New questions regarding protecting interest as trading company
Post 1 of 2
Hello All,
I have read all the forums regarding this topic and think I have a pretty clear understanding of how everything works. But we are getting differing views from different people. Let me sum up everything thus far and ask a few questions along the way.
In the past we sold a few export products as a sales agent for a factory in China and they paid us our profit after they received the funds from the buyer. This has worked well, because the orders are small and we have a good working relationship with the factory and the customer. We bring value to the situation so there is no fear of our relationship being circumvented by either the factory or the customer.
We just landed a new large customer with larger orders and we have opened a Hong Kong corporation as a trading company. We understand that we will should get a transferable L/C from our customer or open up a "back-to-back" L/C for payment to the factories. The initial deposits are being handled by T/T.
The only problem that we see so far is that the customer has selected it's own shipping company and has asked that we supply the names and addresses of the factories that we are doing business with so their freight company can make contact.
Since we will be issuing the Commercial Invoice from our trading company is this information necessary to give to the customer?
We don't want to disclose our profit amounts to the customer or to the factory. Is there a way that we can get their shipping company to accept our Commercial Invoice and B/L rather than use the one issued by the factory?
If we were using our own freight forwarder then I don't think this would be a problem but I just wanted to make sure. Also someone tells us that we need to use an export agent here in China to make sure that goods meet the specifications before leaving the port. We do on-site product inspections of all the items that are shipped to our customers but we were told that this is not sufficient since the goods could be switched before loaded onto the container. Is this really a problem and do we really need to secure an export agent here in China to help with this?
Sorry for the lengthy post. Your help would be most appreciated.
XieMao
I have read all the forums regarding this topic and think I have a pretty clear understanding of how everything works. But we are getting differing views from different people. Let me sum up everything thus far and ask a few questions along the way.
In the past we sold a few export products as a sales agent for a factory in China and they paid us our profit after they received the funds from the buyer. This has worked well, because the orders are small and we have a good working relationship with the factory and the customer. We bring value to the situation so there is no fear of our relationship being circumvented by either the factory or the customer.
We just landed a new large customer with larger orders and we have opened a Hong Kong corporation as a trading company. We understand that we will should get a transferable L/C from our customer or open up a "back-to-back" L/C for payment to the factories. The initial deposits are being handled by T/T.
The only problem that we see so far is that the customer has selected it's own shipping company and has asked that we supply the names and addresses of the factories that we are doing business with so their freight company can make contact.
Since we will be issuing the Commercial Invoice from our trading company is this information necessary to give to the customer?
We don't want to disclose our profit amounts to the customer or to the factory. Is there a way that we can get their shipping company to accept our Commercial Invoice and B/L rather than use the one issued by the factory?
If we were using our own freight forwarder then I don't think this would be a problem but I just wanted to make sure. Also someone tells us that we need to use an export agent here in China to make sure that goods meet the specifications before leaving the port. We do on-site product inspections of all the items that are shipped to our customers but we were told that this is not sufficient since the goods could be switched before loaded onto the container. Is this really a problem and do we really need to secure an export agent here in China to help with this?
Sorry for the lengthy post. Your help would be most appreciated.
XieMao
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15 Apr 2008 03:41
Post 2 of 2
Quoting from [XieMao]:Hi Xiemao,
Hello All,
I have read all the forums regarding this topic and think I have a pretty clear understanding of how everything works. But we are getting differing views from different people. Let me sum up everything thus far and ask a few questions along the way.
In the past we sold a few export products as a sales agent for a factory in China and they paid us our profit after they received the funds from the buyer. This has worked well, because the orders are small and we have a good working relationship with the factory and the customer. We bring value to the situation so there is no fear of our relationship being circumvented by either the factory or the customer.
We just landed a new large customer with larger orders and we have opened a Hong Kong corporation as a trading company. We understand that we will should get a transferable L/C from our customer or open up a "back-to-back" L/C for payment to the factories. The initial deposits are being handled by T/T.
The only problem that we see so far is that the customer has selected it's own shipping company and has asked that we supply the names and addresses of the factories that we are doing business with so their freight company can make contact.
Since we will be issuing the Commercial Invoice from our trading company is this information necessary to give to the customer?
We don't want to disclose our profit amounts to the customer or to the factory. Is there a way that we can get their shipping company to accept our Commercial Invoice and B/L rather than use the one issued by the factory?
If we were using our own freight forwarder then I don't think this would be a problem but I just wanted to make sure. Also someone tells us that we need to use an export agent here in China to make sure that goods meet the specifications before leaving the port. We do on-site product inspections of all the items that are shipped to our customers but we were told that this is not sufficient since the goods could be switched before loaded onto the container. Is this really a problem and do we really need to secure an export agent here in China to help with this?
Sorry for the lengthy post. Your help would be most appreciated.
XieMao
You can actually work with a rep company (they just deal with customs and handle monetary exchange for you) and a bonded warehouse at port to accomplish this. Just make sure your price to the customer includes this extra charge of shipment to port and rep company. Once product enters a China customs monitored bonded warehouse, there's no risk of switching product, and there's no risk of your customer finding your supplier.
Congratulationson the big deal!
Rob Bailey
17 Apr 2008 21:57
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