Dear Friend,
If you're involved as a broker within the International Trade of the importing and exporting business then your ears should be perked up by now like a fox. In this article you'll be guided in the direction of avoiding pitfalls inside the bat caves of International Trade.
My intentions are to tuck you under my wing and fly you over the land mines which patiently await you. Don't get me wrong, it's one of, if not, the most lucrative businesses out there you can get involved with.
When you play the trade game right, you could reap some large rewards. Like any business trade, you have those who play by the rules and others who choose to play cut throat. Not for you to reconsider the business, but to fine tune your points and bring the unawares to your awareness.
It starts out in the sense like this; you send out an email promoting products which don't physically lay in your possession. So you act as a middleman, in your case, a "broker." For others it may be a "joker."
The point of contact here is you attempt to market a non-existing product and have to persuade buyers you actually own the inventory. Just to think hundreds of other brokers who are promoting the same inventory as you are except with a different twist.
You request for pictures as proof, part numbers, serial numbers, step codes, date code, you name it. Now a couple of days have gone by and you feel like you're making more of a solid connection and the promise to landing a deal seems greater and greater as your time strides by.
It almost feels like you're about to win the lottery. In the mean time, negotiating is taking place by the hour. More requests from the buyer are being made and now the clock has really flown by.
No deal is closed, you've invested enough time and no money has shown up on the table. Somewhere along these brokerage lines, someone has not been playing with cards dealt with from the dealer.
This can only lead into false movements or a financial setup. The buyer and seller are always stake. Nevertheless, all else fails and WHAM! You land a deal and now it's time to settle the transaction. Now, with importing goods form foreign countries, there are country laws, tax duty laws, customs rules and regulations.
Certain countries are not allowed to distribute outside of their perimeter. If they do, they can be banned from selling those specific manufacturers products.
How do I put the deal into movement such as getting paid and transferring the goods successfully? Good question.
What you want to make sure is that you sign agreements and have your legalities taken care of before any money or product is transacted.
Also, was an inspection done on the site of the goods? You must have the goods inspected, especially if you're dealing with a large quantity load. A good suggestion would be to have SGS inspection agency go and look to make sure the goods exists for you can fly by plane and see the goods for yourself.
For some, flying out the country is fun and as a result you get to travel and explore new areas with new cultures and of course generate some new business. Now, after you have your "i"s dotted and your "t's crossed you will have to go back and think about the banking terms and how they are going to be implemented. This should have been put into perspective before you stepped foot on the plane. It's a matter of reorganizing your pending transaction. By doing so, re-arrange the possibilities on how the buyer can flip the coin into his favor at the last minute.
Being able to play the role as a banker in this situation is very important. You can lose the shirt off your back if you don't comply with the banking terms properly. What I mean is this; let's say you're importing components and you set up the deal on an LC which is a Letter of Credit.
Here's the problem with just an LC;
When you don't imply an Irrevocable LC, then the buyer has a chance to override the bank agreement and implement a Piggy Back LC. This gives the buyer leverage into taking control of the transaction.
If the buyer decides to use the Piggy Back technique or even a Transferable LC which simply means he or she can have the funds transferred into someone else's bank account at any given moment. This is a complete setup trap in which you need to sidestep. I advise you to initiate a Non-transferable LC along with an Irrevocable LC to protect your neck.
Now that you've had a nibble on the ways and plays on importing and exporting goods, take the time to investigate your trade matters into further detail. There are several means of righteousness in order to complete each trade transaction into a successful one.
Sincerely,
Joseph Mercado
