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Factors to Consider When Choosing An Import Payment Method

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One of the most important things to negotiate before closing on an import sale is how payment will be made.

Many circumstances and priorities will influence your choice of payment method. A lot will depend on how much you know about financing a sale and how willing your supplier is to accept your terms and conditions. Other factors include:

  • Your cash flow availability and needs.
  • Your relationship with your supplier.
  • The economic conditions in the country to which you are importing.
  • Interest rates and currency adjustment factors.
  • Type of product.
  • Your supplier's creditworthiness.
  • The terms your competitors are offering.
  • Your supplier's demands.
  • The urgency of the transaction -- are you under time constraints?

Whatever terms of payment you negotiate, you must always (1) make sure they are understood by all parties, and (2) have your supplier sign a document that indicates acceptance, such as the proforma invoice. This prevents some unpleasant surprises later on and reduces your shipment liability exposure.

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