Fastener Export Enterprises: Beware of Big Buyer Trading Risks

For exporters, the ability to stabilize large buyers and their transactions is an important way to expand their export scale. At the same time, companies generally believe that cooperation with large buyers with a long history of trading will not result in foreign exchange risk due to credit problems. . However, the current international situation is complex, and the impact of the financial crisis has not completely subsided. Coupled with the operational risks of the company itself, large buyers are not "safe deposits." The risks of trading with them also need to attract the attention of export companies.

First, the case introduced Haiyan Fasteners industry, a number of suppliers and the United States buyers A company has many years of trading history, has been in accordance with the billing settlement method of trading. The buyer is a larger buyer in the US fastener industry and has direct or indirect procurement relationships with many fastener companies in Haiyan. At the end of 2010, Company A owed more than one supplier to the futures fund, and the rhetoric was almost identical, saying that due to the replacement of the bank, the bank was not optimistic about the amount of its current stock mortgage, resulting in the credit line not being implemented and the funds being temporarily out of circulation. After several rounds of accusations, Company A still has not paid for it, and several companies involved in exporting have reported losses to China Export Credit Insurance Corporation (hereinafter referred to as “China Credit Insurance”), involving more than US$2 million. Afterwards, with the attention and coordination of Zhejiang Fastener Industry Association, all suppliers communicated fully with China Xinbao, enabling the case to be processed as soon as possible. At present, all insured companies have received claims from China Credit Insurance, which has saved a lot of losses.

Case Inspiration (1) We must not relax our vigilance against old buyers. Most companies tend to adopt more cautious attitudes towards new buyers and adopt the goal of not locking up or controlling the frequency of shipping to achieve risk locking. However, for the old buyers, given their good trading history and familiarity, they will gradually relax their vigilance against the credit risk of the old buyers. But I do not know, the so-called old buyers are also in accordance with the form of business operations, and the company's operations must have operational risks and maximize their own profits for the pursuit of goals, "there is no permanent business friends on the field," it is for the old The best interpretation of the buyer's risk.

(II) Controlling the credit limit of individual buyers - Due to the severe competition in product homogenization, exporters will provide buyers with more flexible settlement methods in order to receive more orders, especially for certain transactions. The historical buyer, A company in this article is a very good example, almost all exporters and the buyer's transactions are based on the settlement method of credit. It is understandable for companies to adopt a billing settlement method, but for a single buyer to quantify the amount of credit they make, instead of ignoring the buyer’s operating scale and financial status, the company has no basis for crediting. Therefore, export companies should rely on professional organizations such as China Credit Insurance to objectively assess the creditworthiness of buyers and quantify the credit limit so as to maximize risk control and transfer.

(3) It is good at discovering risk signals from buyers. In this case, the buyer explained to the supplier that the reason for the default payment was to replace the bank and the funds were not in circulation at the moment. In fact, this is a risk signal that buyers may have problems in their operations. Companies generally will not easily give up the main docking banks, and will take into account the impact of replacing the bank's capital chain. A company's replacement of the bank without any warning may reflect, to a certain extent, that the original bank may have some doubts about the operation of the company, resulting in the breakdown of cooperation between the two sides in the financing of the company. When exporters receive similar risk signals from companies, they must pay special attention to the pace of follow-on delivery.

(IV) Adopting China Credit Insurance Corporation to diversify operational risks and improve crisis management capabilities. As the only policy insurance company in China, China Credit Insurance Corporation's export credit insurance, export credit, and export tax rebate are listed as supporting troikas. one. In 2010, the penetration rate of enterprises in the Haiyan region has reached 19%, which means that for every $100 of goods exported to Haiyan, 19 of them received the support of China Credit Insurance Corporation. Through the credit investigation function of China Credit Insurance, it can better understand its counterparties and further protect the risk of foreign exchange collection through the risk transfer function of China Credit Insurance, increase the settlement of the risk of the company’s accounts receivable, and improve the crisis management capabilities.

(5) Join industry associations and make full use of industry information. In this case, Zhejiang Fastener Industry Association gave full play to its organizational coordination. In the process of handling the case, it has been actively liaising with China Credit Insurance, so that the communication between the company and China Credit Insurance has been more smooth and the information transmission has been more in place. At the same time, the industry associations also provide a good early warning of the timely tracking and reminding of trade risks of relevant companies in the industry and the loss of buyers.