Well, we've settled the question of price, quality and quantity. Now what about the terms of payment?
We only accept payment by irrevocable letter of credit payable against shipping documents.
I see. Could you make an exception and accept D / A or D / P?
I'm afraid not. We insist on a letter of credit.
To tell you the truth, a letter of credit would increase the cost of my import. When I open a letter of credit with a bank, I have to pay a deposit. That'll tie up my money and increase my cost.
Consult your bank and see if they will reduce the required deposit to a minimum.
Still, there will be bank charges in connection with the credit. It would help me greatly if you would accept D / A or D / P. You can draw on me just as if there were a letter of credit. It makes no great difference to you, but it does to me.
Well, Mrs. Wang, you must be aware that an irrevocable letter of cred it gives the exporter the additional protection of the bank er's guarantee. We always require L / C for our exports. And the other way round, we pay by L / C for our imports.
To meet you half way, what do you say if 50 % by L / C and the balance by D / P?
I'm very sorry, Mrs. Wang. But I'm afraid I can't promise you even that. As I've said, we require payment by L / C.