Bank wiring, also called wire transfer, is a common way of transferring your liquidity to others nowadays. It is usually used for payments because you can pay from one bank to another without the hassle of going there.
Why should we use bank wiring and how can we start?
Here are several reasons why:
1.Accessibility: There are countless number of banks across the globe and almost all of them offers bank wiring services. You can even pay at some convenience stores. So it doesn’t matter what country you’re in, as long as there are banks, you can transfer your money.
3. Fast: Paying through bank wire only requires a short period of time to complete and can transfer in just minutes. Requires 2 or 3 days usually.
4. Privacy: As this money transfer is exclusively between two bank accounts, the privacy of senders and receivers is of the utmost importance.
SWIFT number codes are provided in order to receive the payments, which add more privacy and security to this form of money transfer.
Usually, before proceeding to the production, a 30% down payment is required. After it is done, an approval of the prototype will be made by the importer. When the production is done, those finished products will be shipped and the remaining 70% should be paid.
Risks linked to depositing the down payment and what can you do about it
Before the first T/T deposit
- No prototype was shown by the manufacturer
Before the production, the manufacturer should be able to show you a prototype of the product that you want. It is clearly a problem if they cannot show it to you within 10 days especially if it is just a simple product.
It is possible that your manufacturer will deliver a product that does not meet your expectation. Bear in mind that there are still differences when in comes to the mass produced products compared to the prototype that is shown to you.
For this risk, sending and asking for an auditor’s review and opinion about the products made in the factory will be a good step. This can confirm if they really made it according to your specifications.
The next step would be to organize quality inspection during and/or after the production, pre-shipment, container loading…
- No contract
You may have finished most of the things that should be done like having a purchase order, approving samples and wiring your deposit. But things can go wrong when there is no contract signed between you and your manufacturer.
An OEM contract from a law firm is very advisable in making contracts between you and the supplier. This enables you to have more leverage when things did not go as planned and it also lessens the risks.
If it is your first time having a deal with a company/manufacturer that you are still not familiar yet, it may happen that they can just go away with the money once you transferred it.
Scams happen when you’re not careful in picking the right partner in your business.
A good way of avoiding this to happen is to have a background check of their company and know their reputation.
Before the 70% remaining by T/T
- Things that are not included in the order are in the boxes
Once the production is done and the products are shipped, you may happen to notice that one of the boxes contains materials that should not be there. This may not happen all the time but this is still a loss for you. An inspection should always be done before shipping.
- Inappropriate or low-quality packaging
Like in the previous risk, a way to avoid this is to have a pre-shipment inspection for checking the loading of the container. Having these kinds of low-quality packaging will put your products at risks when shipping.
- Too many defects in the products
Steps such as in-process inspections may give us the necessary information that we need.
Finding problems and issues at an early stage will save you a lot of time and effort compared to finding it later.
Learning about those risks will help you to anticipate all the problems that can occur before and during the process of production.
Keep in mind that in choosing a manufacturer, it is always better to be safe rather than sorry.
Be sure to know about them first before trusting and when you do, that is just the time that you can do business with them.
Don’t hesitate to share your own experience with us, in the comments below or drop us a message !