Tokyo

Unique purchasing systems and payment methods in Japan

The Japanese industry has developed unique purchasing systems and payment methods. In order to enter into the Japanese market, one should understand these systems.

There are two types of purchasing systems for retailers; one is kaitori or complete purchasing and the other is itaku or commissioned sales.

Purchasing systems

kaitori: When a retailer place an order by this system, they have to pay the total amount of money even if they fail to sell all products they buy.

returns: Without any obligation, a retailer is able to return merchandise which they could not sell to vendors.

itaku: When a retailer place an order by this method, they do not need to pay money for the merchandise which they have not sold so far. They have to pay for only sold-merchandise. This means that retailers do not need to take any risk. However, strong retailers usually use this method.

Payment method

There are two types of payment methods in Japan; namely in cash or by tegata or notes. The payment sight of notes usually vary from 90 days to 180 days.

Cash at the end of next month of delivery: If the delivery is made on May 15, the payment will be made in cash at the end of June.

Notes at the end of next month of delivery: If the delivery is made on May 15, the payment will be made by a note at the end of June.

If the payment method by notes is combined with the purchasing method of itaku or commissioned sales, the payment schedule from retailers would be too long. However, new comers would usually accept these conditions because of fierce competition.

Key money for renting an office

When you rent an office in Japan, you have to pay key money which is two times the rent. If the location is a very good one, the key money would be 20 times of the rent.

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Contact: mike@uniconpro.co.jp for comments and questions