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News > Pay attention to the eight risks of export trade!

With the advent of economic globalization, cultural and trade exchanges between countries are becoming more and more frequent, and commodities begin to be exported and sold continuously. China's export trade has also developed greatly in recent years. With the rapid development, there will inevitably be certain risk factors. Therefore, when carrying out export trade, enterprises need to do a good job in risk control, take precautions and avoid risks.

Facing the increasingly complex situation of the international foreign trade market and the rising risks faced by export enterprises, we sorted out the eight common risks in export trade and reminded foreign trade enterprises to be vigilant against risks.

1. Orders suddenly increased sharply

When the size of the buyer is average, the number of orders placed to you suddenly increases, and these orders are not transferred from other suppliers. It is necessary to pay attention to whether the buyer has sufficient downstream sales capacity. If the buyer is too optimistic about downstream sales, the risk of blind procurement may eventually be transferred to the supplier.

2. Deal with multiple suppliers at the same time

If the same type of products are purchased in multiple enterprises, what the buyer really cares about may not be the supply capacity of the export enterprises, but to obtain more suppliers to sell on credit, so as to occupy the upstream funds for their own financing. Once the buyer's capital chain is difficult, it will be transmitted to the upstream enterprises, and the impact is often wide.

3. Downstream is a single emerging market

When the buyer tells you how much market share he occupies in a certain market, don't be happy too early. You need to worry about the sustainability of this market advantage. For example, when the single market is a high-risk emerging market, it needs to be treated as significant negative information. Any disturbance in the downstream market will seriously affect the operation of the buyer. There are a large number of middlemen in the United Arab Emirates and Hong Kong, China. Due to the differences in the terminal market, the risk of the buyer in the United Arab Emirates is much higher than that in Hong Kong, China.

4. High debt operation

When the buyer asks for payment, the reason explained to you is that it has high liabilities and hopes to get your support. At this time, it is necessary to pay attention to the impact of high liabilities on payment for goods. When the operating income cannot cover the financing cost, or when the financing institution tightens the policy, the buyer's capital situation will be seriously affected, resulting in arrears to the upstream suppliers. You need to find ways to understand the details of high debt, including the actual debt level, financing from banks or other institutions, financing maturity and the continuity of financing policies.

5. The credit term continues to extend

Nowadays, credit sales with the characteristics of modern international trade is being widely used and has become an important means for Chinese enterprises to improve their competitiveness. Due to the inert thinking of habitual things, they often lack enough vigilance to the buyer's request for continuously extended credit period. When the credit period required by the buyer deviates from industry practice and far exceeds its downstream sales collection period, it is necessary to beware of whether the Buyer intends to misappropriate the funds for other purposes.

6. Deviation from main business

When you learn that the buyer is making a large-scale non main business investment, what you need to do is not to lament the strength of the buyer, but to care whether the investment will affect its main business and then affect the payment for your goods. According to experience, few buyers will make up for trade losses through investment income, and more will sacrifice trade to make up for investment losses.

7. Engaged in offshore procurement

With the development of international trade, more and more buyers use legal means to protect their rights and interests in order to reduce the consequences caused by business failure. Typically, a well-known buyer conducts offshore procurement by establishing a procurement company in a third country (region). Due to the independence of the legal person status of the procurement company, it is difficult to trace its payment responsibility to its powerful parent company.

In recent years, in the statistics of China's customs, there are few businesses exported to Virgin Islands, Marshall Islands and other places, but the buyer of export contracts accounts for a considerable proportion. It is more common for buyers to establish purchasing companies in Singapore, the United Arab Emirates, Hong Kong, China and other countries and regions.

8. Buyer's imports from highly regulated countries

In international trade, whether the buyer can safely receive the payment depends not only on the buyer's own credit and strength, but also on the buyer's country (region). In some countries with high control over trade and foreign exchange, such as Iran and Venezuela, there are some powerful buyers who have a strong willingness to pay for goods abroad. However, due to the influence of national policy control, there may not be enough foreign exchange for conversion, or the payment for goods cannot be made smoothly.

Export trade has promoted China's economic growth and is China's pillar industry in recent years. In the process of export trade, once there is a dispute, it will be very difficult to solve. Therefore, enterprises should scientifically control the risk, be able to judge the type and nature of the risk in time, formulate corresponding preventive countermeasures in time, and maintain the interests of enterprises and the stability of national economic development