Dear fellow members,

I have first order which is larger amount exceed over hundread thousand dollar order. we are new to export..buyer has interest in our products and want to pay by letter of credit. Order seems too good to be true! We want to get paid by wire transfer due to first transaction with company.Payment will be issu from China. After reading so many letter of credit forum here it scare me to accept L/C. our supplier won't ship item unless they get paid..Which one i should accept letter of credit/TT?
your advise will be appreciated..

Replying to [tradejfk]:

You said: "After reading so many letter of credit forum here it scare me to accept L/C..."

And all the while I believed that we were helping folks to UNDERSTAND what an LC was all about, and its comparative advantages - especially for the newcomers to international trade. NOT TO SCARE YOU AWAY from using an LC when required!

To reply to your question: "Our supplier won't ship item unless they get paid.Which one i should accept letter of credit/TT?"

My suggestions to a new buyer:
(a) Never to pay in advance, unless you know your supplier very well;
(b) For a new buyer, I would recommend a sight LC as the most preferred route, even if it is slightly more expensive. The next would be D/A Bills, next D/P - in the order of preference.

Replying to [Catalyst]:
hello Catalyst, thanksfor your help. let me clarify my question.. I am not scare fo letter of credit. forum i read here make me better understand what is letter of credit and other mehtod of payment is all about. AM greateful member are using knowledge based forum here which help people newcomer to export/import to expand knowledge in international market.. As per to supplier what i meant is my company won't supply goods unless they get paid for their supply.. As per to our new customer they want to pay letter of credit and combination of /T/T. what am afraid is that scam..order?Buyer want me to go there in China and sign the paper whose responsibility is that.. i invited them to visit us (we (seller).
Thanks
jfk

Replying to [tradejfk]:

My response:
(a) You'd be working on behalf of your company. The responsibility is finally of the company you work for and represent.
(b) Site visits are always better than dealing with face-less people or companies. Exchange of visits also promote better understanding and help in better decision making.
(c) Personal knowledge of your customer will help you to avoid scams.
(d) Combination of LC with part amount paid in advance to the supplier (your company) by TT is a very good option. Do make sure that you get an LC from a reputed bank, a bank of good standing.
(e) For further security, you may look for a confirmed LC, but it may cost you more, and the buyer may not agree. You may have to negotiate and convince the buyer.
(f) Frankly speaking, if the LC is issued by a good international bank, confirmation need not be insisted upon (country risks for China is practically nil).

Replying to [Catalyst]:Than you for your advice! ggod holiday and great new year !

JFK