Tuesday, January 8, 2013
HOW TO GET PAID ON OVERSEAS SALES
Today we'll look at the safest most assured way to get you money after a sale, and some other ways to complete the deal while offering your customer alternative payment options.
Ideally, asking for payment in advance is most secure. But that won't work in 99% of cases. Your customer will want to safeguard that they receive what was ordered and you will want to get paid when you ship.
The solution is the Irrevocable Confirmed Letter of Credit. In effect what happens is the customer puts in escrow the funds for the value of their order with their bank.
The customer's bank holds these funds to be paid to you when proof of shipment is presented.
Let's look at the words: Confirmed means the customers bank has actually deposited that escrow money with your bank here in the U.S. Irrevocable means the customer cannot change their mind about payment. You ship - you get paid by your bank.
The controlling paper work is the shipping forms used by the logistics company who handles your merchandise to the customer's destination. Generally it is the Bill of Lading. A Bill of Lading is a form just like the one you fill out when you send a parcel via UPS or FEDEX.
What assures your customer that they are getting what they ordered is the description of the merchandise on the Bill of Lading. Your bank receives the Bill of Lading, takes note that the goods are in accordance to the order and pays you invoice. The customer has the proof of correct shipment and the deal is done.
There are conditions as part of this transaction which you MUST know in order to protect yourself and the customer. We'll cover that next time we meet.
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