Four traps that may be stepped on by small and medium foreign trade enterprises

For many small and medium-sized foreign trade companies, although they want to get a slice of international trade, they are often scared of being deceived. In the process of foreign trade exports, what are the potential pitfalls? How do companies identify and avoid these traps? ?

There are many pitfalls that Chinese companies may tread when doing business with foreign buyers:

Trap One: Foreign Buyers Request Stocks

Now due to the overcapacity, many companies have become hot-headed when they see foreign buyers demanding goods, and they have not noticed the hidden risks of payment methods. For example, some buyers allow companies to sell goods, sell goods and then give money. If they fail to sell, they will accumulate pressure and transfer the risk to the company.

Suggestion: The best method of payment is to use L/C letters of credit and credit cards issued by reputable banks, because in South America, Central America and other countries, even three yuan and ten yuan can open banks. The second is D/P (Payment of Payment), and D/A (Acceptance/Payment). Even if it is a customer with a close relationship, try not to use the method of selling goods.

Trap 2: The fact that buyers hide their bankruptcy protection

Some buyers have already filed for bankruptcy protection, but the company has already shipped the goods out and recovered no money. After investigating, they discovered that the buyers had no repayment ability at all. However, because buyers have already filed for bankruptcy protection, companies simply cannot sue such buyers.

Recommendation: To investigate the buyer’s credit status, you can investigate and evaluate buyer ratings through lawyers or credit rating agencies.

Trap 3: Companies need to be careful that some buyers will change the terms of the letter of credit after signing the contract, such as the quantity, difference, quality, etc. of the goods. For example, changing the product quality requirements, the company may not be able to meet credit after delivery. License terms and therefore cannot recover money

Recommendation: Companies must be careful about all contracts, amendments to the terms of the letter of credit, and legal advice if needed.

Traps 4: Buyers take goods away without original bills of lading

Suggestion: Enterprises should not think that holding an original bill of lading will not be a problem because buyers may not have the original bill of lading and may also get the goods, because according to the adoption of FOB by enterprises, the transportation is borne by the buyer, and foreign freight forwarders only care about the benefits and take orders to pay. Money people. The case of Xintai mentioned above is such that American buyers bought a freight forwarder and removed the goods without an original bill of lading.

There are several black spots where local freight forwarders often make tricks: South America, China, the United States, Mexico, the Middle East, and Malaysia.

With the expansion of its own strength and international perspective, more and more domestic companies have set up their own international trade department to conduct export business and gradually reduce their dependence on trading companies. However, due to the lack of experience, it is often difficult to see through the fraud means of foreign buyers or freight forwarders and thus be deceived. We hope to help domestic enterprises to understand potential pitfalls and risks in the process of export trade and to maximize their own interests.