What Kind of Payment Terms do You Accept?
We Accept T/T Payment for all Countries.
Under T/T terms of payment, 30% down payment is minimum request and only acceptable for standard products. For the customized developed products, 50% down payment is minimum as the risky of cancel order will bring huge losses to us.
EMAC already had few issues with customers, that we get goods produced after received 30% down payment, but customers just disappear after we get goods produced and ready to ship. Its okey for us to resell the goods for the popular demand goods, but some of products is little bit special, and its very difficult for us to sell them out.
In the year of 2017, we received an order for a marine propulsion system including engine & gearbox, with deposit received, customer never comes back to pay balance and arrange shipping, and that engine is still in our warehouse till now, brings big losses to us, this forced us to raising up down payment rate for some countries and regions. Especially for the special products, a higher than 50% deposit requirement might be added to the customize developed products.
Regarding with the balance, we only accept balance paid before shipping.
in the year of 2014, EMAC had bad experience that we shipped products before all balance collected, with full trusted to customer based on years of relationship, even with their letter of guarantee of payment balance within 90 days of receiving goods, that balance still not collected till now. From that case, EMAC can’t trust any letter of guarantee from customers’ words and balance must be collected before shipping, we not accept orders that required to pay balance after we shipped goods.
EMAC used to accept the terms of pay balance against bill of lading before, we were happy with some trusted partner before, and don’t have issue with trusted ones, but some cases come to EMAC, that some countries custom have policy that the consignee can get goods without original documents, which bring lot of losses to many Chinese companies including EMAC, so we are forced to close terms of payment that pay balance against bill of lading.
We can L/C for the Companies from a Country of Credit with Famous Bank Only.
L/C, letter of credit, used to be most safe terms of payment for both buyer and seller side. EMAC was very familiar and welcome L/C payment cause in some point of view, L/C is even more safe for EMAC compares to 30% deposit T/T terms of payment.
But things changed in the year of 2015, EMAC received an order of 18 units super silence generator set, that powered by DCEC 4BT3.9-G1 G-drive engines, its an order from Ghana, with L/C terms of payment, all the behaviors of customers are just exactly like other customers, asked specifications, asking for technical data sheet, bargain prices, and checking shipping details, with a additional request of L/C payment from a bank in London, UK, if the L/C is issued by banks in Ghaha, we will reject it for sure, but based on the trust to bank in London, and fully trusted to L/C payment, we signed contract with customer and arranged production accordingly.
Everything are normal, we received original L/C payment documents, and processing everything just like other orders, we booked shipping, and goods ready to ship, just few hours before we shipped the generator set out of our factory, we received the warning from our shipping partners, that the government supported release goods without any original documents started in Angola, and have trends to spread to other west African countries.
Till now, according to the information from Ministry of Commerce of the People’s Republic of China, more and more countries have policy of release goods without original documents, these countries including Brazil, Nicaragua, Guatemala, Honduras, El Salvador, Costa Rica, Dominica, Venezuela and other central and South American countries, as well as Angola and Congo. This situation destroy the trust between companies in different countries, also destroyed the trust foundation of L/C terms of payment.
Especially under the COVID-19 pandemic, economic situation is bad in almost every country including China, this making EMAC more and more carefully and we almost temporary close the L/C terms of payment.