As you can see in the chart below on this example order the customer actually saves nearly US$500,000 on the first months costs and then saves that much every month for a year giving a US$6,000,000+ savings on the contract.
We can offer you this because the TT payment advance is used to remove risks in the order and allows the mill to quote much cheaper prices.
Statistically, an LOC order will fail 48% of the time and at that point the mill has already paid a large amount of money to produce, bag, transport, register contracts with the government and other expenses.
An order with a small % TT on the first shipment only, will reassure the mill and allow them to proceed on the order and lower costs since they don’t have to factor in the costs of failed LOC’s.
While often overlooked and even more often misunderstood, TT advances offer great benefits for the buy and allow sellers and mills to reduce costs and risks in contracts.
1) A TT% Payment has a rate of return on a 12 month contract (average) of 1200% of the amount of the payment.
2) You will get faster shipping and lower prices because the mill’s transaction risks are greatly reduced.
3) This is a fantastic tool to reduce your contract costs. No amount of negotiation can compare to this instantaneous savings.