DE Technologies

International E-Commerce Transaction Details

All international transactions follow the same requirements since the exporting and importing governments' regulations mandate them. Additionally, processes that are easily accomplished and enforced by "domestic" commercial laws tend to become major if not impossible barriers for most individuals and businesses. In many instances, processes that become critical within the guise of international transactions are nonexistent in a domestic transaction. The purchase of a loaf of bread in the local grocery store does not require, nor come with, the hard evidence of ownership, government/regulatory compliance, commercial invoices, currency conversions and complicated freight arrangements that are SOP (standard operation procedure) in the real world of global trade logistics and transactions. These process functions or intermediary services have been developed, over time, by a highly sophisticated group of industries and facilitators.

In an effort to provide simplicity to the purchaser a multi-layer of facilitators have, since the days of the caravan, provided everything from transportation to fruit stand distribution for all of the worlds exchangeable goods and commodities. These facilitating services have not however, come about without costs of efficiency commensurate with the effort expended to provide the services. In many cases due to arrangements of exclusivity a premium exists for buyers outside the producers country of origin. Thus exist the profit margins (or distribution penalties) that have built the great trading houses (companies) of historical fable as well as many of today's multinational giants.

E-commerce offers a unique ability to reduce the scope of this layering, down to all but the most basic functions, required to maintain a supply chain distribution. Computer to computer operations will allow a shift in the control of product distribution to move to the appropriate organization - the original producer. Computer systems will provide an equal footing for market exposure and direct end user purchases for all sizes of commercial enterprises. Whether a mom and pop e-retailer or auto industry giant, each will have access to direct sell systems that are affordable and real time automated. The efficiencies combined with the access to new markets offers the potential for economic growth of unparalleled proportions. How many jobs would be created if America's small and mid-size producers could increase their sales - say 40%? What is the increase in workers disposable income that could take place? The potential is mind-boggling.

The below illustration of a typical automobile transaction clearly demonstrates the complexity that a buyer or seller or combination of the two must go through in order to successfully execute the transaction. The build up is for illustration purposes only and may vary depending upon the country of origin and country of importation. This is not a transaction for the faint of heart or the novice.

Step	Item description	Traditional	E-com direct to consumer
1	Price FOB factory	$15,000.00	$15,000.00
2	Loading and Handling	150.00	150.00
3	Destination Insurance	25.00	25.00
4	Destination Freight	450.00
5	Cost FOB Dealer Location	15,625.00
6	Dealer Markup	3,000.00
7	Dealer Preparation	250.00
8	Price FOB Dealer Location	18,875.00
9	Transport and Insurance to Exporters Location	125.00
10	Price FOB Exporters Location	19,000.00
11	Exporter Markup	2,000.00
12	Export Preparation	500.00	500.00
13	Export Packaging, 20" containerized	1,500.00	1,500.00
14	Title Documents preparation, SED etc.	75.00	75.00
15	Freight Forwarder and documentation fees	200.00	35.00
16	Price Ex-works, Exporters Location (EXW)	$23,275.00	$17,285.00
17	Inland Freight to Port of Norfolk, VA	450.00	450.00
18	Insurance on EXW value to transport to pier.	75.00	75.00
19	Price Free Carrier Port of Norfolk, VA (FCA)	23,800.00	17,810.00
20	Gate Charges	25.00	25.00
21	Port Charges	150.00	150.00
22	Warfage	200.00	200.00
23	Stevedoring transport to alongside vessel	75.00	75.00
24	Price - Free Alongside Ship, Norfolk, VA (FAS)	24,250.00	18,260.00
25	Cargo Loading and Securing	100.00	100.00
26	Extra Length charges	N/A
27	Heavy Lift Charges	N/A
28	Price (FOB Vessel)	24,350.00	18,360.00
29	Harbor Maintenance Fee (HMF) 0.125% SED	29.00	22.00
30	Ocean Carriage Charges	750.00	750.00
31	Bunker Surcharges	50.00	50.00
32	War Risk Surcharges	N/A
33	Cost and Freight Rotterdam (C&F)	25,179.00	19,182.00
34	Ocean Transport insurance 110% C&F Value	50.00	50.00
35	Cost, Insurance and Freight Rotterdam (CIF)	25,229.00	19,232.00
36	Port of Rotterdam Charges	75.00	75.00
37	Pier Off Loading Charges	150.00	150.00
38	Stevedoring and Terminal Transport	75.00	75.00
39	Pre-import Clearance Warehousing	100.00	100.00
40	Delivered Duty Unpaid Rotterdam, (DDU)	25,629.00	19,632.00
41	Import duties based of Tariff Classification of Goods, class 8703.21.10 (conventional) = 10.0%	2,562.00	1,919.00
42	Delivered Duty Paid, VAT unpaid, Luxury Tax Unpaid	28,191.00	21,551.00
43	Value Added Tax (VAT) 17.5% of DDU plus Import Duties	4,933.00	3,765.00
44	Luxury Tax, 7% of DDP	1,973.00	1,506.00
45	Delivered Duty Paid Rotterdam (DDP)	35,097.00	26,822.00
46	Inland Freight and Handling to buyers location	600.00	600.00
47	Price FOB buyers location (FOB)	35,697.00	27,422.00
48	BOES™ system data base price in U.S. Dollars	$ 35,697.00	$ 27,422.00
49	System price shown to buyer in Euros + 2% hedge factor	€ 37.074,00	€ 28.480,00

BUYERS TRANSACTION COSTS
A	30 days lost interest in Letter of Credit Account at 10% rate of return per annum. 3570/12	298
A	3 days lost interest in Letter of Credit Account at 10% rate of return per annum 2742/365*3		23
B	Letter Credit Cost at 3.0% 35,697 x 0.03	1071
B	Letter of Credit Cost "Digital" at 0.9% 27,422.00 x 0.009		247

SELLERS INTEREST PENALTY OR LOSS
A	Estimated earned interest loss including profit Based on 10% interest bearing account.3570/12	298
A	Estimated earned interest loss including profit Based on 10% interest bearing account 2742/365*3		23

Total Transactional Costs to All Parties		€ 38.044,00 EUR or $ 37,364.00 USD
Total E-Transactional Costs to All Parties		€ 28.219,00 EUR or $ 27,715.00 USD