Responding to Inquiries from Potential Customers.
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Transcript of Responding to Inquiries from Potential Customers.
Responding to Inquiries from Potential Customers
Provide Pro forma Invoice
Inquiries from abroad usually accompanied by request for “pro forma” invoice – A quotation in an invoice format which Includes:
– Product description and specifications– Material costs
– Price– Quantity– Shipping costs– Delivery terms– Procedures
Proforma Invoice
A-Plus Avocado
411 South Street, Modesto, CA 97049 USA Phone: 123-456-7890 fax 123-456-7899
Date: 15-Apr-06 Proforma No.: 01FPJ0406
Sold To: Ship To:
Fresh Produce of Japan, Fresh Produce of Japan
3-1-2721 Rydo-cho, Tokyo 665-0921, Japan 3-1-2721 Rydo-cho, Tokyo 665-
0921, Japan
Ship Date 25-Apr-06 Ship Terms: CIP Tokyo, Japan
Order No.: 01-0406-AA Currency: USDollars
Ship Via: Ocean Freight Payment Terms:50% Prepay+50% Net 90 days
invoice
Item Weight kg/case Unit Qty
No. Description Net Gross Price Units Total
AA-10Haas Avocados - Size
10 20.0 22.0 $0.25 100,000 25,000.00
AA-15Haas Avocados - Size
15 23.0 25.0 $0.30 150,000 45,000.00
Freight 4,250.00
Insurance 700.00
Harmonized (Schedule
B) No.: 0804.40.0000 -
A vocad
o
All Products are of USA Origin
Totals Net wt Gross wt Units Dollars
54,500 59,500 250,000 $ 74,950.00
I certify that the above is true and correct Please sign your authorization & fax back:
A+A -Export Manager Sign Here:
Sample Pro Forma Invoicehttp://www.tradeport.org/tutorial/details/index.html#proforma
Sample Pro Forma InvoicePRO FORMA INVOICE FROM: Innovation Technologies
983 Stanley Ave.San Diego, CA 93820
(619) 567-1938DATE:May 8, 1995Reference No.:3245Payment Terms:Letter of CreditCountry of Origin:USAEstimated
Date Of Shipment:45 daysQuoteValid Through:October 8, 1995SOLD TO: Grupo Estevez, S.A. de C.V.Tamales No. 1 Piso 218378 Cd. Polanco Mexico
SHIP TO: Juarez Industriale454 Blvd. Cortez1114 Mexico D.F. Mexico
Quantity Description Unit Price Total Price 100 each Computer MotherboardsFive (5) sealed cartonsGross Weight: 10 lbs. US $ 50.00 US $ 5,000.00 EX FactoryFreight Forwarder FeesAir FreightInsurance CIF Mexico5,000.00100.001,200.0020.00 US $ 6,320.00Price, availability and delivery subject to confirmation at time of order.
Authorized Signature _____________________________Date______________________
Sample Pro Forma Invoice
See Center for International Trade Development Website
http://www.citd.org/startup/eb/appendix.cfm?sec=86
To Complete Pro Forma Invoice
1. Exporters must set a price for their product
2. Determine the terms of sale
2. Determine (Incoterms) Terms of Sale
• Exporter must know the terms before preparing a quotation or a pro forma invoice.
• Incoterms are standardized names created by the International Chamber of Commerce (ICC) for describing terms of sale.
Diagram of INCO terms
http://www.export911.com/e911/export/incoterm
Most Common IncotermsTerm Definition Risk Cost Include on
Quotation
EXW Ex Works
Buyer arranges for pick up of goods at the seller’s location. Seller is responsible for packing, labeling, and preparing the goods for shipment on a specified date or time
Buyer assumes all risk
Buyer pays all transportation costs
N/A
FCA Free Carrier
Seller is responsible for costs until the buyer’s named freight carrier takes charge
Seller and Buyer
Split N/A
FAS Free Alongside Ship (over water only)
Buyer arranges for the ocean transport. Seller is responsible for packing labeling, preparing the goods for shipment, and delivering the goods to the dock.
Seller: until the goods reach the dock. Buyer: from dock to destination
Buyer: all ocean transport costs. Seller is responsible for costs associated with transporting the goods to the dock.
Costs of transporting goods to the dock.
Most Common IncotermsTerm Definition Risk Cost Include on
Quotation
FOB* Free On Board FOB should also never be used unless you specify what and where such as "FOB ocean vessel at New York City
Seller arranges for ocean transport of the goods, preparing the goods for shipment, and loading the goods onto the vessel. The goods ship ocean freight collect.
Buyer: Once the items are on board
Seller: Wharfage (charges to load the goods onto the ship) and freight forwarder fees.
Costs, until on board
CFR Cost and Freight
Seller has the same responsibilities as when shipping FOB, but shipping costs are prepaid by the seller, instead of shipping collect.
Seller: assumes the risk until the shipment reaches the overseas dock.
Seller: costs of freight fees up to destination.
Add Freight to cost of product.
CIF Cost, Insurance, and Freight
Seller has the same responsibilities as when shipping CFR with addition of including a marine insurance policy
Seller:; until the shipment reaches the overseas dock.
Seller insurance and freight forwarder fees.
Insurance, freight and cost of goods
FOB Example
FOB, New Orleans for 3 ice makers. You as the exporter are responsible for all costs in delivering the goods to New Orleans and loading the icemakers on board a vessel named by the German firm. You are responsible for arranging any export clearances (licenses, taxed, fees). The German firm is responsible for booking space for cargo and pays for the ocean freight.
CIF Example
CIF (Named foreign port of destination) YCI quotes its German customer CIF Bremerhaven for 3 ice makers. YCI arranges for and pays all transportation costs to the Port of Bremerhaven. YCI arranges and pays for the marine insurance policy. YCI, however, is only responsible for risk of loss until loading of the icemakers on board the vessel in New Orleans.
FAS Example
YCI, the U.S. exporter, quotes the German firm FAS, New Orleans for 3 ice makers. YCI is responsible for all costs in getting the goods to the Port of New Orleans alongside the nominated vessel prior to sailing time. The German buyer is responsible for booking space, paying ocean freight and arranging for all export clearances.
Source for INCOTERMS
For a complete list of INCOTERMS, including responsibilities of the parties, see Incoterms 2000.
http://www.dsl.co.nz/index.asp?page=incoterm.htm
• Pro forma invoices should include two statements. – One that certifies the pro forma invoice is true and correct and– another that gives the country of origin of the goods.
• The invoice should also be clearly marked "pro forma invoice."
• When final commercial invoices are being prepared prior to shipment, it is advisable to check with the U.S. Department of Commerce or another reliable source for any special invoicing requirements that may be required by the importing country.
If assistance is needed in figuring CIF or CIP prices, an international freight forwarder can help. The exporter should furnish the freight forwarder with – a description of the product to be exported and
its weight and – cubic measurement when packed. – The freight forwarder can compute the CIF
price usually at no charge.
Document
• WHAT EXPORT SHIPPING DOCUMENTS DO I NEED?– vary widely according to the country of
destination and the type of product being shipped.
– Failure to comply can delayed or end payment; goods could be seized or you could be fined, denied further export privileges, or jailed.
• 90% of all documents are created by the Exporter
• 10% of documents required by exporting country
• 90% of documents required by importing country
• All documents used by the Importer/customs broker
to clear customs
• Shipping documents are created by the
transportation company
International Documentation
International Documentation
• Purchase Order• Proforma Invoice• Commercial Invoice• Consular Invoice• Packing List/Slip• Weight List• Certificate of Origin
– NAFTA Certificate of Origin
International Documentation
• Shipper’s Export Declaration• Inspection Certificate• Clean Report of Finding • Bovine Free Certificate• Beneficiary Certificate• U.S. Government Agency Certifications• Export License• Import License
International DocumentationDate: 15-Apr-06
Customer: Fresh Produce of Japan
Country of Destination: Japan
Payment Terms : 50% Prepay/50% Net 90 Days Invoice
Incoterms: CIP Tokyo, Japan
Required Documents:
Yes No Exporter Importer
Purchase Order X X
Proforma Invoice X X
Consular Invoice X
Commercial Invoice X X
Packing List X X
Certificate of Origin X X
NAFTA Certificate of Origin X
Validated Export License X
Import License X
Shipper's Export Declaration (SED) X X
Shipper's Letter of Instruction (SLI) X X
Inspection Certificate X X
Weight List X
Bovine Free Certificate X
Beneficiary Certificate X
U.S. Government Agency Certifications FDA X
Certificate of Conformity X
Certificate of Free Sale X
Other Documents: Fumigation Certificate X
Most Commonly Required Documents
• U.S. Shipper's Export Declaration – Used by the U.S. Census Bureau to compile trade statistics and to
help prevent illegal exports.– The SED and instructions on how to fill it out are available from a
variety of sources including the U.S. Government Printing Office (202-512-0000) and the U.S. Census Bureau's home page.
• Do I Need to Submit an SED for My Shipment?– Required for any shipment valued at $2,500 or above (If the
shipment is valued at over $2,500 but is made up of various commodities falling under several Schedule B numbers none of which is valued at $2,500 or higher, no SED is required.)
– Required for any shipment to particular countries, such as Cuba, Libya, and North Korea, and for any shipment requiring a validated export license.
– Required for shipments to Puerto Rico, the U.S. Virgin Islands and the former Pacific Trust Territories even though they are not considered exports (unless each Schedule B item is under $2,500).
– Shipments to Canada do not require an SED. (Shipments to third countries passing through Canada do need an SED.)
– Sample http://www.citd.org/startup/eb/appendix.cfm?sec=89
• Purpose– Contract among three parties to provide
transportation of cargo• Consignor -party delivering goods to the carrier;
usually the seller• Carrier - party accepting legal responsibility to
provide transportation; often the transportation company
• Consignee - party entitle to receive the cargo; buyer, bank, an agent
– Once the carrier or freight forwarder completes the bill of lading, he becomes bound to forward the goods to the agreed destination in the same condition as they were received.
Bill of Lading
Types of Bill of Lading
• Straight bill of lading: – non-negotiable. – allows only the appropriate person specified in the bill
of lading to pick up the goods. This is usually the preferred type of bill of lading for beginning importers as it offers the buyer the most protection by prohibiting the release of the goods to anyone but the party specified in the documentation.
– Sample http://www.citd.org/startup/eb/appendix.cfm?sec=91
• Shipper's order bill of lading: – negotiable bill of lading. can be bought, sold, or
traded while the goods are in transit and is used for letter of credit transactions. The customer usually needs the original or a copy as proof of ownership to take possession of the goods.
– serves as a certificate of ownership or title to the goods. When written to order, it serves as a negotiable instrument through which title is transferred from the exporter to the importer.
• Air waybill - carrying agreement between the shipper and the air carrier. – In contrast to the ocean bill of lading it is a non-
negotiable instrument and serves as a shipping contract and receipt to the shipper.
– certifies that the airline has accepted the goods as listed on the air waybill and agreed to carry the goods to the airport of destination in accordance with the conditions of the contract.
– Sample
http://www.citd.org/startup/eb/appendix.cfm?sec=92
• Export Packing List– itemizes the material in each individual
package and indicates the type of package: box, crate, drum, carton, and so on.
– shows individual net, legal, tare, and gross weights and measurements for each package (in both U.S. and metric systems).
– The list is used by the shipper or forwarding agent to determine the total shipment weight and volume and whether the correct cargo is being shipped.
– Sample http://www.citd.org/startup/eb/appendix.cfm?sec=90
Export Manager - A Plus Avocado
These commodities, technology or software were exported from the United States of America in accordance with the Export Administration
Regulations. Diversion contrary to U.S. law prohibited.
A-Plus Avocado411 South StreetModesto, CA 97049 USAPhone:123-456-7890 fax 123-456-7899
COMMERCIALINVOICE
Ship To:
Japan
$74,950.00 USDollars Tokyo 665-0921
Total 3-1-2721 Rydo-cho
$700.00 Insurance Fresh Produce
$4,250.00 Freight
$70,000.00 FOB Value
$45,000.00 $0.30 ea 150,000 Haas Avocados - Size 15 AA-15
$25,000.00 $0.25 ea 100,000 Haas Avocados - Size 10 AA-10
TOTALUnit Price Qty DescriptionItem No.
CIP Tokyo, JapanShip Terms JapanCountry
Ocean FreightShip ViaZIP StateTokyo 665-0921City
50% Prepay & 50% Net 90 Day @ invoicePayment Terms 3-1-2721 Rydo-choAddress
56789Order No. Fresh Produce of JapanName
25-Apr-2006Date:
112345Invoice No.:
Sold To:
• Certificate of Origin– Some nations require a signed statement as to
the origin of the export item. – Available through chamber of commerce. – May be required even though the commercial
invoice contains the information – Sample
http://www.citd.org/startup/eb/appendix.cfm?sec=96