Step-by-Step Guide: From Inquiry to Order Payment in International Trade Processes

Tutorial Guide: From Inquiry to Documentary Settlement, Step-by-Step Instruction on International Trade Processes

This tutorial guide will provide you with a detailed analysis of the international trade process from inquiry to documentary settlement. It will teach you each crucial step one by one, helping new foreign trade professionals smoothly start their business.

Key Points of the International Trade Process

The international trade process consists of multiple key steps. Let's break them down one by one:

1. Inquiry: This is the starting point of international trade. According to industry statistics, about 70% of successful international trade deals start with an effective inquiry. For example, a clothing retailer in the United States sends an inquiry to a textile manufacturer in China, asking about the price, quality, and delivery time of a certain type of fabric. An effective inquiry should clearly state the product requirements, quantity, and expected price range. A well - crafted inquiry can significantly increase the chances of getting a favorable response.
2. Offer: After receiving the inquiry, the seller makes an offer. The offer should include the price, quantity, quality specifications, delivery terms, and payment terms. For instance, a Chinese electronics manufacturer offers to sell 1000 smartphones to a European distributor at a price of $200 per unit, with delivery within 30 days and payment by letter of credit.
3. Counter - offer: The buyer may not be satisfied with the initial offer and may make a counter - offer. This process may involve several rounds of negotiation. In a real - world case, a Brazilian coffee importer may counter - offer a lower price to a Vietnamese coffee exporter, and the exporter may then adjust the price and other terms accordingly.
4. Acceptance: Once both parties reach an agreement on the terms, the buyer accepts the offer. This forms a legally binding contract. In 80% of international trade cases, acceptance is confirmed through written communication, such as an email or a signed contract document.
5. Contract Signing: Signing a contract is a crucial step. It should clearly define the rights and obligations of both parties. Key points to note include the product description, price, quantity, delivery time, payment terms, and dispute resolution methods. For example, in a contract between an Australian wool supplier and a Japanese textile factory, the contract specifies the quality standards of the wool, the exact delivery date, and the currency for payment.
6. Goods Preparation: The seller starts to prepare the goods according to the contract requirements. This may involve production, procurement, and quality control. A furniture manufacturer in Indonesia may need to source high - quality wood and hire skilled workers to produce the furniture as per the contract specifications.
7. Inspection: Before shipment, the goods usually need to be inspected to ensure they meet the quality and quantity requirements. In some countries, government - authorized inspection agencies are required to conduct inspections. For example, food products exported from Thailand to the European Union must pass strict food safety inspections.
8. Customs Declaration: The exporter needs to complete the customs declaration procedures. This includes providing accurate information about the goods, such as the description, value, and origin. Incorrect customs declaration can lead to delays and fines. In a recent case, a Chinese toy exporter faced a delay of two weeks due to an error in the customs declaration form.
9. Chartering and Booking: The exporter arranges for the transportation of the goods. This may involve chartering a ship, booking a flight, or using other transportation methods. For example, a large - scale machinery exporter in Germany may charter a whole container ship to transport its products to South America.
10. Loading: The goods are loaded onto the transportation vehicle. Proper loading is essential to prevent damage during transit. A wine exporter in France needs to ensure that the wine bottles are carefully packed and loaded to avoid breakage.
11. Insurance: To protect against potential risks during transportation, the exporter or the importer usually insures the goods. Insurance coverage can vary depending on the nature of the goods and the transportation route. For example, high - value electronics may require all - risk insurance.
12. Documentary Settlement: This is the final step of the international trade process. The exporter prepares a set of documents, such as the bill of lading, invoice, and insurance certificate, and presents them to the bank for payment. According to trade data, about 90% of international trade settlements are completed through documentary credit or other bank - related payment methods.

Conclusion

Mastering the international trade process from inquiry to documentary settlement is essential for new foreign trade professionals. By understanding each step and its key points, and learning from real - world cases, you can navigate the complex international trade landscape with confidence. If you are eager to learn more about international trade and improve your skills, subscribe to our newsletter for regular updates and in - depth insights.