X5MB. Lectura Grupo 4.

MAKING AN AGREEMENT

Once you have agreed to represent the manufacturer as the export agent, you need to have a written and signed contract to bind this agreement. Your attorney should be the one to draw up this contract - later you can just use the same one, substituting names of other manufacturers.

Basically, the contract is between the manufacturer and you as the export representative. You are granted exclusive rights to distribute goods to all countries except those they already distribute in.

The manufacturer will pay you the specific commission quoted to the distributors on top of the price of goods. The company will also provide catalogs and samples for your use in distribution.

You, the export representative, in turn will promise to do everything possible to make contacts and distribute the manufacturer's goods in foreign territories.

The terms of the contract should then be stated: how many years the contract will be signed for, the terms of cancellation by either party voluntarily or because of no sales action over a certain period of time.

THE SALE

You've made your contacts with foreign distributors who will buy the merchandise. You have a signed contract with an American manufacturer that will deliver the goods. Perhaps one of the distributors now asks for a firm quotation on the price of a certain amount of goods.

You go to the manufacturer and get a price quotation on the quantity of goods. It should be valid for a certain stated period. The manufacturer may agree to deliver the goods to the ship, handling the freight to that point, or you may need to make arrangements from the factory.

You add on the commission you want to the price of the goods. Then you add on all the extra costs of getting the merchandise from the factory to the warehouse of the distributor.

If you've made an agreement with a foreign import/ export company, their representatives may take over the shipping, paying you the price of the goods and your commission. That's the easiest, but your commission will have to be reasonably lower.

If your sale is to a company that will distribute the goods wholesale or retail from its premises, you have to arrange all the transportation.

TERMS OF SHIPPING

You will become more familiar with the terms of shipping used in quoting prices and delivering goods as you gain experience. Your responsibilities vary with the terms of the agreements and orders. Check with your freight forwarder to be clear about your responsibilities.

A bill of lading is a receipt for goods shipped. It is signed by the agent of a ship or common carrier and assures the buyer that the goods were unloaded in the same condition as they were accepted. These are the documents you'll need to produce for your banker to release the letter of credit.

FOB means free on board. The seller delivers the goods to a certain destination with no additional charges. The seller insures and takes the responsibility until that point. The buyer takes the responsibility and pays the charges after that. For example, FOB New York means the seller's price quotation includes full responsibility and shipping to New York.

FAS means free alongside. The seller delivers the goods to the ship that will carry the merchandise. The buyer pays to load onto the ship and takes responsibility from there. FAS New York, for example, means that the seller will deliver and store the goods until they are ready for loading onto the ship.

C & F means cost and freight. The seller pays the freight charges. The buyer insures the merchandise and takes full responsibility after the destination.

CIF means cost, insurance and freight. The seller is responsible for the value and condition of the goods, and pays both insurance and freight charges to a certain point. The buyer is responsible from there.