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INCOTERMS EXW(Ex-Works). Explained Advantage and Disadvantage of Exporter & Importer's point of view - YouTube
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this time
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let's look at x works we will go through
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the advantages and disadvantages from a
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seller and a buyer's perspective
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you can minimize both sellers and buyers
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trading troubles
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by understanding encoders correctly so
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it's important for you to understand
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let's take a look
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x works as a one of encoders which
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explains terms and conditions on trading
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there are 11 different types of trading
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terms
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x works is the smallest risk term with a
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smaller logistic
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responsibility for a seller we will
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attach a website link for our previous
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video
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which explains the characteristic of
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encoders
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let's take a look at the cost and
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responsibility of a cargo index works
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with x works trading terms it is the
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responsibility of an importer
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the buyer to take cost and risk
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responsibilities of transportation
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from the exporting factory to the
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imported delivery location
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once the seller has delivered the cargo
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to the transportation truck at their
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factory or a warehouse
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the cost and risk responsibilities will
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be moved to the buyer
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this means the buyer is responsible for
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cost and responsibility for the
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following
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transportation within the exporting
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country export customs clearance
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vessel and air transportation customs
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clearance in the importing country
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and the transportation to the final
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destination however
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the seller is required to provide
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support when obtaining export
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certificates from related ministries
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and to provide information for an
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importer with regards to import customs
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clearance
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what is x works from an exporter's point
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of view
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for an exporter who has completed the
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order within the deadline and then
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handed the cargo to a buyer at their
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factory
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the buyer importer will deal with all
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other processes
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the largest feature here is that the
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seller can focus on production and
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purchase of stock
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therefore x works offers more suitable
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terms when starting a new export
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business destined to overseas
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and when exporting to a new trading
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country
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x works may be a better option for
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inexperienced business owners
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as there is increased risk and unknown
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factors when shipping to countries you
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are unfamiliar with
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now let's take a look at the
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disadvantage of x works
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the importer is required to make all
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transportation arrangements once the
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cargo is handed over at exporters
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premises
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when importing using x works terms
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therefore
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the buyer should be familiar with the x
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works trading terms
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importers using x works are most likely
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very experienced traders
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importers using x works offer less
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opportunity for exporters to negotiate
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reduced cost and
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increased benefits if an inexperienced
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exporter using x works
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it may be difficult for them to achieve
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larger profit by using both domestic and
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international logistics
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alternatively what is x works terms from
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an importer's point of view
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an importer will be required to make
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arrangements for transportation in the
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exporting country
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therefore x works terms will require for
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them to know the local practices
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and have knowledge and experience of
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transportation in the exporting country
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an importer can control their transport
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arrangements and choose a transportation
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company and insurance
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therefore for a buyer can minimize the
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importing cost when using x works terms
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also an importer can make transportation
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arrangements and take risk
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responsibilities
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which may enable them to negotiate
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reduced cost to a buyer
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on the other hand the disadvantage of x
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works is that they need to take more
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risk responsibility of transportation
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they will need to take responsibility
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for all risk from an exporter's premises
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to the designated domestic destination
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also they need to check out the freight
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forwarder they use is experience
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and able to make arrangements for
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transportation and customs clearance in
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exporting country
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if the freight forwarder is unable to
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make these arrangements
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they need to find other freight
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forwarder or avoid using x works
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let's summarize the advantages and
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disadvantages of using x works terms
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from an exporter's point of view
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advantages are
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exporters can focus on production and
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purchase of stock
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risks responsibilities are at minimum
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trading process is not needed
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an importer will arrange logistics
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therefore the exporter can focus on the
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deadline and production
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disadvantages are exporters are unable
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to choose their own transportation
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exporters may not be able to negotiate
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cost
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a buyer who would choose x works is more
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likely experience
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therefore it may be difficult to
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negotiate cost with them
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let's summarize the advantages and
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disadvantages of using x works from an
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importer's point of view
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advantages importers can minimize the
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cost of importing
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importers can control logistics
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importers can make all logistic
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arrangements
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enabling them to avoid sellers adding
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margin on transportation cost
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disadvantages are importers need to take
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all risk responsibilities
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importers may not choose to use ex works
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if their freight forwarder is
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inexperienced
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as importers will need to take all of
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the responsibility for the cargo in
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logistics
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they will need to take an increased
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control of risks
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if they are an experience these terms
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may be difficult to use
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this time we look at x works terms
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you can understand more if you can look
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at x works from both an
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exporter and an importer's point of view
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and compare with the status of your
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company
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x works as a term with minimum
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responsibility for exporters
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if you are considering exporting
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overseas it may be a good idea to speak
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to your business partner of the
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exporting company with regards to using
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x works terms
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alternatively if you would like to
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minimize the cost of importing
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you could discuss using x works terms
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with a freight forwarder
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in this channel i explain about the
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technical term and job description
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in logistics if you are interested in
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logistics work
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or if you already work in the logistics
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industry i believe that this channel
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will be a good support for your job
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if this time video get the good support
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for your understanding
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please subscribe press good or comment
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anything
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well see you next time
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