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Video 1
D: It's good that we've settled on the questions of price, quality,
quantity and packing.
Shall we discuss the terms of payment now?
L: Good idea. Let's get down to business.
Since this is our order in this field, we would like a lump sum
payment.
It saves time for both of us.
D: Lump sum advance payment?
You mean we make all the payment before the goods are delivered?
I don't think that's international practice.
Besides, it's a bit demanding for such a large trial order.
L: That's our usual way when starting a now business relationship.
What terms do you suggest?
D: I wonder if you can accept payment by installments.
You know, our goods will also be delivered in partial shipment.
L: What do you mean exactly?
D: I think the payment can be divided into two installments.
70% of the total can be paid at first delivery and the other 30%
after final acceptance.
L: Well, I see your point.
But normally we conduct our international sales with an L/C. But
1
you rejected that possibility.
Actually, an L/C provides us with guaranteed payment from the
bank.
How about cash on delivery?
D: That sounds reasonable.
But as our order is quite substantial this time, cash on delivery
will put us in a very difficult position with backward cash flow.
Maybe we can make an advance payment to show you our
sincerity.
L: How much do you have in mind?
D: What about 25% of the total? In that case, we'd pay 25% in
advance and pay 75% on final acceptance.
L: Ok. You drive a hard bargain!
I'll accept your last proposal, but my company requires the final
75% payment to be paid within one month of the final delivery.
Do you think that bill be ok for you?
D: That's al
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