Planning to start an entrepôt trade business in Thailand and seeking guidance from initial preparation to operational procedures, including tips and pitfalls to avoid, due to lack of experience. The best answer suggests conducting market research, understanding trade policies, establishing reliable supply chains and logistics partnerships, handling documentation and compliance, and focusing on building reputation.
How to distinguish entrepôt trade? Teach me quickly!
Resolved
I've been researching trade-related knowledge recently and don't quite understand entrepôt trade. I'd like to know how to distinguish entrepôt trade. What's the difference between it and general trade? In practical business scenarios, from which aspects can I judge whether it is entrepôt trade? I hope everyone can explain it to me, the more detailed the better. Thank you!
Trade Expert Insights Answers
To distinguish entrepôt trade, you can start from the following aspects. Firstly, look at the cargo transportation route. Entrepôt trade cargo is usually not shipped directly from the country of production to the country of consumption, but passes through a third country. For example, products manufactured in China are first shipped to Singapore, and then transshipped from Singapore to the United States.
Secondly, from the perspective of trade relationships, entrepôt trade involves three parties: the exporter in the country of production, the entrepôt trader in the third country, and the importer in the country of consumption. General trade often only involves the buyer and seller.
Furthermore, in terms of trade purpose, the entrepôt trader mainly aims to obtain profit from re-export and does not need to make substantial changes to the goods, such as processing. General trade is based on normal commodity buying and selling demands.
Finally, in terms of document handling, entrepôt trade will involve more re-export-related documents, such as entrepôt bills of lading. Through these differences, entrepôt trade can be better distinguished.
See if a third-party trader is involved. If so, and the cargo transportation route passes through a third country, it is likely entrepôt trade. General trade is basically direct transactions between two countries.
Pay attention to the transfer of ownership of the goods. In entrepôt trade, the ownership of the goods is first transferred to the entrepôt trader in the third country and then to the final importer. General trade is usually direct from the exporter to the importer.
You can look at the trade contract. Entrepôt trade involves at least two contracts: one between the exporter and the entrepôt trader, and one between the entrepôt trader and the importer. General trade has only one contract between the buyer and the seller.
Pay attention to the flow of funds. In entrepôt trade, funds flow through the entrepôt trader's account. In general trade, funds are basically directly exchanged between the buyer and the seller.
From the perspective of cargo warehousing, entrepôt trade cargo may be temporarily stored in a third country before transshipment, which is less common in general trade.
Look at the customs declaration documents. Entrepôt trade customs declaration documents will reflect information such as the goods transiting through a third country, which differs from general trade customs declaration documents.
If entrepôt trade financing is involved, it is highly likely to be entrepôt trade, as general trade rarely involves such special financing methods.
Looking at trade documents, entrepôt trade will have special documents for entrepôt trade, such as re-export certificates, which general trade does not have.
Consider the assumption of trade risk. In entrepôt trade, the entrepôt trader bears more risks during transportation. In general trade, risks are mainly shared by the buyer and seller as agreed.