David Paez
Explain the types of finance available for international business
Amazon
International Financing
International Financing, also known as International Macroeconomics, basically
deals with finance on a global level. There are various sources for organizations to
raise funds. To raise funds internationally is one of them. With economies and the
operations of the business organizations going global, Indian companies have
access to funds in the global capital market.
International finance helps organizations engage in cross-border transactions with
foreign business partners, such as customers, investors, suppliers and lenders.
Various international sources from where funds may be generated include the
following.
Prepayment by the importer and Letter of credit are two useful and positive
methods available for Amazon
Prepayment by the importer: Cash in Advance/Prepayment happens when a buyer
sends payment in the agreed currency and through agreed method to a seller before
the product has been manufactured or shipped. Upon receipt of payment this seller
then ships the goods and all the shipping and commercial documents required
directly to the buyer. Amazon can use prepayment by employer as it involves that
the exporter will arrange for the buyer. The type of payment must be prior to
manufacturing through the agreed method which can be cash, wire transfer, check or
credit card, and it is worth mentioning that the goods are available to the buyer after
payment has been received. It is important to know that it can be risky for both
parties. The risk for the seller is that the product can be manufactured and never
paid for; and the risks to the buyer can be that the seller doesn’t ship per
order(shipping method, quality, product and quantity) or that the seller does not ship
when requested.
Prepayment by the importer is appropriate on Amazon when there is no established
relationship between the buyer and seller, when the product is a special order and
can only be sold to this specific buyer since it contains the company logo, etc. when
the seller is confident that the importing country will impose regulations deferring or
blocking transfer of payment, or when the seller does not have sufficient liquidity or
access to outside financing to extend deferred payment terms. Prepayment by the
importer is positive for Amazon as it ensures that the exporter is paid for the
products as well as ir provides security for the exporter as they know that they don’t
have to worry about credit control which means that it will have greater liquidity as
cash flows into the business before the product has been sold.
Explain the types of finance available for international business
Amazon
International Financing
International Financing, also known as International Macroeconomics, basically
deals with finance on a global level. There are various sources for organizations to
raise funds. To raise funds internationally is one of them. With economies and the
operations of the business organizations going global, Indian companies have
access to funds in the global capital market.
International finance helps organizations engage in cross-border transactions with
foreign business partners, such as customers, investors, suppliers and lenders.
Various international sources from where funds may be generated include the
following.
Prepayment by the importer and Letter of credit are two useful and positive
methods available for Amazon
Prepayment by the importer: Cash in Advance/Prepayment happens when a buyer
sends payment in the agreed currency and through agreed method to a seller before
the product has been manufactured or shipped. Upon receipt of payment this seller
then ships the goods and all the shipping and commercial documents required
directly to the buyer. Amazon can use prepayment by employer as it involves that
the exporter will arrange for the buyer. The type of payment must be prior to
manufacturing through the agreed method which can be cash, wire transfer, check or
credit card, and it is worth mentioning that the goods are available to the buyer after
payment has been received. It is important to know that it can be risky for both
parties. The risk for the seller is that the product can be manufactured and never
paid for; and the risks to the buyer can be that the seller doesn’t ship per
order(shipping method, quality, product and quantity) or that the seller does not ship
when requested.
Prepayment by the importer is appropriate on Amazon when there is no established
relationship between the buyer and seller, when the product is a special order and
can only be sold to this specific buyer since it contains the company logo, etc. when
the seller is confident that the importing country will impose regulations deferring or
blocking transfer of payment, or when the seller does not have sufficient liquidity or
access to outside financing to extend deferred payment terms. Prepayment by the
importer is positive for Amazon as it ensures that the exporter is paid for the
products as well as ir provides security for the exporter as they know that they don’t
have to worry about credit control which means that it will have greater liquidity as
cash flows into the business before the product has been sold.
