For beginners involved in import and export trade for the first time, it is essential to master the correct trading procedures. Here are some basic import and export trade knowledge points to help you better understand the whole process.

Start of trade: Inquiry and quotation

International trade usually begins with inquiries and quotations for products. The export quotation shall include the quality level, specifications, packaging requirements, order quantity, delivery date, mode of transportation and material information of the product.

Common forms of quotation include:

FOB (Free on board)

CFR (Cost and Freight)

CIF (cost, insurance and freight)

Order and contract

Once the buyer and seller have reached an agreement on the quotation, the buyer will place the order formally and negotiate with the seller on relevant matters, and then sign the Purchase Contract. The contract shall specify the commodity name, specification, model, quantity, price, packing, place of origin, time of shipment, terms of payment, method of settlement, claims, arbitration and other contents.

The signed "Purchase Contract" is usually in duplicate, with each party holding one copy, and stamped with the company's official seal to confirm the validity.

Payment method

There are three most common methods of payment in international trade:

Letter of credit

Letters of credit are divided into clean letters of credit and documentary letters of credit.

A documentary credit needs to be accompanied by the specified documents.

A letter of credit is a safe document to ensure that the exporter can recover his money.

The shipment period of the export goods shall be completed within the validity period of the L/C.

All major state-owned banks in China are able to issue letters of credit.

TT payment method

Settlement by foreign exchange transfer.

The customer remits the money to the exporter's designated foreign exchange account.

Direct payment method

Direct delivery and payment between seller and buyer.

Stocking and packing

Stock preparation is a key link in the trade process and needs to be carried out in strict accordance with the contract requirements.

Verify goods quality and specifications.

Ensure quantity meets contract requirement.

Arrange the preparation time according to the L/C to connect with the shipment date.

The packing form should be selected according to the type of goods (such as cartons, wooden cases, woven bags, etc.) and comply with the shipping mark (transport mark) requirements stipulated in the letter of credit.

Customs clearance procedure

Commodity inspection

The goods subject to statutory inspection shall obtain an export commodity inspection certificate.

Commodity inspection includes acceptance of inspection, sampling, inspection and issuance of certificates.

Customs declaration

Professional customs declaration personnel with relevant documents (such as packing list, invoice, declaration power of attorney, export settlement and verification, copy of export contract, commodity inspection certificate, etc.) to the customs clearance procedures.

Packing list, invoice and other documents are the supporting documents provided by the exporter.

Customs declaration power of attorney is used to prove the authority of customs declaration agency.

The export verification form is the certificate for the export unit to apply for tax refund.

Commodity inspection certificate is an effective proof to ensure that the goods meet the legal requirements.

Mastering the above basic processes and knowledge points can help foreign trade novices carry out import and export trade business smoothly