business· contract.ppt

Illustration Supposing… Your offer: USD3000 per metric ton CIF Singapore Counter-offer: USD2880 per metric ton FOB Shenzhen port Freight from Shenzhen port to Singapore: USD89 Insurance premium rate: 0.95%, markup: 10% Question: will you accept the counter offer? Reference your offer is CIF Singapore 3000USD the counter offer in FOB Shenzhen can be calculated as follows: FOB=CIF-F-I = CIF-F-CIFx(1+markup)x Insurance Rate = 3000-89-3000x(1+10%)x0.95% =2879.65 Since the counter-offer is 2800, which is even higher than the original price, thus the counter-offer price is accetptable. pricing considerations calculation of price price including commission price with discount price adjustment clause understanding the price communication of price 3.1 Export Price 3.1.3 Price including commission Net price = basic costs + profit Adjustment to the net price for promotion purposes (commission and discount) 如净价成交，可在价格条款中明确表明“净价”字样。 例：US$300 per metric ton FOB Shanghai net 3.1.3 Price including commission Commission An incentive payment made to the middlepersons for their intermediary services Expressed in a fixed figure or in a percentage Examples CFR London GBP100 per doz, including 2% commission USD200 per M/T CIFC2% London CIFC3 Hamburg USD100/set CAD150 per M/T FOB Toronto, including CAD8 per M/T commission 3.1.3 Price including commission Two ways of calculating commission based on invoice/contract value C = contract value x C rate based on FOB or FCA: Under such terms as CFR, CIF, C is calculated after F and I are deducted Formula: C = price including C (FOB/FCA) x C rate Net price = price including C (FOB/FCA) – C = price including C x (1- C rate) Price including C (FOB/FCA) = net price / (1-C rate) Illustration 1. USD100 per m/t CFRC5%, C? 2. USD100 per m/t CFRC5%, CFR net? 3. USD 100 per m/t Net CFR, CFRC5%? 4. USD200 per case FOB Xiamen, freight USD22 per case, CFRC5? 5. USD50 per m/t CIF Washington, I rate 1.05%, markup 10%, CF