Economic analysis for marketing plan to expand a current company to Research Paper

Economic analysis for marketing plan to expand a current company to operate internationally in Israel - Research Paper Example This shows that all other charges that follow such as delivery, commissions and distribution are upon the buyer. The disadvantage of this is that the risks involved transfer so early to the buyer. Arrangement of export and import licenses as well as customs formalities is a tedious process for the buyer (Deardorff, 2006). The disadvantage to the seller is that he loses control over the company to transport his goods. A term closely related to ex-works is free on board (FOB). This one show that the price quoted by a seller or invoiced includes all charges up to where the goods are placed on board on a ship for transportation. It can also be called, freight collect, freight forward or freight. The advantage of this to the seller is that he can easily recover the goods before it is on board especially where the buyer defaults in payment or contract (Madura, 2011). The disadvantage of this term of trade is that the seller has limited or no responsibility of recovering the merchandise aft er the cargo crosses the rail of the ship. The buyer also suffers in case the cargo gets lost when the ship is in transit (Deardorff, 2006). ... Cost and freight (C & F), is a term of sale showing that the price quoted or invoiced by a seller for shipment purposes does not include insurance charges but includes all charges up to the destination port. The advantage to the buyer is that all the legal processes are done for him by the seller. The disadvantage to the seller is that he will be responsible if the cargo gets lost or spoilt during transit (Deardorff, 2006). Cost, Insurance, freight (CIF), is a terms of sale signifying that the price quoted by a seller includes the insurance charges, the cost of the goods and transportation costs up to the named port of destination. From the analysis of the terms of trade above, the most preferred to a buyer is the cost, insurance and freight. On the other hand, the most preferred to a seller is the ex-works. Cash in advance (CIA), is a payment method where an order from a buyer is not processed until full payment is received in advance (Madura, 2011). It is also called cash with orde r. Open accounts is a method of payment where the buyer of goods pays the sum payable only after the receipt of goods or on deferred payment terms. A consignment sale is a trading agreement in which the seller of goods sends them to a reseller or a buyer who is supposed to pay for the goods when they are sold. In this case, the seller remains the owner of the goods until they are sold and paid for in full. If the goods are not paid for within the agreed upon period, the goods are taken back by the seller (Deardorff, 2006). This type of payment is also called sale or return or goods on consignment. A sight draft is a bill of exchange which is payable only when it is presented. If not seen by the required party it will not have matured (Deardorff, 2006). On the other hand, a time