Importers’ sales and quantity terms determination in futures and spot transactions

Sales process and delivery process of futures trading

In the importer’s futures trading, selling futures refers to selling the goods before they arrive at the port. There are usually two methods in the sales process: one is to make targeted orders based on the customer’s ordering needs; the other is to import the products themselves when funds are sufficient and then sell the products externally.

The futures sales process generally includes the following steps:

1. Sign an intention purchase and sale agreement with the customer;
2. Customer pays advance payment or deposit;
3. After the goods arrive at the port, customs clearance is completed and put into storage, and the customer is notified to pick up the goods;
4. The customer pays the balance;
5. Arrange logistics loading and delivery;
6. Provide after-sales service.

The shipping process is more complicated and requires the following steps:

1. Complete customs clearance and put the goods into warehouse for sale;
2. Notify customers to pay for goods according to the pre-sales notice;
3. After confirming that the payment has been received, arrange delivery from the warehouse;
4. After actually copying the code of the goods, issue a delivery note based on the actual weight and notify the customer to pay;
5. Track and record sales details and archive them;
6. Print the sales slip and send it to the warehouse for shipment with the financial seal;
7. Register remittance details and sales order details for reconciliation.

Notes on spot trading

Spot sales refer to the sale of goods currently owned by the company. In spot transactions, multiple departments need to work closely together, including the sales department, import purchasing department, warehousing department, and logistics department. After the sales department’s order is confirmed by the finance department and the customer’s payment has been received, the warehousing department will release it and notify the logistics department to arrange logistics and shipment to ensure that the goods are safely and efficiently delivered to the customer’s designated location.

Key elements in determining quantity terms of import contracts

The quantity clause is an indispensable part of an international contract for the sale of goods. A contract lacking this clause will be deemed invalid. Quantity clauses mainly cover four parts: the quantity of the goods traded, the unit of measurement, the measurement method, and the over- and under-packaging clauses. Among them, the unit of measurement needs to be selected based on the type and characteristics of the commodity and the wishes of both parties to the transaction.

When determining the quantity, importers need to pay attention to the following issues:

1. Clear the weights and measures system and measurement methods. Due to system differences in different countries, the applicability of measurement units may be affected.
2. The same unit of measurement may represent different quantities in different countries, so be sure to clarify the weights and measures system used.
3. Set reasonable flexibility and use over- and under-packaging clauses to avoid losses caused by quantity fluctuations.

Some common measurement methods include gross weight, net weight and other weight methods, and importers need to make choices based on specific circumstances.

Consideration factors when determining the quantity of imported goods

In order to reasonably determine the quantity of imported goods, importers should consider a variety of factors, such as:

1. Actual market demand: Excessive imports or insufficient imports will lead to unsaleable or out-of-stock products respectively, affecting the market position of the importer.
2. Changes in international market conditions: Timely adjust transaction quantities according to price trends to ensure maximum transaction benefits.
3. Ability to pay: The matching of liquidity and market demand is crucial to quantity decisions.
4. Supplier’s credit standing and production capacity: Choosing a strong and reputable supplier can help reduce transaction risks.
5. Specific trade terms provided by suppliers: Through comparison, choose the best terms to expand or reduce the import quantity.

To sum up, importers must fully consider the sales process, quantity terms and market factors during contract signing and commodity transactions to ensure the legality and economic benefits of the transaction.