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How to make payments
There are a
number of different payment methods that can be used when you deal
with us. Three mostly used are T/T payment in advance, D/P and L/C.
1. T/T payment
in advance
2 .Letter of credit
3 .D/P
(document against payment)
1. T/T
payment in advance
T/T means
telegraphic transfer, or simply wire transfer. It's the simplest and
easiest payment method to use.
T/T payment in
advance is usually used when the sample and small quantity shipments
are transported by air. The reason why is that the documents like air
waybill, commercial invoice and packing list will be sent to you
along with the shipment by the same plane. As soon as the shipment
arrives, you can clear the customs and pick up the goods with the
documents. As it's acknowledged, T/T payment in advance presents risk
to the importer if the supplier is not an honest one.
For us, T/T
advance payment is required for some high-value samples (see our
samples ordering policy) and small quantity order shipped by air.
To the
customers who have long-standing business relationships with us, we
send free samples; and for the small quantity order, document against
payment is used.
It takes 3-4
days for us to received the wire transfer made from anywhere in the world.
2. Letter
of credit (L/C)
An irrevocable
Letter of Credit is also an often used payment method. It is often
referred to an L/C. Letters of Credit are formal payment methods that
offer a lot of protection to the parties.
Simply put, a
letter of credit is a letter written by the importer's bank to the
exporter. It verifies that the payment will be guaranteed when the
bank is presented with the concrete documents (bill of lading, and
freight documents). Most letters of credit are "irrevocable"
once the importer has had them sent.
A letter of
credit usually includes applicant (you, the importer), beneficiary
(our,I exporter) bank, negotiating bank, specification and quantity
of the goods, amount of money, loading port and destination port,
shipment date, the validity date of the L/C, terms and conditions
agreed by both the importer and seller, and the documents required by
the importers (bill of lading, commercial invoice, packing list,
insurance certificate, inspection, etc.)
The L/C
payment procedure is usually as follows:
a. You (the
importer) applies to open the L/C to us (the seller) through a bank
who can open the L/C in your country.
b. The opening
bank will inform The Bank in Thailand that the L/C has been opened.
c. The Bank in
Thailand will inform us that the L/C has been established.
d. We'll check
all the terms and conditions listed in the L/C. If all terms and
conditions are acceptable, we'll arrange the shipment within the time
specified in the L/C.
e. After the
goods are loaded onto the ship without any damage, the ship
agent will issue the clean bill of lading to us.
f. We will
submit the clean bill of lading and other relevant documents to The
Bank of Thailand to gather the payment. Only with clean bill of
lading can you claim the ownership of the goods.
g. The Bank in
Thailand will send the clean bill of lading and relevant documents to
your bank (the opening bank).
h. The opening
bank will inform you that all documents are received.
i. You will go
to the bank to make the payment to get the clean bill of lading and
relevan documents.
j. With all of
these documents, you can clear the import Customs and pick up the
goods after the goods arrive on the destination sea port.
The typical
L/C scenario takes 7 - 15 days to complete.
3. D/P
(document against payment)
The exporter
(we) makes shipment and sends the shipping documents to the
importer's bank for collection. The Bank in Thailand then sends
the shipping documents along with a collection letter to the
importer's bank, who then sends a collection notice to the importer.
The importer makes payment upon receiving the notice, and only after
payment does the importer receive the original shipping documents
with which you take the physical possession of the goods.
The major
advantage of the use of a cash against documents payment is the low
cost, versus using a letter of credit. But, this is offset by the
risk that the importer will for some reason reject the documents (or
they will not be in order). Since the cargo would already be loaded
(to generate the documents), we have little recourse against the
importer in cases of non-payment. So, a payment against documents
arrangement involves a high level of trust between the exporter and
the importer.
To our
customers who have long-standing relationships with us, for larger
quantity order shipped by sea, we usually make the payment
arrangement as 50% made via T/T advance payment and 50% made via D/P
to expedite the whole transaction process.
There
is no payment method that is perfectly safe to both the importer and
supplier at the same time. But, we still have got to do business,
right? So, we hold it's crucial to develop a long-term relationship
with our customers based on mutual trust.
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