International Trade Quotations and Conversion Formulas among Three Terms
1. International Trade Quotations
1) Commission: Monetary rewards paid to a middleman for his introduction of business opportunities or his role as an agent.
US$100 per M/T CIF New York includes 3% commission, or US$100 per M/T CIF C3% New York.
2) Payment of Commission
Commission is often paid to a middleman after the exporter has received the payment of goods.
3) Discount. Discount means the seller offers the buyer a certain percentage of price reduction as a favor. US$150 per M/T CIF London enjoys a 3% discount, or US$150 per M/T CIF D3% London.
2. Conversion Formulas among FOB\CIF\CFR
1) FOB into CFR or CIF
CFR=FOB+F (Freight);
CIF=(FOB+F (Freight))/[1- Insurance rate*(1+Insurance markup rate)]
2) CIF into FOB or CFR
FOB=CIF- I (Insurance) - F (Freight)
CFR=CIF- I (Insurance)
3) CFR into FOB or FIB
FOB=CFR- F
CIF=CFR/[1- Insurance rate*(1+ Insurance markup rate)]
