What's new
What's new

Accounts for international clients Canada to USA. Insights?

Stirling

Hot Rolled
Joined
Dec 11, 2013
Location
Alberta canada
I sell a line of spare parts for industry.
Lately the US market has picked up.
I do credit card or wire transfer for sales.
But there is a large client that that wants to set up a credit account.

Anything here I need to know?
Non payment recourse, taxes?(I assume the broker will charge them all applicable taxes) income taxes?


I do this for Canadian company’s all the time. Net 60 bla bla.
 
But there is a large client that that wants to set up a credit account.
If you can possibly avoid it, do so. I assume you are fairly small and don't want to be a bank ? One that gives interest-free loans with reverse collateral ?

Because unless this place is the one in one hundred exception, they will screw you. Using "complexities of international trade" as an excuse would be my go-to reason to not get into that trap.
 
If you can possibly avoid it, do so. I assume you are fairly small and don't want to be a bank ? One that gives interest-free loans with reverse collateral ?

Because unless this place is the one in one hundred exception, they will screw you. Using "complexities of international trade" as an excuse would be my go-to reason to not get into that trap.
I don't understand the ins and outs of international business.

But, are you suggesting that only one in a hundred customers can be trusted not to screw you if given the opportunity?
 
I don't understand the ins and outs of international business.

That was just the excuse I suggested using. Other than currency exchange and currency controls, if you have those, it's not a big deal ... however, be aware that in any dispute the dollar amount has to exceed $75,000 to even go to court in the US (generally speaking have to go to federal court and that's the minimum they consider to be a problem.)

So they can screw you out of $74,500, say, and there's not a damn thing you can do. That could be considered a risk, by some people.

But, are you suggesting that only one in a hundred customers can be trusted not to screw you if given the opportunity?

I admit to a sight exaggeration but pretty much, yes. It might be as high as five in a hundred who would resist the temptation.
 
You can insure international sales with export Canada. A former employer got stiffed on a $70,000 project going to the Czech Republic. I think it was 90% he got back.
I’m gonna a look into this.
Is that a federal thing or a private company providing insurance?
Edc dot ca looks like what your referring to. I assume that’s a private buissness bank if some kind?
 
My export rule is simple. When I see the wire transfer come through we ship. We sort of ship for the most part. Overseas companies (Canada too) often have their own carriers and customs brokers they want to use. They sort it out and pay the shipping. We fill out some forms and load. AFTER the wire transfer is deposited. Once in a while their carriers will want to pickup right away. My reply is that I am "waiting on a reply from the customer".
 
My export rule is simple. When I see the wire transfer come through we ship.
Generally for bigger stuff people want to do a letter of credit. Which works fine, but Stirling here is talking ongoing operations and extending credit.

I still say, if you're not a bank and can avoid credit, you're way better off not to do it. That's not our business and we're not good at it.
 
Look up EDC Canada. Its a Government agency or crown corporation forget which. The insurance is not free and is not for 100% but does cover you for an export risk.

I wouldn't bother and not sure about availability if we're talking about a few hundred dollars. In that case accepting credit cards might be your best option .

I have found my best option for selling a product line into the US for me is a distributor. I am talking about a distributor who stocks my products not one of these distributors who add little value and you're still shipping your items one or 2 at a time. My distributor makes orders 2-4 times a year and saves me hundreds of shipments per year. They take a big cut but save me days/weeks of packing filling out shipping documents, customs paperwork etc. Now days maybe a fulfillment center would be a better option however.
 
Look up EDC Canada. Its a Government agency or crown corporation forget which. The insurance is not free and is not for 100% but does cover you for an export risk.

I wouldn't bother and not sure about availability if we're talking about a few hundred dollars. In that case accepting credit cards might be your best option .

I have found my best option for selling a product line into the US for me is a distributor. I am talking about a distributor who stocks my products not one of these distributors who add little value and you're still shipping your items one or 2 at a time. My distributor makes orders 2-4 times a year and saves me hundreds of shipments per year. They take a big cut but save me days/weeks of packing filling out shipping documents, customs paperwork etc. Now days maybe a fulfillment center would be a better option however.

I will certianly look into edc. Going to call them this morning. Sounds like they may have lots of advice on the topic.

I’ve contemplated a distributor or a fulfilment Center for this.
Fulfilment centers would be far cheaper. But a distributor comes with a sales team… both add volume in their own ways. I’ll have to see how the sales evolve for those decisions.

As for now it’s credit card based off of web sales for the smaller buyers ($100-10,000)
It’s just this one larger company in particular that’s now inquiring. $5000-20,000 orders typically *as they have said. Purchasing manager would use credit card but corporate frowns on it, so in Looking at the ins/outs/how’s/how nots.
It’s good knowledge to learn either way.

Personally I prefer a simple web sale with credit card.
Package and ship. Done.
But not all company’s roll that way

As for machine shops (or any company) being a bank…. I have strong feelings about that. But that’s the game sometimes.
I wonder if their is a EDC type insurance for my domestic canadian customers too? I hate delinquent payers.
Agreed net 30 terms. 45 days later “oh we pay everyone net 90”…. Well why the F did you sign my credit agreement at net 30 and not request 90? Why should my terms be flexible but Ford finance would have already repossessed your truck?. Anywhoooooo
 








 
Back
Top