This guest blog article is by Eric Salinas
Exporting heavy equipment can be a lucrative income stream for your business. But if you don’t become educated about the risks involved, you can easily fall prey to payment scams, potentially losing tens of thousands of dollars in equipment.
This article will give you access to important information about a range of payment options, as well as information about the ways that sellers in America typically get scammed. You’ll know exactly what to look for, as well as what to avoid.
Which Payment Options Are Available?
When it comes to paying for the exportation of heavy equipment, there are so many options at hand. To help you sort out what’s best for you, let’s look at a couple of popular ways to cover the cost of this type of transaction.
Cash-in advances allow sellers to decrease their credit risks, as payments are received before transfers of ownership of heavy equipment are completed. You may arrange this form of payment via wire transfer, credit card or check payment. Bear in mind that paying in advance isn’t necessarily an appealing option for buyers, since it affects overall liquidity. In addition, with advance payments, there is always the risk to buyers that goods won’t be delivered after payments are made.
Letter of Credit
Instead, you may opt to utilize a letter of credit when exporting heavy equipment. This type of financial transaction is a commitment by a financial institution on behalf of a buyer. It stipulates that payment to an exporter will be finalized as long as certain rules and regulations are carried out. A buyer will give the bank a fee in exchange for arrangement of this type of service. A letter of credit will offer a little more protection to a buyer, as the buyer won’t need to make a cash outlay until heavy equipment is safely delivered, according to the stipulations of a legally-binding contract.
When considering a letter of credit, think about potential concerns and pitfalls before you move forward. For example, mull over whether or not your letter of credit represents a hard and fast commitment. In other words, it should have no shady terms that allow the other party to evade his or her responsibilities. These sorts of loopholes may cause a lot of headaches, so it’s best to look for and be aware of them, right from the very start. When you’re talking about shipping expensive heavy equipment overseas, you need real commitment from the other party, rather than “weasel” terms and conditions.
How Scammers Usually Operate
When preparing to export heavy equipment, you need to be wary. Why? Well, the truth is that many people have been scammed while trying to access reputable services. Scammers typically operate from countries like Nigeria. They focus on setting up illegitimate trade deals with too-trusting clients in America.
While it is possible to access aboveboard services via companies from Nigeria (which offer services to the USA and to other nations), it’s risky to affiliate yourself with such firms, as the chances of being ripped off are high.
Scams may be handled by organized crime cartels overseas. Members of these cartels pose as government bigwigs or bankers. They usually send out correspondence that is carefully designed to lure unsuspecting victims, telling them they are needed to process deposits of overpayments on procurement contracts.
In order to stay safe, you need to learn to recognize scams based on a host of criteria. For example, if you’re asked to send cash, bank notes, financial information or personal details, be aware that you’re likely being taken for a ride. In addition, if correspondence outlines the need for secrecy during a deal, you should back out immediately. Representatives of reputable companies never demand these sorts of shady conditions and terms from their customers.
If you do get scammed, you may have recourse. For example, if you’ve been hit with wire fraud, which is yet another way to get ripped off via exportation services, it may be possible to “pull” the wire back out of your account. If check fraud is the problem, consider how long you may hold the check, as well as whether or not it may be retroactively cancelled. In some cases, it may be possible to stop a scam in its tracks via these practical methods.
Some Buyers Access Expert Assistance
As you can see, there are many things to think about when it comes to arranging a legal, safe and scam-free transaction. For some prospective buyers, the risks and challenges associated with getting heavy equipment exportation up and running are daunting. These smart and savvy buyers prefer to minimize or eliminate risk by utilizing export company services, which allow them to access specialized skills and expertise. A top-tier company of this type will handle most details for a client in order to ensure that a transaction is smooth, seamless and pleasant.
Photo via Flickr CC, courtesy of JAXPORT, epSos.de, Flazingo Photos and JAXPORT.