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ONLINE CERTIFICATE IN EXPORT MANAGEMENT 2012
COURSE 4: WRITING YOUR EXPORT MARKETING AGREEMENTS
EXPORT CONSIGNMENT AGREEMENT
NOTE:
This is a copy of the actual page from the online course.
Click here
to review the complete table of contents for
the chapter in which it appears.
PURPOSE OF A CONSIGNMENT AGREEMENT
An Export Consignment Agreement is designed for:
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(1)
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Exporters who want to stimulate their export sales by making their
merchandise available without payment
for display, purchase and
immediate delivery in their foreign markets, and
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(2)
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Export Sales Representatives who do not want to purchase the merchandise upfront but agree to
promote the exporter's products and pay the exporter after the sales have been completed.
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When an exporter enters into a Consignment Agreement with an export sales representative, they agree to
ship the merchandise (usually at their expense) and postpone payment
until either (1) the goods have
been sold and payment received by the representative, or (2) until a future date when the merchandise,
if it has not been sold, must be returned (usually at the exporter's expense) to the exporter's
domestic facility or another location requested by the exporter.
MAJOR RISK WITH CONSIGNMENT
If the merchandise is not sold and the sales representative refuses to return the items to the
exporter, or it is sold but the sales representative refuses to pay the exporter, the exporter's only
legal recourse (if they did not purchase insurance against non-payment available through the
Export
Import Bank of the United States
or other sources) would be to seek payment in the local court system. This can be
very costly, frustrating and time-consuming!
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Copyright 1987 - 2012, Export Institute of the United States
Telephone: (952) 943-1505, http://www.exportinstitute.com
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