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1 L/C - Different sellers @ different prices?

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Sat, 07/19/2008 - 00:47
MQVee
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Joined: 07/18/2008
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Dear Experts,

I have too many questions, so maybe I better explain my current situation and then the experts can advise what is best to do in this case?

- I am a buying agent in Thailand and I have an overseas buyers request to source 100.000 units of a product per month – 12 months in a row.

- The buyer allows me to source from different suppliers as no one sole supplier has this capacity from his own.

- At first I had the intention to let the buyer issue L/C’s to each supplier every month for its contribution for that month. For the first month I have found 3 suppliers, the next month I might need 5 suppliers and the month after maybe only 2.

- In order to simplify and speed things up, the buyer proposed not to do that, but send me 1 L/C instead and let me source, buy the product from different suppliers and arrange their payments and my commission using this one L/C. (I have the agreement with the buyer that I will earn x-USD per unit that is been shipped out)

- Now, every month, every supplier quotes different prices (CIF), ships a different capacity using different carriers and so on...

Please help me out here, how to establish this? As I have never worked with L/C directly myself before.... is it possible to open a L/C with an open credit line so we can pay different prices after the buyers agrees or something like?

Kind regards and all comments are highly appreciated.

MQVee.

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Mon, 07/21/2008 - 05:03
#1
biswajeetpanda
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Joined: 07/04/2008
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First of all assuming

First of all assuming following things everthing else remaining same

-amount will change

-qty will change

-price will differ

-shipment date/expiry/presentation will differ

should go for transferable credit. As understand you are buyer's agent first get the transferable credit established by importer(buyer) in your favour(you are the first benefiaciary) for the unit price + your commision. Allowing partial shipment you can transfer the LC to various supplier's(second beneficiary) against which you can ship the goods.

e.g assuming your unit price is USD 100, commission - usd 5 and combined quantity by different supplier 1000mt. first have the transferable LC established  by buyer for 105 x 1000 USD and then transfer USD 100 x exact qty value to various suppliers with the relevant changes.

Now what if the unit price are different. Well in that case as per my understanding batch the same unit prices and have the transferable LCs for each batch. By that you will reduce the no of LCs.

Appreciate better suggestions from our experts on reducing the no of LCs further.

 

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Sun, 07/27/2008 - 22:56
#2
MQVee
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Joined: 07/18/2008
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Thank you

Very helpfull, this was exactly what I need to know,... and if this was possible.

 

MQVee

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