I am a trader dealing with seller (manufacturer) in one country and buyer in another country. The buyer issues a transferable LC to my company and I pay the manufacturer and keep my commission.
This time the product that I am selling is custom made to order and it take 6 to 8 months to manufacture, the buyer and seller agreed on schedule payments based on achieving specified level of completion. What kind of LC do we need? And how does it work? Thanks
Quoting from [1205878]:I am a trader dealing with seller (manufacturer) in one country and buyer in another country. The buyer issues a transferable LC to my company and I pay the manufacturer and keep my commission.
This time the product that I am selling is custom made to order and it take 6 to 8 months to manufacture, the buyer and seller agreed on schedule payments based on achieving specified level of completion. What kind of LC do we need? And how does it work? Thanks
That would be an L/C with a red clause. This clause can direct the bank to make payouts for material costs or other costs you deem neccessary. have the buyer talk to their bank about the specifics and added costs relating to the red clause L/C.
Ranger
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Quoting from [1205878]:May I ?
I am a trader dealing with seller (manufacturer) in one country and buyer in another country. The buyer issues a transferable LC to my company and I pay the manufacturer and keep my commission.it is custom made to order, take 6 to 8 months to do it, the buyer and seller agreed on schedule payments based on achieving specified level of completion. What kind of LC do we need? And how does it work? Thanks
Continuing Mr Ranger " Red Clause L/C" .... that allow you to take part of payment upon
the full amount of the order. In Advance as Down payment.
Other than it, The must said in buyer's L/C are 2 points:
- PARTIAL SHIPMENT ALLOWED (e.g.: into 4 shipment parties) in 5/100 more or less.
- L/C is payable in (as agreement ) : perpetual payment into 5 consecutive payment :
1. when 25 % of the total order had been delivered/shipped out
2. when 50 % of the total order "
3. When 75 % of the total order "
4. When 100% of the total order had been shipped out.
Those partial shpment and payment are also can be arranged in 3 or 5 etc Up to both
You and Buyer agreement !
Better for you both, to make a contract of sales/purchasing clearly before open the L/C.
regards,
Quoting from [1205878]:I am a trader dealing with seller (manufacturer) in one country and buyer in another country. The buyer issues a transferable LC to my company and I pay the manufacturer and keep my commission.
This time the product that I am selling is custom made to order and it take 6 to 8 months to manufacture, the buyer and seller agreed on schedule payments based on achieving specified level of completion. What kind of LC do we need? And how does it work? Thanks
Thank you for your help, that was very good.
Quoting from [1205878]:You are welcome 1205878payments based on achieving specified level of completion. What kind of LC do we need? And how does it work? Thanks
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