Promotion
Firstly before exporters or manufacturer export their product to another country they usually make some promotion through any media such as advertisements in newspapers, magazine, or through online by putting the ads in website that well know and having high traffic like Google, Facebook and so on. Occasionally the promotions do by exhibition or by governments directly in an expo or sometimes through the embassy.
Letter of Inquiry.
After one or more buyers interest to the product can be produced by exporter then they send a letter of inquiry which having the contents price and any specification of the goods involves the styling, the quantity will be ordered, delivery time, and the details of transport line. But the most shippers do in getting an order is though a third party or a buying agent. Buying agent will proactively looks for some manufacturers who can provide or produce the products buyers want to. Buying agent usually takes some sample to show to some manufacturers or shippers and ask them whether they can produce the same product or not. Then manufacturers will try to make the same product as the sample to show buyer to get their comment to the sample.
Offering the price
After buyer has approved the sample made by a manufacturer, manufacturer or exporter will automatically sends their price offer base on the sample made up. Manufacturer will calculates based on row material consumption, transportation fee or all importation charges in case the row material will be imported from another supplier from another country, and production charges. Buyer or sometimes traders will directly review shipper's price offer and will compare to the bottom price buyer decided. Occasionally, buyers or traders will compare with another shipper who sent the same sample in considering best quality and the lowest price offering. Some years ago, we have ever made a business relation with a buyer, they always sent their design to many manufacturers who can make the same sample that sent by the buyer or their agent. Then they took the lowest price from various manufacturers offering or mostly they done this by like a tender, they putted a very low price then manufacturers sent or submitted their reasonable price they could offer. This buyer type doesn't pay our goods quality, they always think a high benefit.
Order Sheet.
Order sheet or sometimes called purchase order. The contents consists style number, purchase order number, row material, description of the goods, quantity, price, payment term, shipment mode, destination or port destination, and final destination.
Sales Contract Process.
Sales contracts made by exporter based on order sheet and offer sheet, all important things that are mentioned on both offer sheet and purchase order or order sheet are should be mention on sales contract, too. You may put the additional conditions if any on the sales contract. Such the additional condition commonly put down, the tolerance of over and short quantity, insurance, transshipment, and many other you need to put down on the order sheet. Both buyer and shipper have to put their authorize signs on the order sheet. However, in business practice, with using email they only send and receive order sheet to be agreed by both side without sending the original order sheet and sometimes they did not put down their signs anymore. In the other hand, in our business practice with one of our buyer this is enough by sending the importer Proforma Invoice to check and confirm and buyer has assumed that this is same as sales contract.
2. Letter of Credit Opening
After both parties exporter and importer agreed to all conditions and importer is no doubt to put the order to importer, then the next step is applying a Letter of Credit to any bank trusted in case both exporter and importer choose L/C to becomes payment term. The applying is made by importer to any bank or called Opening Bank, Importer has provide some funds equal to amount of the goods to be exported by exporter or called beneficiary, then the bank can issue the L/C after all requirement for applying an L/C. Before an L/C to be issued and transferred to Advising bank better applicant pass its draft to beneficiary to check and makes sure the term and condition the L/C is correct, this way is to avoid some discrepancies conditions.
3. Cargo Shipment
After exporter received the L/C from advising bank, as beneficiary they has obligation to provide the goods to be ready to export, this called ready to export if the goods is has been inspected by buyer's agent and the inspection result is in good condition and of course ready to export.
Shipping company will receive shipper's booking for shipment and they will coordinate with their agent at destination to get buyer green light for shipment process. And they have to provide transport documents such as Bill of lading, shipment advice, and FCR for shipper. The shipping company also responsible to arrange the shipment till importer or consignee received the goods in a good condition.
4. Negotiation or presenting documents
Beneficiary or exporter send all documents required to advising bank and advising bank will check the documents presented whether the documents comply with L/C or they found any discrepancies. In order to Advising Bank found any discrepancies conditions they will ask shipper whether they will make the correction or send the documents with discrepant condition to Issuing bank.
After all documents have been arrived at Issuing Bank, they will scrupulously check all term and condition of the documents presented. If all documents comply with the L/C in term and condition Issuing bank has an obligation to fulfill the payment within four days since they received the documents. But if the documents didn't comply with the L/C, they will ask importer to give their approval or acceptance then the payment can be fulfilled.
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