Trade Flock - How to Import Solar Panels From China? TradeFlock - Import Cosmetics from China | Page 27

Payment Methods
For Chinese exporters, timely, and
full payment is the top priority. As
long as all the documents have been
handed to the importer, the exporter
would regard the goods as being
handed to the importer as well.
There would be mainly 3 ways to
send money to China suppliers:
Telegraphic Transfer (T.T)
This is probably the oldest payment
method in international trade and the
most popular for low to medium end
transactions. Normally an advance
payment is sent before production
and the balance as per the payment
terms. The main risk for the
importer is losing the advance in
case things go wrong. In
Telegraphic Transfer, the importer
has to make the payment directly to
the bank by telegraphic to the
exporter’s bank account. To carry
out the T.T, the exporter needs to
open a USD account and inform
importer about account information
in advance (the bank will charge a
fee for T/T remittance).
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T/T Payment Process
Deposit payment (30%)
Production starts
Completion of production
Quality Inspection / Compliance
testing
Buyer approves batch
Delivery to the Port of Loading
Bill of Lading
Loading & Shipment
Balance payment (70%)
Exporter sends original Bill of
Lading and other freight documents
(required to release cargo in
Port of Destination)
by individuals or by Hong Kong
registered companies managed
by mainland China-based
individuals.
Letter of Credit
It
is the most secure
payment method in terms of
“Payment Risk” and also a
popular option for transactions
exceeding $50,000. However,
LC’s are not always feasible for
small importers, due to
Cash
Cash is big in China and will
be for. Even large transactions
can take place in cash. Paying
in cash works either when the
importer is in China or is
being represented by a
sourcing company/agent on the
ground. Cash is definitely the
riskiest option from an
importers point of view as if
things go wrong, there is very
little recourse. Cash should only
be used for smaller transactions
where there is a degree of trust
with the supplier.
Exorbitant Bank Charges
Complex procedures &
paperwork which can be
difficult to understand
initially and it is advisable to
use a Certified Documentary
Credit Specialist for
consultation and compliance at
least for a couple of
transactions. Once importers
grasp the concepts, everything
becomes a lot simpler.Small &
many medium-end factories are
not always comfortable with
LC’s due to the complexity &
language barrier.However, one
benefit of using a Letter of
Credit is that it opens up a lot of
“financing options”.
PayPal
Paypal as a payment method
has gained more and more
acceptance in the last few years.
And is a commonly
accepted payment method now,
especially with tech-savvy
e-commerce sellers. But it is not
feasible for larger transactions
as their fee is percentage based.
It is a great payment method for
sourcing very small quantities
and samples.Majority of the
Paypal accounts are either held
Upcomings
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2
How to Import Edible Oil
from China?
A Complete Guidance: To
Import Computer Parts
from China
3 How to Import Garment
Accessories from China?
4 How to Import Plastic
Products from China?
5 Import Dairy Products In
India
26