Process of implementing textile and garment export processing contracts

When carrying out the contract implementation processexport processingtextile and garment products, we must understand the importance of market research in selecting processing partners to carry out processing contracts and export textile and garment processing products later. Market research can be understood around the following basic elements:

- Economic conditions of the receiving countrymachining.
- Laws and economic policies in the receiving country.
- Payment conditions, banking, credit, exchange rates in that country.
- Air quality, transportation, freight rates,... in the market.
 
Carry out the contract implementation processexport processingtextiles
2.1. Contact trade
Through the process of researching and studying the market, finding a suitable partner to establish a trade relationship, agree on prices, conditions, and set binding requirements to reach a consensus to sign a contract with each other.
 
2.2. Sign the contract
There are many methods of signing export processing contracts, but I would like to shorten the methods according to general standards as follows:
- The unit representing the foreign enterprise or the representative of the unit needing processing signs a contract with the processing unit, usually a workshop, factory or units that have a relationship with the factory.
 
2.3. Detailed contentexport processing contract
Just like other contracts, textile and garment export processing contracts also have separate and general mandatory terms. Please join us to learn about this process in detail through the following terms:
 
a. Purpose of the contract
In this clause, businesses participating in processing export production need to specifically agree on the content and requirements of the products to be processed, the processing items and implementation procedures that need to be followed. These terms are often given by foreign businesses or businesses that need to be processed, thereby providing a price for processing a product value.
 
b. Regulations on finished products
When talking about finished product regulations, we immediately think of packaging and completing a product at the final stage to meet the standards specified in the contract purpose.
 
c. Regulations on raw materials
An effective way to specify raw materials in an export processing contract is to list correctly and accurately the type and name of raw materials, specifications, quality, quantity, and price of raw materials. In cases where the processing party also provides part of the raw materials, it is imperative that the two businesses stipulate the consumption level of raw materials for the finished product process in the most specific and clear way to avoid unnecessary deviations during the goods processing process.
 
d. Regulations on processing prices
To be able to set the processing price, businesses will usually rely on many factors including national currency, currency balance, difficulty and technical requirements of the processed item, as well as the number of finished products that can be processed in a unit of time to be able to calculate the price for the receiving unit.machining.
 
This regulation can be considered the most important because it determines the remuneration of employees, directly affects their lives as well as that of the entire outsourcing company, and is also a determining factor in the price of the product when sold to the world consumer market.
 
e. Regulations on acceptance
This regulation needs to be agreed upon by both parties regarding the process of receiving finished products in accordance with the requirements that the two parties have signed from the original source.
 
f. Payment regulations
This regulation has the clearest meaning: payment method, location, time of payment, and currency used for payment. Many different payment methods can be applied such as:
- letter of credit
- money transfer method, etc
 
g. Delivery regulations:
In this regulation, businesses directly involved in the production process must make a clear commitment to the specific time and place for handover.processing raw materialsand finished product after processing on time. Usually in Vietnam, FOB shipping method is quite widely used in this type. There are also individual requirements below.
 
h. Regulations on goods inspection
i. Shipping regulations
l. Insurance regulations
 
Those are the terms in the process of implementing textile and garment export processing contracts at Vietnamese enterprises today. There are still many details that need to go deeper, but in this article, I cannot list them all. We invite you to read other installments also related to this processing field to equip an overall vision to support the working process at the enterprise. If you have any questions, please contact hotline:01638 72 7742for a completely free consultation. Minh reiterates that it is completely free because a community always shares experiences with each other.
Dương Minh Logistics – August 8, 2018

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