Responding to Inquiries from Potential Customers

1. Responding to Inquiries from Potential Customers

2. Provide Pro forma Invoice Inquiries from abroad usually accompanied by request for “pro forma” invoice – A quotation in an invoice format which Includes: • Product description and specifications • Material costs • Price • Quantity • Shipping costs • Delivery terms • Procedures

4. Sample Pro Forma Invoicehttp://www.tradeport.org/tutorial/details/index.html#proforma Sample Pro Forma Invoice PRO FORMA INVOICEFROM: Innovation Technologies983 Stanley Ave.San Diego, CA 93820(619) 567-1938 DATE:May 8, 1995Reference No.:3245Payment Terms:Letter of CreditCountry of Origin:USAEstimated Date Of Shipment:45 daysQuoteValid Through:October 8, 1995SOLD TO: Grupo Estevez, S.A. de C.V.Tamales No. 1 Piso 218378 Cd. Polanco Mexico SHIP TO: Juarez Industriale454 Blvd. Cortez1114 Mexico D.F. Mexico QuantityDescriptionUnit PriceTotal Price100 each Computer MotherboardsFive (5) sealed cartonsGross Weight: 10 lbs. US $ 50.00 US $ 5,000.00 EX FactoryFreight Forwarder FeesAir FreightInsuranceCIF Mexico5,000.00100.001,200.0020.00 US $ 6,320.00Price, availability and delivery subject to confirmation at time of order. Authorized Signature _____________________________Date______________________

5. Sample Pro Forma Invoice See Center for International Trade Development Website http://www.citd.org/startup/eb/appendix.cfm?sec=86

6. To Complete Pro Forma Invoice • Exporters must set a price for their product • Determine the terms of sale

7. 2. Determine (Incoterms) Terms of Sale • Exporter must know the terms before preparing a quotation or a pro forma invoice. • Incoterms are standardized names created by the International Chamber of Commerce (ICC) for describing terms of sale.

8. Diagram of INCO terms http://www.export911.com/e911/export/incoterm

10. Most Common Incoterms

11. Most Common Incoterms

12. FOB Example FOB, New Orleans for 3 ice makers. You as the exporter are responsible for all costs in delivering the goods to New Orleans and loading the icemakers on board a vessel named by the German firm. You are responsible for arranging any export clearances (licenses, taxed, fees). The German firm is responsible for booking space for cargo and pays for the ocean freight.

13. CIF Example CIF (Named foreign port of destination) YCI quotes its German customer CIF Bremerhaven for 3 ice makers. YCI arranges for and pays all transportation costs to the Port of Bremerhaven. YCI arranges and pays for the marine insurance policy. YCI, however, is only responsible for risk of loss until loading of the icemakers on board the vessel in New Orleans.

14. FAS Example YCI, the U.S. exporter, quotes the German firm FAS, New Orleans for 3 ice makers. YCI is responsible for all costs in getting the goods to the Port of New Orleans alongside the nominated vessel prior to sailing time. The German buyer is responsible for booking space, paying ocean freight and arranging for all export clearances.

15. Source for INCOTERMS For a complete list of INCOTERMS, including responsibilities of the parties, see Incoterms 2000. http://www.dsl.co.nz/index.asp?page=incoterm.htm

16. Pro forma invoices should include two statements. • One that certifies the pro forma invoice is true and correct and • another that gives the country of origin of the goods. • The invoice should also be clearly marked "pro forma invoice." • When final commercial invoices are being prepared prior to shipment, it is advisable to check with the U.S. Department of Commerce or another reliable source for any special invoicing requirements that may be required by the importing country.

17. If assistance is needed in figuring CIF or CIP prices, an international freight forwarder can help. The exporter should furnish the freight forwarder with • a description of the product to be exported and its weight and • cubic measurement when packed. • The freight forwarder can compute the CIF price usually at no charge.

18. Document • WHAT EXPORT SHIPPING DOCUMENTS DO I NEED? • vary widely according to the country of destination and the type of product being shipped. • Failure to comply can delayed or end payment; goods could be seized or you could be fined, denied further export privileges, or jailed.

19. International Documentation • 90% of all documents are created by the Exporter • 10% of documents required by exporting country • 90% of documents required by importing country • All documents used by the Importer/customs broker to clear customs • Shipping documents are created by the transportation company

20. International Documentation • Purchase Order • Proforma Invoice • Commercial Invoice • Consular Invoice • Packing List/Slip • Weight List • Certificate of Origin • NAFTA Certificate of Origin

21. International Documentation • Shipper’s Export Declaration • Inspection Certificate • Clean Report of Finding • Bovine Free Certificate • Beneficiary Certificate • U.S. Government Agency Certifications • Export License • Import License

23. Most Commonly Required Documents • U.S. Shipper's Export Declaration • Used by the U.S. Census Bureau to compile trade statistics and to help prevent illegal exports. • The SED and instructions on how to fill it out are available from a variety of sources including the U.S. Government Printing Office (202-512-0000) and the U.S. Census Bureau's home page. • Do I Need to Submit an SED for My Shipment? • Required for any shipment valued at $2,500 or above (If the shipment is valued at over $2,500 but is made up of various commodities falling under several Schedule B numbers none of which is valued at $2,500 or higher, no SED is required.) • Required for any shipment to particular countries, such as Cuba, Libya, and North Korea, and for any shipment requiring a validated export license. • Required for shipments to Puerto Rico, the U.S. Virgin Islands and the former Pacific Trust Territories even though they are not considered exports (unless each Schedule B item is under $2,500). • Shipments to Canada do not require an SED. (Shipments to third countries passing through Canada do need an SED.) • Sample http://www.citd.org/startup/eb/appendix.cfm?sec=89

25. Bill of Lading • Purpose • Contract among three parties to provide transportation of cargo • Consignor -party delivering goods to the carrier; usually the seller • Carrier - party accepting legal responsibility to provide transportation; often the transportation company • Consignee - party entitle to receive the cargo; buyer, bank, an agent • Once the carrier or freight forwarder completes the bill of lading, he becomes bound to forward the goods to the agreed destination in the same condition as they were received.

26. Types of Bill of Lading • Straight bill of lading: • non-negotiable. • allows only the appropriate person specified in the bill of lading to pick up the goods. This is usually the preferred type of bill of lading for beginning importers as it offers the buyer the most protection by prohibiting the release of the goods to anyone but the party specified in the documentation. • Sample http://www.citd.org/startup/eb/appendix.cfm?sec=91

27. Shipper's order bill of lading: • negotiable bill of lading. can be bought, sold, or traded while the goods are in transit and is used for letter of credit transactions. The customer usually needs the original or a copy as proof of ownership to take possession of the goods. • serves as a certificate of ownership or title to the goods. When written to order, it serves as a negotiable instrument through which title is transferred from the exporter to the importer.

28. Air waybill - carrying agreement between the shipper and the air carrier. • In contrast to the ocean bill of lading it is a non-negotiable instrument and serves as a shipping contract and receipt to the shipper. • certifies that the airline has accepted the goods as listed on the air waybill and agreed to carry the goods to the airport of destination in accordance with the conditions of the contract. • Sample http://www.citd.org/startup/eb/appendix.cfm?sec=92

29. Export Packing List • itemizes the material in each individual package and indicates the type of package: box, crate, drum, carton, and so on. • shows individual net, legal, tare, and gross weights and measurements for each package (in both U.S. and metric systems). • The list is used by the shipper or forwarding agent to determine the total shipment weight and volume and whether the correct cargo is being shipped. • Sample http://www.citd.org/startup/eb/appendix.cfm?sec=90

30. A+A Invoice No.: 112345 A-Plus Avocado411 South StreetModesto, CA 97049 USAPhone:123-456-7890 fax 123-456-7899 Date: 25-Apr-2006 COMMERCIALINVOICE Name Fresh Produce of Japan Order No. 56789 Address 3-1-2721 Rydo-cho Payment Terms 50% Prepay & 50% Net 90 Day @ invoice Sold To: City Tokyo 665-0921 State ZIP Ship Via Ocean Freight Country Japan Ship Terms CIP Tokyo, Japan Item No. Description Qty Unit Price TOTAL AA-10 Haas Avocados - Size 10 100,000 ea $0.25 $25,000.00 AA-15 Haas Avocados - Size 15 150,000 ea $0.30 $45,000.00 FOB Value $70,000.00 Freight $4,250.00 Ship To: Fresh Produce Insurance $700.00 3-1-2721 Rydo-cho Total Tokyo 665-0921 USDollars $74,950.00 Japan These commodities, technology or software were exported from the United States of America in accordance with the Export Administration Regulations. Diversion contrary to U.S. law prohibited. Export Manager - A Plus Avocado

31. Certificate of Origin • Some nations require a signed statement as to the origin of the export item. • Available through chamber of commerce. • May be required even though the commercial invoice contains the information • Sample http://www.citd.org/startup/eb/appendix.cfm?sec=96