The Risk Ladder

Although both parties have a mutual interest in each transaction being successful, their respective interests in relation to the payment terms are very different. Good payment terms to the exporter may mean poor payment terms to the importer, or vice versa. This can be clearly seen in the diagram below. Therefore it is important to understand the options before agreeing your sales contract. 

However it can seem more complex or riskier than trading within the UK. One of the most common risks perceived from an exporter's (or seller's) viewpoint is whether they will get paid on time. From an importer's (or buyer's) position their risk is concerned with receiving the goods they ordered on time.


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