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terms of payment for domestic trade (the seller and buyer have to agree…
terms of payment
for domestic trade
the seller and buyer have to agree on:
how to pay
how muсh to pay
early payment discount
cash discount
bulk discount
when to pay
CWO (Cash with order)
advantages for seller
he can work with the money
no risk оf nоt gеtting
рауment fог thе gооds
disadvantage for buyer
if the selleг is unгeliablе,
he might рay for the gоods
and not get them
H.P. (Hire Purchase)
disadvantage for seller
the buyer may not be able
to keep up the payment,
and if he returns the goods, seller
can no longer resell them as new
advantage for buyer
he doesn't have to save up
a large amount of money
before he can buy
an expensive product
Leasing
lease is
an agreement
between
the owner of object - the lessor
disadvantage
the leaseholder may not be able
to keep up his payments
advantage
to earn a regular income
from property over a long period
the person who wants to use it -
the leaseholder or lessee
advantage
can make use buildings
and equipment which he otherwise
might not be able to afford
COD (cash on delivery)
advantage for seller
even if the buyer refuses
to accept delivery and pay,
seller don't lose the goods
disadvantage for buyer
he doesn't have the chance
to inspect the goods
before paying for them.
Open-account terms
disadvantage for seller
run the risk of the buyer mot
being able to keep up the payments
advantage for buyer
can only profit from this term
of payment if he
place regular order
Payment on invoice
disadvantage for seller
use this term of payment
if he know the buyer is reliable,
otherwise seller run
the risk of not being paid
advantage for buyer
he can inspect the goods
before paying for them
as well as having time to pay