Security measures when paying a new supplier

[SheepskinChic]

Hello

I have started a new retail business and am at the point of placing my first order with the manufacturer (they are based in Australia)

They have offered the payment terms of either 70% upfront and the remainder in 1 month, or full payment up front for an additional 10% discount.

I am tempted with paying up front to gain this discount, but I am unsure the best way to protect myself in case they do not ship.

I am in the process of getting a contract drawn up, I have done some online research about the company and cannot find anything to suggest they are dodgy, they actually seem quite successful in Australia.

I was considering paying by credit card, but this will incur a large fee and I am also stuck with their exchange rate - so will be expensive.

My husband uses a currency trading company to pay his euro suppliers (for his own business) and has offered to pay my supplier for me so that I get a much better exchange rate - he has also suggested looking into using an excrow account to give the security I need - but this trading company do not offer this service.

Please can anyone offer any advice on escrow accounts, or alternatively any suggestions on what steps I can take to protect myself in this situation?

This first order I am talking about £5k, but this will develop into regular £5k - £10k orders in the future, so getting the best exchange rate is important as will make a big difference over time!

Many thanks in advance

 

[Paul_Rosser]

You can use a 3rd party Escrow provider but they will charge you a fee

For example -
https://www.escrow.com/index.asp

Basically you pay the money to them and once the goods have been delivered then they release the money to the seller.

For the first order may be worth paying their fee just to ensure everything arrives ok.

Based on the website above it will cost around £100, but thats just an example so you may want to shop around to get a better deal. Or ask your bank if they provide this service.

 

[MRam]

I suggest you shop around for currency transfer quotes and make sure that you are getting the best rate from an FSA authorised foreign exchange provider. Typically, a foreign exchange broker's rate can be up to 4% better than the banks. This doesn't sound a lot but when you're transferring thousands or hundreds of thousands, it really does make a huge difference! Many of them are protected and secure and offer a personal and tailored service.
All the best