Once you have established that your supplier is a reliable company and you have decided to go with them, there is bound to be some discussions and negotiations with your seller regarding the terms of sale, payment terms, credit terms etc etc..
For your own peace of mind it is always good to enter into a sales contract with your supplier which should clearly outline :
1 Responsible parties
2 Responsibility of each party
3 Agreed terms of delivery and terms of sale
4 Agreed pricing on the product
5 Agreed place/point of delivery e.g. Port, warehouse, Door etc
6 Payment methods outlining whether payment would be on COD, Letter of Credit etc
7 Any technical issues such as product licensing, permits, quotas
If it is your first time drafting a sales contract, it is highly recommended that you use a good contract lawyer to finalize the contract.. While this may seem as an added expense, it will be a one-time expense but something that will safeguard you in the future..
It is recommended that you read, understand and identify the most suitable Incoterms® for your business before you enter into discussions and negotiations relating to your terms of sale/business.. A lot of fraud, duping and mistakes happen because the buyer or seller didn’t understand the Incoterms® to be used for a particular transaction..