Exporting is merely a selling but when it is selling at home, it does not bother you because
you are in personal contact with a buyer for which you do not need to comply with several
procedural requirements including filling and exchanging of a lot of documents. But the
difference comes when you intend to sell to some one who is thousands of miles away from
you, speaking different language, having different customs, preferences, currency and
import regulations. In order to facilitate trade with other countries, certain sets of rules
have been developed by the trading nations over the centuries, which are normally
followed in foreign trade today. The International Trade is governed by rules made by the
World Trade Organisation (WTO). Details on WTO can be obtained from Information
Advisory Centre (IAC) of the EPB.
SELECTION OF A PRODUCT
If you want to enter export trade, the first thing you have to do is to decide about the
product, which you intend to trade. You should have intimate knowledge about the
product and sources of supply. If you have varied sources of supply, you will have no
problem in procurement and shipment. But if you produce the product yourself at effective
cost and exercise quality control, then you can become a successful exporter within
shortest possible time. You can also analyse which products are exported to which
country. This information is available in the IAC of EPB.
OPENING OF AN OFFICE
After selection of product, you may open an office, give it a name, print letterheads, install
phone and fix a signboard on your business premises.
REGISTRATION FOR EXPORT
Previously it was mandatory to register your firm as an exporter for-five years from the
nearest office of the EPB against payment of nominal fee. However registration
procedures for both imports and exports have been abolished and now registration is
not required for either export or import.
SELECTION OF MARKET
The exporter cannot go to every country in the world to persuade people to buy his
product.
Even the largest international firms do not trade with the whole world and not every
country can or will buy what a particular exporter may sell to them. In view of scarce
resources and shortage of experienced marketing personnel, the exporters should be
selective and concentrate on markets, which could yield the best results. For this one has
to examine
i. The economic position of the country
ii. Size of the Market and whether it is expanding or shrinking.
iii. Market growth in a given product.
iv. Unit price of the product. Whether it is more or less than other countries.
v. Import regime in the importing country.
vi. Location of the market etc
Export Process Flow, Procedure & Documentation Policy & Planning
QUOTING A PRICE
It is easy to quote price at home. For this one has just to calculate cost of production with
packing and transportation charges and add profit. But in case of export, quoting of price
means many things. For this one has to examine several things including the following: -
i. What price to charge to remain competitive abroad?
ii. While calculating prices one has to think about all the cost including, packing,
insurance, credit, agent’s commission, octroi duties, documentation fee, marking
charges, transportation charges, export duties etc.
iii. For securing good price one has also to check up price of the same product abroad. If
there is a good mark up in price in foreign market, one should not loose sight of it.
EPB can help you get price information further its trade offices posted abroad.
SIGNING OF A CONTRACT
When prices are accepted then a contract is signed with the firm for supply of goods which
becomes binding on both the buyer & seller. Contract is a document, which normally
contains.
i. Name of exporter
ii. Name of importer
iii. Item of sale
iv. Unit price
v. Total quantity
vi. Terms of delivery (FOB, C&F, CIF etc.)* Incoterms deal with the questions related to
the delivery of the products from the seller to the buyer. This includes the carriage
of products, export and import clearance responsibilities, who pays for what, and
who has risk for the condition of the products at different locations within the
transport process. Incoterms are always used with a geographical location and do
not deal with transfer of title.
vii. Terms of payment (There could be basically two arrangements for payment; first
being through direct funds transfer without involving any credit facility. This funds
transfer could be both before the shipment of goods or after the shipment of goods
generally referred as Cash Against Documents (CAD). Second arrangement is
through the Letter of Credit (LC). The customer’s bank provides a ‘letter of credit’,
which promises to pay the supplier as long as the terms are met.
There are two types of LC, LC sight and LC Deferred payment.
The payment may be paid immediately at sight or at a later date).
viii. Mode of shipment (Sea, Air, Road)
ix. Currency in which transaction will be made.
x. Validity period of a contract & delivery period.
xi. Shipping marks if any.
xii. Arbitration clause.
TERMS OF DELIVERY
When the exporter is making an offer, he quotes the price of his product. If the offer is
accepted then a contract is signed between the buyer & the seller. The contract includes
terms and conditions under which goods are delivered.
Export Process Flow, Procedure & Documentation Policy & Planning
The buyer sitting in the overseas market is normally not interested to receive charge of
goods at one's factory site but he may be interested to get charge of goods on FOB basis
which means free on Board at airport or seaport. It means that charges of the consignment
are fully paid up to that point and the rest of the freight is paid by the buyer. Terms of
delivery are not only important for quoting price but it also makes clear as to who is
responsible for the goods if anything goes wrong. The most frequently used terms of
delivery are as under: -
FINANCING FOR EXPORT
The exporter should accept order, which he can fulfil easily. He should have the necessary
finances or access to finances for effecting shipment and the capacity to wait till the sale
proceeds are received. In this connection, term of payment plays an important role, as it
should be timed to keep you solvent at the time of need. For export pre-shipment and
post-shipment credits are available from the Govt. on concessionaire rate. The exporter
can make use of it.
PACKING
Packing should be sea, air and roadworthy. The container should be in a position to carry
contents to the destination in perfect condition. For reduction in cost most economical
packing material be used. Pakistan Packing Institute can help you.
TRANSPORT
Light and costly items are normally sent by air whereas as heavy items are shipped by sea.
In each case the most economical mode should be used to reduce cost.
INSURANCE
Insurance is necessary to recover cost in case of loss. But where the exporters are sure
that the chances of loss are minimum they do not insure consignment. In case the buyer
insists on Insurance then it must be done.
DOCUMENTATION
The following documents are normally used in exports: -
1. E-Form (Through authorised Commercial Bank).
2. Shipping Bill (Through authorised Clearing agents).
3. B/L or AWB (Through Clearing agents)
4. Commercial Invoice
5. Packing List
6. Certificate Country of origin (Through Chamber) or
6(a) GSP (Through EPB)
7. Textile quota Export licence/visa document required for textile items under quota
restraint
8. Pre-shipment certificate through EPB for certain textile item s for exports to
management textile item.
9. Export contract registration details
SIGNING OF A CONTRACT
When prices are accepted then a contract is signed with the firm for supply of goods which
becomes binding on both the buyer & seller. Contract is a document, which normally
contains.
i. Name of exporter
ii. Name of importer
iii. Item of sale
iv. Unit price
v. Total quantity
vi. Terms of delivery (FOB, C&F, CIF etc.)* Incoterms deal with the questions related to
the delivery of the products from the seller to the buyer. This includes the carriage
of products, export and import clearance responsibilities, who pays for what, and
who has risk for the condition of the products at different locations within the
transport process. Incoterms are always used with a geographical location and do
not deal with transfer of title.
vii. Terms of payment (There could be basically two arrangements for payment; first
being through direct funds transfer without involving any credit facility. This funds
transfer could be both before the shipment of goods or after the shipment of goods
generally referred as Cash Against Documents (CAD). Second arrangement is
through the Letter of Credit (LC). The customer’s bank provides a ‘letter of credit’,
which promises to pay the supplier as long as the terms are met. There are two
types of LC, LC sight and LC Deferred payment. The payment may be paid
immediately at sight or at a later date).
viii. Mode of shipment (Sea, Air, Road)
ix. Currency in which transaction will be made.
x. Validity period of a contract & delivery period.
xi. Shipping marks if any.
xii. Arbitration clause.
TERMS OF DELIVERY
When the exporter is making an offer, he quotes the price of his product. If the offer is
accepted then a contract is signed between the buyer & the seller. The contract includes
terms and conditions under which goods are delivered.
Export Process Flow, Procedure & Documentation Policy & Planning
The buyer sitting in the overseas market is normally not interested to receive charge of
goods at one's factory site but he may be interested to get charge of goods on FOB basis
which means free on Board at airport or seaport. It means that charges of the consignment
are fully paid up to that point and the rest of the freight is paid by the buyer. Terms of
delivery are not only important for quoting price but it also makes clear as to who is
responsible for the goods if anything goes wrong. The most frequently used terms of
delivery are as under: -
FINANCING FOR EXPORT
The exporter should accept order, which he can fulfil easily. He should have the necessary
finances or access to finances for effecting shipment and the capacity to wait till the sale
proceeds are received. In this connection, term of payment plays an important role, as it
should be timed to keep you solvent at the time of need. For export pre-shipment and
post-shipment credits are available from the Govt. on concessionaire rate. The exporter
can make use of it.
PACKING
Packing should be sea, air and roadworthy. The container should be in a position to carry
contents to the destination in perfect condition. For reduction in cost most economical
packing material be used. Pakistan Packing Institute can help you.
TRANSPORT
Light and costly items are normally sent by air whereas as heavy items are shipped by sea.
In each case the most economical mode should be used to reduce cost.
INSURANCE
Insurance is necessary to recover cost in case of loss. But where the exporters are sure
that the chances of loss are minimum they do not insure consignment. In case the buyer
insists on Insurance then it must be done.
DOCUMENTATION
The following documents are normally used in exports: -
1. E-Form (Through authorised Commercial Bank).
2. Shipping Bill (Through authorised Clearing agents).
3. B/L or AWB (Through Clearing agents)
4. Commercial Invoice
5. Packing List
6. Certificate Country of origin (Through Chamber) or
6(a) GSP (Through EPB)
7. Textile quota Export licence/visa document required for textile items under quota
restraint
8. Pre-shipment certificate through EPB for certain textile item s for exports to
management textile item.
9. Export contract registration details
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