Hi Mr Nambi


I understand that there are LC and bank instrument to ensure payment of goods, but in such turbulent economic situation, transaction with big MNC or big corporation does not guarantee that they will ensure prompt payment and full payment.


It is difficult to judge when a bank will to collapse, and thus what about the big MNCs and small companies.  Trading profit margin is usually via volume, and 10% margin is considered a lot base on today product competitiveness and globalization, and a simple delay in payment or refusal of payment will cause major problem for small companies and manufacturers.


First question:

1. How can we minimize risk to the minimum or even to no risk at all?

2. How can we reduce the cost of transaction in such turbulent times?

3. Cost is rising and profit is thinning, How can the manufacturer as a whole break out from such a phenomenon of global competition and rising cost?


thank you

Quoting from [francis teo]:


Hi Mr Nambi



I understand that there are LC and bank instrument to ensure payment of goods, but in such turbulent economic situation, transaction with big MNC or big corporation does not guarantee that they will ensure prompt payment and full payment.



It is difficult to judge when a bank will to collapse, and thus what about the big MNCs and small companies.  Trading profit margin is usually via volume, and 10% margin is considered a lot base on today product competitiveness and globalization, and a simple delay in payment or refusal of payment will cause major problem for small companies and manufacturers.



First question:


1. How can we minimize risk to the minimum or even to no risk at all?


2. How can we reduce the cost of transaction in such turbulent times?


3. Cost is rising and profit is thinning, How can the manufacturer as a whole break out from such a phenomenon of global competition and rising cost?



thank you

The following are only broad guidelines for mitigating risks

1) Choose the issuing Bank as a seller.

2) Minimise the No of Documents to be submitted against LC for negotiation purposes.

3) Get  LC confirmed by another Bank who can be your advising Bank.

4) Proper Due diligence on the buyer and his bank is a must bewfore agreeing upon payment mode.

5) Get the draft LC accepted by the bank which is negotiating.

Hope this will help.

Thanks

R S Nambi

CEO

Tejasve Exports

 

 

Quoting from [francis teo]:


Hi Mr Nambi



I understand that there are LC and bank instrument to ensure payment of goods, but in such turbulent economic situation, transaction with big MNC or big corporation does not guarantee that they will ensure prompt payment and full payment.



It is difficult to judge when a bank will to collapse, and thus what about the big MNCs and small companies.  Trading profit margin is usually via volume, and 10% margin is considered a lot base on today product competitiveness and globalization, and a simple delay in payment or refusal of payment will cause major problem for small companies and manufacturers.



First question:


1. How can we minimize risk to the minimum or even to no risk at all?


2. How can we reduce the cost of transaction in such turbulent times?


3. Cost is rising and profit is thinning, How can the manufacturer as a whole break out from such a phenomenon of global competition and rising cost?



thank you

hello,everyone ,this question is everybody thought about,many people want to change it ,to improve our profit,to get payment on time .but sometimes we can't do anything for it ,maybe this is outline foe the whole intrusdy.

Cost is rising and profit margin is thinning and competitor is lowering the price, How can the manufacturer as a whole break out from such a phenomenon of global competition and rising cost?



Fighting in the global market will mean adhering to the competition pressure, and rising external prices, and we as manufacturer are suffocating especially small manufacturers.



Retailers can increase their retail price to increase their profit margin...


Wholesalers can increase the wholesale price,


But Manufacturer are stuck with prices as per say... due to contractual dedication.


But raw material cost is increasing, transportation cost is increasing...



3 years ago, 1 million usd sales revenue is equivalent to 100,000 USD profit margin... or even more.  Now with the increasing cost, our margin is reduce to 30,000 USD or less.



Crazy government policy requires manufacturer to pay more tax with the number of years.


trademark policy increase the trademark costing. and patent costing also increase over the years... 



What is the ways to break out of this vicious cycle of  decreasing profit margin? 


Any solutions or channel that we can seek help from?

Quoting from [francis teo]:


Hi Mr Nambi



I understand that there are LC and bank instrument to ensure payment of goods, but in such turbulent economic situation, transaction with big MNC or big corporation does not guarantee that they will ensure prompt payment and full payment.



It is difficult to judge when a bank will to collapse, and thus what about the big MNCs and small companies.  Trading profit margin is usually via volume, and 10% margin is considered a lot base on today product competitiveness and globalization, and a simple delay in payment or refusal of payment will cause major problem for small companies and manufacturers.



First question:


1. How can we minimize risk to the minimum or even to no risk at all?


2. How can we reduce the cost of transaction in such turbulent times?


3. Cost is rising and profit is thinning, How can the manufacturer as a whole break out from such a phenomenon of global competition and rising cost?



thank you

This is usual phenomena in business. I think it's better to find more clients and cheaper suppliers.  And sometimes just need to balance ourselves and face the difficult time.

Over the years, with FMCG products are competitive, and it is more on building the brand and brand management that will fight off low cost competitors.

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