payments & Foreign travel ads Week 3 Lesson

Methods of payment Payment in Advance Open Account (Paid after) Rare in foreign trade (trust issue) Common in large orders Two are common for small orders: Cash With Order (CWO) – Importer pays for goods when orders placed Cash On Delivery (COD) – Goods are sent and released only after payment of invoice/delivery Only for regular/reliable customers Payment made in a specified period after receiving goods Usually 30, 60, or 90 days after invoice date

Methods of Payment Bank Transfer Bill of Exchange/Draft Most common and fastest for international payments Importer instructs its bank to transfer to exporter’s bank SWIFT Code (inter-bank transfer ID code) Used as a form of credit (payment received after a set period of time) Drawer, Drawee, Payee (usually drawer) Before supplying goods exporter stipulates a B/E and send it to importer (drawee) Sight draft o Fixed date

Letter of Credit Best security for the exporter Exporter agrees to supply goods when a foreign customer opens a letter of credit with reputable bank (issuing bank) The L/C is sent to exporter’s bank (advising bank) with all specifications: Description of goods, time & place of delivery, documentation required, etc. When documents are submitted to the importer’s bank the credit will be released and the supplier will be paid

Confused? L/C Transaction Importer: asks their bank to write an L/C in favor of exporter Importer’s Bank: sends L/C to exporter’s bank Exporter’s Bank: confirms L/C Exporter: ships goods and receives documents from shipping agent. Gives documents to their bank Exporter’s Bank: if documents are correct sends them to importer’s bank and pays the exporter Importer’s Bank: pays back exporter’s bank and gives shipping documents to importer Importer: gives shipping documents to shipping line and receives goods Confused? L/C Transaction

Foreign Travel Advertising You may need to change the image of the country (ex. Some people think of India as poor and dirty) Highlight unique places/aspects of a country (don’t show things that are similar to the readers’ country) You may need to inform readers about little know places (weather, customs, currency) If necessary ease any fears

Things to consider Remember who your readers are (think of what they want) What kind of tourists do you want? TASK: Write a headline and 100 word copy ad for Italy. Decide who your readers are: - US backpackers (20-30 years old) - Australian retirees - French families