One of the important points when concluding trade transactions is transportation, delivery of goods to the buyer from the manufacturer and seller. These actions can be carried out by transport of the buyer, seller or other organization. It does not matter how this process is carried out, the costs are borne by the party specified in the contract of sale. Ex-warehouse is a way of price formation for purchased goods.
What is franking
Any transportation costs are additional for the organization that pays them. That is why these costs are usually taken into account by sellers when setting selling prices. The rules developed by international practice affect the level of cost of goods depending on the basic
conditions of delivery. That is, if the term “ex-warehouse” is indicated in the contract, this means that a certain amount has been added to the initial price for delivery to the specified place and insurance of the sold valuables.
What is included in the pricing conditions for a major trade transaction
These conditions include generally accepted concepts:
- destination station;
- destination of cargo;
- station or place from which the goods are shipped;
- manufacturer's ex-warehouse;
- type of transport by which the goods are delivered;
- other trading activities and terminology.
Ex-warehouse is the agreed conditions under which the seller undertakes to deliver and pay with his own means the goods sold to the point or place indicated in the text of the contract. Delivery costs until the receipt of the goods by the buyer are paid by the supplier.
What is the difference between ex-warehouse and ex-enterprise
Franking must be indicated on the invoice for the goods. In cases where the buyer picks up the purchased product "pickup", the seller must reimburse the amount spent on transportation costs, if this money is included in the selling price.
- “Buyer's ex-warehouse” pricing is the price of a product when the seller or manufacturer pays all the consumables for the transportation of products to the buyer.
- In commercial terminology, the term “free mooring” is the process when all rights to the goods, responsibility for their preservation and movement are transferred to the buyer after the goods are delivered to a specific mooring.
- The term "ex-enterprise" indicates that the seller is not responsible for the delivery of goods, as well as the "ex-warehouse of the supplier." What does this give to both sides? All details are indicated in the contract, under which both the seller and the buyer receive benefits and remain in profit.
In some cases, the use of terminology does not have official rules, but only trading customs. This applies to ex-wagon. According to this condition, the seller’s responsibilities include:
- order the appropriate railway transport on time, paying for it with your own funds;
- load the goods;
- inform the buyer of the delivery time;
- provide prepared transport documentation.
It is the buyer's responsibility to pay the freight and freight forwarder.
What is the use of franking
The conditions for establishing basic prices for goods have been developed by world trade experience and practice. Thanks to franking, import and export operations have become easier. Internal pricing methods in retail and wholesale trade zones are also based on the same rules.
The list of such pricing includes many types of transportation costs, points of delivery and storage of goods are named. We are talking about ex-embankment, ex-marina, ex-truck and other terms.
Thanks to the generally accepted pricing system called “franking”, “free”, the processes of delivery and responsibility of the parties for goods bought and sold have been simplified. Systematic actions have proven useful to all participants in trading operations. Ex-warehouse is a trade agreement on the process and payment for the delivery of purchased and sold goods.