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Q: How can I deal with LC at sight?
A customer placed me one container order for my own export business, I feel really happy about it and I know this customer could possibly turn to be my big customer.
But the customer wants to pay 10% deposit and 90% balance after the original documents reached to his bank(LC at sight).
I registered a trading company in Shanghai but I have not actived my company bank account as I don't use it for receiving payment. All my customers paid to my personal bank account so I can avoid the tax.
I will buy the products from a factory which I have already been cooperating.
Anyone has knowledge of how to deal this payment? I have zero experiences dealing LC at sight in this situation.
You might need to learn to add up before you go any further in business...10% deposit does NOT lead to a 70% balance payment!
Why not deal with the payment legally? Activate your business bank account and look into paying taxes.
There is another possible way...get your customer to pay directly to the factory and then they pay you your profit. Only issue then is the customer knows who the factory is. My wife does things this way. Her Swedish client doesn't speak a word of Chinese so can't deal with the factory directly.
Viki87:
Yea, I'll go active my business account for going further.
I try to not deal legally to avoid some taxes as now my business is slow.
I won't reveal my supplier information to customer. I think your wife should keep it as confidential. The client could get a translator to find out the supplier's contact. Too dangerous
Hotwater:
My wife's client has the factory details (at least she's got their bank account details).
Yes she she could get a translator but this is specialist designer jewelry and the client is clueless about how it's manufactured even though it's her designs. The client would need a translator who knows how to make jewelry
Marcos_Cisneros:
Dear Viki, it should have been clear to any lucid, cognizant human being that you made a simple typing mistake. I just urge you to be very cautious with a 10% down, 90% later settlement offer.
Hotwater:
Dear Marcos, this lucid person was, in a sarcastic way, trying to ascertain if it was 10/90 or 30/90. 30%\70% is a standard payment term with the factories I deal with.
i second hotwater, advise to deal only legally wth company account.
there r various types of lc's like Unconfirmd / Confirmd / Documentary / Irrevocable / Revolvin' / Stand-by Letter of Credit and few more! b careful to clarify n get the right one opend on yr company.
to be clear n protected, request the lc applicatn copy frm yr client fr approvl of the clauses n conditions by yr banker prior to openin' the same.
strictly follow the terms of lc wth correct docs to avoid descrepancies whch may hold up yr pymt (or require amendmnts incurrin' costs/delays).
good luck.
Now the customer told me he can do 10%deposit and 90% DP. The way he said he did with my previous company.
I also have never never dealt with DP. Is I risky for agree this payment term? My own company doesn't have right of import and export.
