION/NON DISCLOSURE CONFIDENTIAL AGREEMENT to ensure that we will not try to go around the initial contact and that is not helping either. Any agents or brokers who have some good insight please tell me something good.
people asking for FCO without them giving a proper LOI just want to find out about the source. You must insist on a LOI allowing soft probe. The next step would be that the buyer gives his BCL so that the seller can see that the buyer indeed has the buyerpower for a certain transaction.
Quoting from [studewood]:I am having a hard time closing any deals these days because none of the buyers want to send a LOI/BCL before they recieve a FCO from our company. I want to know are there any companies that practice this: issueing a FCO from the supplier before they have recieved a LOI/BCL from the buyer. I would like to know if anyone has any solutions for this or any insight as to how to get around this.
And I have been useing a NON CIRCUMVENTION/NON DISCLOSURE CONFIDENTIAL AGREEMENT to ensure that we will not try to go around the initial contact and that is not helping either. Any agents or brokers who have some good insight please tell me something good.
Our company will lease/sell a BCL to anyone for a 1% fee. The agreement makes the two parties JV partners that allows the purchaser of the BCL to have up to 1.5 billion in POF. Contact me at: SuperiorExport@yahoo.com
Sasha
Studewood
It saddens me deeply when I see so many people all pushing LOI/ICPO/BCL type documentation around. These documents were designed by brokers for brokers. They have little use in REAL correct trading. 99.9% of deals will never complete as long as you use this type of documentation.
In correct trading you have to establish the status of each party before anything else or a deal cannot close. Are the parties you are dealing with the actual end buyer whose funds will pay for the goods? Or are they a broker? If there is an end buyer, a broker, another broker (no 2) broker 3 and end seller how do you make payment? If broker 1 contracts with end buyer and then with broker 2 who requires a Letter of credit to be transferable, a transferable L/C under ICC codes (UCP 600) can only be transferred ONCE.The deal will collapse in a heap when it gets to broker 2.
For this reason you MUST make sure the person you are dealing with is end buyer using their own funds especially if you are middleman. Only ONE party can act as Principal trader and all others should step aside. This is why so many deal fail because the chain in the transaction contains so many brokers.
When a broker asks for a BCL he is moreorless saying "show me your buyer". Most brokers do not want to disclose their buyer. Result...thousands of brokers all passing LOI/ICPOs around like confetti at a wedding getting nowhere fast!
Correct trading procedures should start with a Request for Quote(RFQ). This document will contain packaging, discharge rate at discharge port, draft in metres at port, quantity, everything. How can a legitimate seller quote a price if he does not know what type of vessel to fix.
After RFQ, seller sends a quote or asks more questions. If quote is accepted a simple acceptance letter "subject to contract" is all thats required. Then you go straight to draft contracts. You will know if a Buyer can perform because you will be requesting a pre-advised letter of credit which is not an active instrument and very cheap to issue. A bank will NOT issue a pre advice if Buyer does not have capability to pay. This is your proof of funds or BCL! The contract stage also reveals who you are dealing with. If its a broker everything will be blank..they will either not complete Buyers details or will complete their own details. This is when you can do due diligence and check the Buyer. If Buyer has no transparency, no accounts or company registration to check or issues a Pre advised L/C that has already been transferred, you are dealing with a broker. It is impossible for contract chains of Buyer...broker 1...broker 2...broker xxx.....end Seller. A transferable L/C is only transferable ONCE so is NOT a suitable instruement for multi broker chain deals. The only way is for brokers to step aside and let trader who sourced from End producer to act as Principal trader.
In this business, if you are merely a broker who has no idea how to act as a Principal trader but knows buyers or sellers, you MUST attach yourself to a trusted Principal to trade for you or you will end up in very deep trouble without sufficient knowledge to trade as Principal. Brokers are brokers..thousands and millions of them. PRINCIPAL traders are few and far between..find a good one who you can develop trust with, an expert in Letters of Credit, shipping documentation, contract law and accounting, shipping knowledge (that is what is required to be a REAL trader of bulk transactions and cannot be learned overnight) and let them trade for you and pay you an introducers commission. Otherwise you will go around the "joker broker" world issuing ICPOs, LOIs etc... FOREVER!
Good luck
Personally, I'd follow "CPA" patch, bc he seems to know the business from inside.
I have a few cat'n'dog conversations, kinda "you give as an FCO and then we'll send whatever... My source is well known producer of these products and there are lines of suppliers with delivery signed up to 5 years in advance. Some Shmoozes are trying to snatch "soft offer" and go with that "offer" and pitch potential buyers with both hands full of pure air.
When Seller says this is the procedure, how come it so difficult to understand and follow?
Secondly.
How come an ICPO's form will cost money to me (as a buyer) if the form is already supplied by seller and all seller asking isto print this stuff on my company's template. Whom do I need to pay for it? Is this is another urban legend?
Then, if I have an acct with some commercial bank, why would I need to pay to get confirmation about my currency liquidity? What kind of crap is this? Who pays for Annual Acct Statement in regular Checking Acct?
I'd understand if I BORROW under such provision (to purchase some goods) - then yes, bank may charge me. And still, bank should include this type of charges into their annual charge for such line of credit. It'sa single piece of paper for pitty sake!!!!
Quoting from [studewood]:
I am having a hard time closing any deals these days because none of the buyers want to send a LOI/BCL before they recieve a FCO from our company. I want to know are there any companies that practice this: issueing a FCO from the supplier before they have recieved a LOI/BCL from the buyer. I would like to know if anyone has any solutions for this or any insight as to how to get around this.
And I have been useing a NON CIRCUMVENTION/NON DISCLOSURE CONFIDENTIAL AGREEMENT to ensure that we will not try to go around the initial contact and that is not helping either. Any agents or brokers who have some good insight please tell me something good.
In common sense, it is nonsense as like wearing a tie before or without shirts. I agree to CPA int described.
See all the above reference to LOI, BCL, FCL, POP, NCNDA?
It's all rubbish. REAL buyers and sellers don't use those documents. They are purely the creation of junk forums
Jamie
If you want to process a deal,start of with getting a firm offer from a reliable supplier,in your offer spell out the payment method(which preferably should be L/C),get the specifications of the product,price,certificate,packaging,shipping
Armed with these look for a buyer and no LOI/BCL aren't applicable.My question to you what exactly does this LOI/BCL mean any way and what role do they play in international trade.
Send a full offfer to your buyer,if the deal is good you won't have to worry as the buyer will contact you to conclude the deal
hope that this has been helpful