Transcript Leaves - STIKOM Surabaya

Business
Correspondence 3
Business Correspondence 3
• 2 credits (100’)
• Sources:
– Models Business Letters, Emails & Other
Business Documents by Shirley Taylor
– Commercial Correspondence by A. Ashley
• Scoring system:
– Class assignment, homework, quiz : 40%
– Mid test
: 30%
– Final Test
: 30%
Meeting 1-2: Introduction to International
Trade
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Commission agents
Goods on consignment
Indents
Bill of landing
Import documentation and procedure
Bonded warehouse
Meeting 3: Banking
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Kinds of bank accounts
Expression in banking
Meeting 4: Banking (Home Business)
• correspondence with bank
• bank loans and overdraft
• other banking correspondence
Meeting 5: Banking (international
business)
• Bankers’ draft
• Bankers’ transfer
• Bill of Exchange
• Documentary bills
• Bankers’ commercial credits
Meeting 6: Inquiry letters to insurance
Meeting 7: Claims for insurance
Meeting 8-9: Reports
• Components of reports
• Writing Reports
Meeting 10-11:Proposal
• Components of Proposal
• Writing Proposals
Meeting 12-13: Business Plan
• Components of business plan
• Samples of business plan
• Writing business plan
What is International Trade?
exchange of capital, goods, and
services across international
borders or territories.
Domestic and International
Trade
• factors of production such as capital and
labor are typically more mobile within a
country than across countries
• international trade is mostly restricted to
trade in goods and services, and only to a
lesser extent to trade in capital, labor or
other factors of production.
Regulation of international trade
• regulated through bilateral treaties between two
nations
• The regulation of international trade is done
through the World Trade Organization at the
global level, and through several other regional
arrangements such as MERCOSUR in South
America, the North American Free Trade
Agreement (NAFTA) between the United States,
Canada and Mexico, and the European Union
between 27 independent states.
Risk in international trade
• Buyer insolvency (purchaser cannot pay);
• Non-acceptance (buyer rejects goods as
different from the agreed upon specifications);
• Credit risk (allowing the buyer to take
possession of goods prior to payment);
• Regulatory risk (e.g., a change in rules that
prevents the transaction);
• Intervention (governmental action to prevent a
transaction being completed);
• Political risk (change in leadership interfering
with transactions or prices); and
• War and Acts of God.
Transactions usually takes place in
the following ways:
• The overseas buyer employs a
commission agent in the exporter’s
country.
• The exporter employs an agent living in
the buyer’s country.
• The exporter sends the goods to a factor
in the importing country for sale “on
consignment”
• The exporter → The consignor
• The importer → The consignee
• Buying and selling overseas → fax → New
technology → EDI (Electronic Data
Interchange) → reduces paperwork.
Purchasing goods from abroad
(Importer): Contact Exporters requesting
quotations/samples. → (Exporter): Provide
quotations/samples → Place order with supplier
(indent with an agent) → Arrange with shipping
company → Arrange transport of goods to dock
→ Arrange insurance → Shipping company issues
Bill of Lading → Arrange insurance → Send
shipping documents → Notify importer of date of
sailing and arrival.
On receipt of goods, pay dock
charges if necessary, plus any
customs charges. → Arrange
transport from docks to own
premises. → send payment to
exporter.
Commission Agent
• Individual or firm employed to buy or to sell in
their own names for the accounts of the
principal.
Tasks:
• Obtaining quotations
• Placing orders
• Supervising fulfillment and arranging for the
dispatch of the goods.
• Collect payments for the principal and hold liable
for payment should the buyer fail to pay.
Agent acknowledges order
Your order number C75 to 10 February for 1500 fibreglass
wash basins in assorted colours will be placed without delay.
We have already written to a manufacturer in North London
and will do everything we can to ensure early shipment.
We note your request for the basins to be arranged in tens
and packed in cartons rather than wooden containers in order
to save freight.
We shall arrange insurance on the usual terms and the
certificate of insurance will be sent to you through our bankers
along with our draft bill and other shipping documents.
Agent requests quotation from
manufacturers
We have received an order for 1500
(fifteen hundred) 40 cm circular
fibreglass was basins in assorted colours
for shipment to Bahrain. Please quote
your lowest price fob London and state
the earliest possible date by which you
can have the consignment ready for
collection at your factory.
Your prize should include arrangemeny of
the basins in tens and packing in cartons
of a size convenient for manual handling.
Goods on Consignment
• Goods which an exporter sends to an
importer, the invoice will not immediately
be issued.
• The goods is sold and then the exporter
will draw up an invoice for the stock has
been sold.
Company in Nairobi requests goods on
consignment
Buyer’s request
We are the largest department store in Nairobi and have recently
received a number of enquiries for your stainless steel cutlery. There
are very good prospects for the sale of this cutlery, but as it is
presently unknown here we do not feel able to make purchases on our
own account.
We would like to suggest that you send us a trial delivery for sale on
consignment terms. When the market is established we would hope to
place firm orders.
If you agree we would render monthly accounts of sales and send you
the payments due after deducting expenses and commission at a rate
to be agreed. Our bankers are the Nairobi branch of Midminster Bank
Ltd, with whom you may check our standing.
We believe our proposal offers good prospects and hope you will be
willing to agree to a trial.
Company in Nairobi requests goods on
consignment
Seller’s acceptance
Thank you for your letter proposing to receive a trial delivery of our
cutlery on consignment which we have carefully considered.
We are sending you a representative selection of our most popular
lines and hope you will find a ready sale for them. Your suggestion to
submit accounts and to make payments monthly is quite satisfactory,
and we will allow you commission at 10% calculated on gross profit.
The consignment is being shipped by SS Eastern Prince, leaving
Southampton for Mombasa on 25 January. We will send the bill of
lading and other shipping documents as soon as we receive them.
Meanwhile a pro forma invoice is enclosed showing prices at which the
goods should be offered for sale.
We are confident that this cutlery will prove popular in your country
and look forward to trading with you
Indents
• Foreign buyers who placed orders through
commission agents or commission houses
in the supplier's country.
• An order to an agent to buy goods on
behalf of foreign buyer.
Tasks:
Give details of the goods required, prices,
packing and shipping instructions and
method of payment.
Foreign buyer deals with commission house
Buyer (in Egypt) sends indent to commission house (in England)
We have received the manufacturer’s price list and samples
you sent us last month and now enclose our indent number 762
for goods to be shipped by the SS Merchant Prince due to
leave Liverpool for Alexandria on 25 July. The indent contains
full instructions as to packing, insurance and shipping
documents.
It is important for the goods to be shipped either by the
vessel named, or by an earlier vessel; if there are any items
which cannot be supplied in time for this shipment they should
be canceled. When we receive the goods we shall pay you the
agreed agency commission of 5%. The account for the goods
will be settled direct with the manufacturers.
This is a trial order and if it is met satisfactorily we shall
probably place further orders
Agent places order with a firm in Manchester
We have just received an order from Jean Riachi & Co of
Mansura, Egypt. Particulars are shown in the enclosed official
order form together with details of packing and forwarding,
case marks, etc.
The goods are to be ready for collection at your warehouse in
time to be shipped to Alexandria by SS Merchant Prince due
to sail from Liverpool on 25 July or by an earlier vessel if
possible. Prompt delivery is essential and if there are any
items which cannot be included in the consignment they should
be canceled.
Invoices priced ex warehouse should be in triplicate and sent
to us for forwarding to our customers with the shipping
documents. The account will be settled by our customers
direct with you. As del credere agents, we undertake to be
responsible should the buyer fail to pay.
This is a trial order and if it is completed satisfactorily it is
likely to lead to further business. Your special care would
therefore be appreciated.
Please confirm by return that you can accept this order, and
arrange to inform us when the goods are ready for collections.
Meeting 2
Bill of Lading
• Serves as the consignor’s receipt for the goods
taken on board ship.
• Describes the consignment, its destination, and
who it is for.
• A document of title to the consignee to give right
to claim the goods to which it refers.
Bill of lading is usually prepared in a set of 3
originals and 3 copies. → state the name of vessel,
the time of sailing, marks and identification on cargo,
the delivery address and the statement “ clean shipped
on board” →goods are not damaged ,,, on board ship.
Signed by the chip’s captain.
Import Documentation and Procedure
• Before the ship arrives, the importer (either a
merchant dealing on their own account or an
agent) will usually have received the shipping
documents.
• The original documents would go through the
bank, but it is normal practice for photocopies
to be despatched by a courier service so that
the importer can go through the import
procedures before the goods actually arrive.
Import Documentation and Procedure
Shipping documents include:
1. An advice of shipment specifying the
goods and stating the name of the
carrying ship, its date of sailing and
probable date of arrival.
2. A bill of lading
3. An invoice (pro forma if the goods are
imported on consignment)
Import Documentation and Procedure
When the ship arrives, the importer must obtain
release for the bill of lading and proceed as
follows:
1. The importer must endorse the bill of lading and
present it to the shipping company, or their
representative, at the port
2. The freight must be paid (if not already prepaid by
the exporter) and any other charges due to the
shipping company.
3. The importer must prepare and submit the necessary
import entries on official forms provided by the
appropriate Customs authorities
An import transaction
(a). Importer (London) places order (Japan)
Our order for 20 Super Hitachi Hi-Fi Systems
(SDT 400) is enclosed at the cif price of $550
each, as quoted in your letter of 10 June.
Through the Midminster Bank Ltd, 65 Aldwych,
London WC2, we have arranged with the Bank
of Japan, Tokyo, to open a credit in your favour
for $6000 to be available until 30 September
next.
Please let us know when the consignment is
shipped.
An import transaction
(b) Importer opens credit
The importer writes to the Midminster
Bank in London opening credit
I have completed and enclose your form for
an irrevocable credit of $6000 to be opened
with the bank of Japan, Tokyo, in favour of
Kikuki, Shiki & Co, Tokyo, for a
consignment of music systems, the credit to
be valid until 30 September next.
An import transaction
(b) Importer opens credit
When the consignment is shipped the
company will draw on the Bank of Japan at
30 days after sight; the draft will be
accompanied by bills of lading (3/3),
invoice and certificate or policy of
insurance.
Please confirm that the credit will be
arranged
An import transaction
(c) Supplier in Japan presents documents to
Bank of Japan, Tokyo
We enclose a 30 days’ sight draft together with
bill of lading (3/3), invoice, letter of credit and
certificate of insurance relating to a consignment
of music centres for shipment by SS Yamagata to
Videohire Ltd, London.
Please send draft and documents to the
Midminster Bank Ltd, 65 Aldwych, London
WC2 $LS, with instructions to hand over the
documents to Videohire Ltd against their
acceptance of the draft.
An import transaction
(d) Supplier sends advice of shipment
YOUR ORDER NO 825
We thank you for your order for 20 Super
Hitachi Music Centres. I am glad to say we
can supply these immediately from stock.
We have arranged to ship them to your
London warehouse at St Katharine Docks,
London by SS Yamagata sailing from
Tokyo on 3 August and due to arrive in
London on or about the 25th.
An import transaction
(d) Supplier sends advice of shipment
The shipping documents will be delivered
to you through the Aldwych Branch of the
Midminster Bank Ltd against your
acceptance of the 30 days’ sight draft as
agreed in our earlier correspondence.
We hope you will find everything
satisfactory.
An import transaction
(e) Importer acknowledges consignment
ORDER NO 825
Your consignment of Music Centres
reached London on 27 August.
Thank you for the care and promptness
with which you have fulfilled our first
order. We expect to place further orders
soon.
Bonded Warehouse
Warehouse whose owners have entered
into a bond with the Custom authorities as
a guarantee that the goods will not be
removed until duty on them has been paid.
Clearance of goods from warehouse
This letter is from a tea blender to their broker,
who has bought a quantity of tea and holds the
delivery order issued by the importer.
We refer to the 12 chests of Assam, ex City of
Bombay, which you bought for us at the
auctions yesterday and for which we
understand you hold the delivery order.
Please clear all 12 chests at once and
arrange with William Transport Ltd to deliver
them to our Leman Street warehouse
Useful Expressions
Enquiries and orders
Openings
1. Thank you for your quotation of… and for
the samples you sent me.
2. One of our best customers has asked us
to arrange to purchase…
3. Your letter of … enclosing indent for ..
Arrived yesterday.
Useful Expressions
Enquiries and orders
Closes
1. Please deal with this order as one of
special urgency.
2. We look forward to receiving further
indents from you.
3. We thank you for giving us this trial order
and promise that we will give it our
careful attention.
Useful Expressions
Consignments
Openings
1. We regret that we cannot handle your
goods on our own account, but would be
willing to take them on a consignment
basis.
2. We have today sent a consignment of …
by SS Empress Victoria, and enclose the
shipping documents.
3. The consignment you sent us has been
sold at very good prices.
Useful Expressions
Consignments
Closes
1. Please of course credit our account with
the amount due.
2. We look forward to hearing that you have
been able to obtain satisfactory prices.
3. We will send you our account sales, with
banker’s draft, in a few days.
4. We enclose our account sales and shall
be glad if you will draw on us at 2 months
for the amount due.
References
Taylor, Shirley. 2005. Model Business
Letters, Emails & Other Business
Documents. Harlow: Pearson Education
Limited
Ashley, A. 2003. Commercial
Correspondence. Oxford: Oxford
University Press.
King, F.W & D. Ann Cree. English Business
Letters. Singapore: Longman Singapore
Publishers. Pte. Ltd.