Did end seller use transferable letter of credit?


How to know from payment procedure you are dealing with end seller or trader?

Every day we get lots of offer but most of them are not considered as serious offer by our trader. This related to the payment procedure.
Payment procedure is one of most important factor in any FCO (full corporate offer) after goods quality and quantity available.
Genuine buyer in any FCO after company verification will put your payment procedure under microscope and zoom to see how he will be safe and secure in the offered deal.
We know from our other post that LC (letter of credit) is the preferable instrument of payment by buyer.
LC is the best way to secure buyer founds from scammer but used in the same time buy trading company to secure benefit (commission) we showed this in our post :
How to secure commission by the use of transferable L/C?
At start let see what is a transferable Letter of Credit?
A transferable letter of credit is one, which specifically states and indicated in his verbiage that it is transferable. This will be only under the permission for the buyer and his agree to open sash LC. In a transferable letter of credit, the rights and obligations of the beneficiary are transferred to another party, usually a Manufacturer or wholesaler. Transfer may be either full or partial.

Sow from the definition up of the transferable LC, rights and obligations are transferred from first seller (trader) to the end seller (Manufacturer, wholesaler…..)
Regularly end seller have no need to ask for transferable letter of credit, he own the goods sow payment will be lodged in his account.
Transferable LC is needed by trading company as they must transfer founds to the factory or wholesaler.
So if your seller sends FCO (full corporate offer) in wish stated transferable LC this mean that you are not dealing with the end seller.
How to deal with sash offer and secure yourself?
From our experience is better to enter in negotiation with the trading company or trader to give you direct contact with his end seller, we generally agree commission with him and sign BDA (business development agreement) to secure his commission.
Let’s now resume all this:
-end seller never asks for transferable LC.
-trader or trading company need sash type of credit to pay the end seller (this related to the funds luck in the company).
-to be secure and safe, from our experience is better to convince trader to introduce you directly to the end seller.

-entering in sash deal is risky, this related to absence of control on goods availability and price.

It is legal to Work with transferable LC, and theirs many reputable trading companies uses this payment instrument to conclude their deal and deliver products to the buyer with no problem.

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  • Thanks for your comment, we just start this project .please if you need any information or need more detail about anything in trade we are ready to write about it and clarify. “Helpintrade” team ready for help.

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