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Big order, small capital and less stock

Discussion in 'Dropshipping & Wholesale Hookups' started by ghettogong, Dec 3, 2010.

  1. ghettogong

    ghettogong Regular Member

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    Encountering a problem that I usually just ignore, but I would love to know what you do in similar situations.

    I run a wholesale ecommerce store. Usually a client orders some stuff, and I send it with cash on delivery option or the client pays in advance via bank transfer. Delivering on COD i only do if the
    order is no bigger then 1000eu. Above that they have to bank transfer before I send the stock out of my warehouse.

    A few days ago, I received an order for 20.000eu. First I have to re-order more stock. But biggest problem is that I wont send on COD and the client doenst want to pay in advance, so sitting here and counting the chickens but don't know how to get that 20.000eu in confidence from my buyer?

    Have looked around and maybe I can arange a letter of credit or just a simple sales contract with the TOS on the backside. Just wondering how we can encourage our buyers to bank transfer money in advance.







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    Last edited: Dec 3, 2010
  2. analyzer

    analyzer Newbie

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    have you checked with your bank? this sounds like typical trade finance most banks do, your client will deposit the €20k at his bank and your bank pays you when the merchandise is delivered, then banks just settle with eachother. Guess it may depend on your country but in western europe at least this is standard practice.
     
  3. ghettogong

    ghettogong Regular Member

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    aha...yeah im in europe. The letter of credit was indeed the first thing i thought of. I have a meeting set up with my own bank: I.N.G and want to meet with all available banks.

    But because its my first ever L/C sale I don't wanne be screwed or screw my customer, do you have any tips that I dont end up in a financial tangle? Like; if the total order amount is 20.000 and it takes 10 days before the goods reach my customer, at what cost will I look at if for example I execute the L/C at your bank? And after the goods are delivered and the products are "as is" can the buyer cancel the L/C so that I end up with 15.000eu of stock (not going to scam anyone or stuff, just a fear)?
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