II. The Process of Exporting
Generalized Process of Export
Order received
Letter of Credit or other payment document opened
Production and pre-export phases
Preparation of documents (EUR1, FORM A, specified invoice, licenses and permits,
certificates of origin, etc.)
Instructions to forwarder and customs agent
Checking the prices of freight, insurance and forwarding
Commercial export (at the port facilities or customs terminal)
Receipt of documents (bill of lading, confirmed certificate of origin, etc.)
Presentation of documents at the bank and their transfer to the buyer’s bank
Payment received
The Phases of the Export Process
Phase A – Decision
Phase B – Preparations
Phase C – Performance
Phase D – Post shipment
Phase A – DECISION
Collect Information (internet, specialized databases, market
research, meetings, travel, fairs and so on)
Proforma Invoice
Production, quantity, quality, delivery terms, licensing
Price offer (firm offer)
Sale or Supply Contract
MAKE SURE THAT …
You are allowed to export the goods (no export restrictions
on your goods)
Is there credit available for purchasing imported and domestically produced raw
materials and parts – going into your exported goods?
Can you honor the order? Do you have sufficient capacity, the right manpower,
the needed financing? It is better to say no than to renege on a contract.
Phase B – PREPARATIONS
Import of raw materials / parts (imported or foreign inputs)
Purchase of imported raw materials / parts in the local markets (domestic or
local inputs)
Financing the imports
Financing the production
Production
Preparation of documentation
Engaging customs agents and international forwarders
Insurance
Quality certification
Export license
Freight and transport arrangements
Certificate of origin
Consular confirmation
Phase C – PERFORMANCE
Forwarding instructions to the customs agent
Packing
Withdrawal by customs agent
Preparation of invoice and specifications
Preparation of VAT claimback
Inspection of exported goods by authorities
Warehousing at the port
Custom clearance
Inspection of exported goods by the client
Port clearance
Authorization to load
Loading and release of documents
Receipt of bill of lading
Receipt of confirmed certificate of origin
Receipt of other documents
Phase D – Post Shipment
Financing the documents (=receiving payment)
Presentation of documents in local bank
Statistical registration
Tax and port tax rebates (in some countries)
Pricing the Exported Goods
Fixed Costs (Overhead) – Administration, rent,
accounting, amortization / depreciation, etc. Should be divided by man-hours or
product units to determine their contribution to the costs.
PLUS
Variable Costs – Directly related to the production process. Wages, raw
materials, fuel, etc. Increases with increased production.
Incoterms Costs – See Incoterms hereunder
Transporting the goods from factory to export port or terminal
Shipping the goods from export port or terminal to import port or terminal
Transporting the goods from import port or terminal to buyer.
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