- A minimum guarantee works when the buyer pays a certain minimum.
- This may only cover the cost of carriage, freight and insurance.
- It should only be used with well established customers with excellent credit ratings.
- A minimum guarantee works well when the price of the product fluctuates due to market demand.
- The seller has the right to inspect the buyer's records to verify all sales.
- The advantange of a minimum guarantee is that the exporter has a firm order to sell.
- The price may be very low, but at least there is a minimum guarantee.
- The minimum guarantee may be assured through a letter of credit.
© 2004 John Michael Pierobon