What are the issues and problems involved in financing international sales either for importers or exporters?

These are the issues that'll need to worked out.


1) Product quality consistency. It's important that your agreement and financial terms clearly state your expectation of product quality consistency and any remedies for failure to meet it. Some manufacturers/exporters will show you a high grade product (when you visit) but will ship you progressively lower quality goods if you don't watch them.

2) Local-based staff/independent agent. This is tied to the 1st point above. It's cheaper (than to wait until the goods arrive at your location) to conduct quality check. This can be a local-based (verify he or she is someone ethical, preferably someone you've worked with or has a reliable reference) or an independent
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3) Financing terms. Specific to China and India, you get what you pay for. If you squeeze on their prices too much, you'll increase product defects (my experience). Best if you strike a win-win price that'll get you your cost competitiveness and dis-incentivise the manufacturers from playing games. In addition, try to tie to a currency that is less volatile (it'll enable your finance team to more accurately forecast future budget).

4) Parallel exports and grey markets. Not sure if you're signing exclusive deals. If you are, get an experienced consultant to advise you on the appropriate terms to insert into the agreement. Be specific on what situations will result in penalties to keep all sides honest (well, at least legally enforce-ably so).

5) Freight Insurance. Don't skim on this.

6) Import/Export paperwork. Get someone experienced to advise you on the paperwork and hurdles required to ensure Customs and relevant authorities are happy. Note that some products (medical for example) require additional paperwork.

7) Shipping schedule. Depending on types of goods, you'll make certain decisions on transportation modes to ship the goods. If you're feeding your goods as part of a supply chain, anticipate disruption by planning alternatives to ensure unexpected events (natural disasters, strikes, etc) don't (a) cause "out of stock" situations, and (b) force you to pay more for alternative (ad-hoc) transportation.