"Few customers apply for letters of credit because the procedures are too complicated. We usually do wire transfers," Wang Mudan replied.
Li Xiaoliang said disapprovingly, "Mr. Wang, I understand what you mean. For sellers, wire transfer is the safest way to receive payment. However, for buyers, cross-border trade carries significant risks. If they pay in advance and unfortunately encounter an untrustworthy seller who refuses to ship the goods, they will end up losing both money and goods. This type of situation occurs quite frequently in many cross-border trade cases, so for large transactions, many clients still request payment by letter of credit. This payment method provides security for both the buyer and the seller."
Li Xiaoliang's talk about the pros and cons of payment methods was also analyzed according to the routine guided by Gao Huai.
Wang Mudan smiled knowingly and said, "Mr. Li, to be honest, we used to accept letters of credit, but the procedures were too cumbersome. To improve efficiency, we've changed all payment methods to wire transfers. The customer you mentioned is worried that the supplier won't ship the goods after payment. Please rest assured about this. We're a legitimate factory and we need to do long-term business. We can't just accept payment and not ship the goods. Moreover, we live in a society ruled by law. Who would dare to accept payment and not ship the goods? Wouldn't that be courting disaster?"
"Mr. Wang, you're right. You're worried about the risks of a letter of credit for such a large transaction. We share the same concerns. To show our sincerity, we'll pay a partial deposit first. How about that?"
"How much do you pay?"
"A 10% deposit."
"Oh, a 10% deposit is too little. For such a large order, we need a lot of money to purchase raw materials. Can we change it to 30%?"
In fact, a 30% deposit is a common practice in the foreign trade industry, and very few people accept a 10% deposit. Since the order amount is so large, Wang Mudan naturally does not want to accept a 10% deposit.
Li Xiaoliang accepted Gao Huai's important trust and must find ways to make Simingda and Wang Mudan accept his payment method.
"Mr. Wang, to be honest, the 30% deposit you mentioned is only for small orders. If it's a large order, suppliers won't pay 30% in cash. They have to consider the risks. Domestic business isn't 100% reliable, let alone international trade. A foreign customer won't pay you 1.5 million RMB all at once. You can ask your peers; large sums are usually handled by letter of credit."
Wang Mudan was gradually persuaded by Li Xiaoliang: "What is your specific payment method?"
"After confirming the order, I'll pay a 10% deposit and open an immediate L/C for the balance. Once the goods are shipped, you can pay via bank acceptance. How about that?"
Li Xiaoliang had no idea about the operating procedures of letters of credit. All the details were taught to him by Gao Huai.
Continue read on readnovelmtl.com
