Author: Saman Memarpour
SCO (Soft Corporate Offer)
Meaning, Purpose, Verification, and Professional Templates
Introduction
The Soft Corporate Offer (SCO) is the first formal document a seller issues in response to a buyer’s inquiry.
It is not a contract or a binding price guarantee — but it is a serious commercial indication that the seller is willing to negotiate under certain conditions.
Understanding the SCO is essential for new traders, as most international deals begin with this document. Unfortunately, many online scams also misuse SCOs, so knowing how to identify real vs. fake offers is a crucial skill.
This lesson will teach you:
- What an SCO is and how it works
- When sellers issue the SCO
- What a real SCO contains
- How to detect fake SCOs
- How to respond to an SCO professionally
- Complete SCO templates
1.What Is an SCO (Soft Corporate Offer)?
An SCO is a non-binding offer from the seller outlining the basic terms of a potential transaction.
It is called “soft” because the terms can still change during negotiation.
Purpose of SCO:
- Provide preliminary pricing
- Outline delivery terms
- Start official negotiation
- Allow the buyer to prepare the ICPO.
- Explain the deal structure.
An SCO shows that the seller takes the buyer’s inquiry seriously after receiving the LOI or preliminary communication.
2. When Do Sellers Issue an SCO?
A seller typically issues an SCO:
- After receiving the buyer’s LOI, or at least
- After the buyer provides a transparent inquiry with details
- When the seller has confirmed product availability
- When the seller wants to proceed toward FCO and the contract
Correct sequence:
- Buyer inquiry
- Seller provides basic price indication.
- Buyer submits LOI
- Seller issues SCO
- Buyer submits ICPO
- Seller issues FCO
- Contract stage
3. What Does an SCO Contain?
Although the SCO is not binding, it must include accurate commercial terms:
A) Seller Information
- Company name
- Address
- Contact person
- Email & phone
C) Quantity
- Spot shipment (single shipment)
or - Contract quantity (12-month, quarterly, etc.)
E) Delivery Terms (Incoterms 2020)
- Incoterm used
- Loading port
- Destination port
- Shipment schedule
G) Validity Period
Typically:
- 3 days
- 5 days
- 7 banking days
SCO prices often expire quickly due to market volatility.
B) Product Details
- Product name
- Specification
- Origin
- Packaging
D) Price
- Indicative price
- Price basis (FOB, CFR, CIF, DAP, etc.)
- Currency (usually USD)
F) Payment Terms
Examples:
- TT 30/70
- ILC (Irrevocable Letter of Credit)
- SBLC
- DLC
- CAD
- Escrow
H) Procedures
A step-by-step outline of how the deal will proceed.
4. SCO vs FCO – What is the Difference?
| Feature | SCO | FCO |
|---|---|---|
| Binding? | No | Yes (commercially binding) |
| Purpose | Start negotiation | Confirm terms for the contract |
| Issued When? | After LOI | After ICPO and CIS |
| Price Stability | Indicative | Confirmed/locked |
| Leads To | ICPO | Contract |
Understanding the difference prevents communication confusion.
5. How to Identify a Real SCO vs a Fake SCO
A real SCO usually includes:
- Seller company letterhead
- Contact details of the decision-maker
- Realistic procedures
- Logical payment terms
- Verified seller email domain
- Product specifications that make sense
Fake SCO red flags
❌ No company letterhead
Seen often in scam offers.
❌ Gmail/Yahoo email for sale
Professional sellers use corporate emails.
❌ Unrealistic price
If the price is far below market, it is fake.
❌ Request for the buyer's passport before ICP
Unnecessary and dangerous.
❌ Request for upfront charge
Genuine sellers never charge buyers for:
- Registration fees
- Administrative fees
- Allocation fees
- Lodgment fees
❌ Price valid for “30 days.”
Genuine sellers use short validity due to market volatility.
❌ No clear procedure
Scammers avoid professional structure.
6. How Buyers Should Respond to an SCO
The buyer should respond with:
- ICPO
- CIS (if not provided)
- Clarification questions (if necessary)
Never demand:
- POP
- SGS reports
- BL copies
- Past shipment documents
These come after contract/payment, not before.
7. Professional SCO Template
Below is a clean, realistic SCO template for international trade.
SCO TEMPLATE (Soft Corporate Offer)
Issued on Seller Company Letterhead
Date:
To: [Buyer Company Name]
Subject: Soft Corporate Offer (SCO) – [Product Name]
Dear Sir/Madam,
Following your Letter of Intent, we are pleased to provide the following Soft Corporate Offer for your review.
Seller Information
Company Name:
Registered Address:
Contact Person:
Email / Phone:
Product Description
Product:
Specification:
Origin:
Packaging:
Quantity
Total Quantity:
Contract Terms (optional):
Price
Indicative Price: [USD / MT]
Price Basis: [FOB / CFR / CIF / DAP]
Delivery Terms (Incoterms, 2020)
Loading Port:
Destination Port:
Shipment Schedule:
Payment Terms
[TT / LC / SBLC / DLC / Escrow]
Procedures
- Buyer issues ICPO & CIS
- Seller issues FCO
- Buyer signs FCO
- Contract drafted and signed
- Payment instrument issued
- Shipment according to schedule
-
Validity
This SCO is valid for five banking days from the date of issue.
Sincerely,
[Seller Name]
[Position]
[Signature & Company Stamp]
8. Why SCO Is Crucial in Trading
The SCO plays a vital bridging role:
- It filters serious buyers
- It clarifies commercial expectations.
- It helps prevent miscommunication.
- It prepares both sides for the ICPO and contract.
- It sets the tone for a professional negotiation.
Understanding SCO is necessary before moving into FCO and contract drafting.
Conclusion
The SCO is the seller’s first formal commercial offer and a key milestone in the trading workflow.
Mastering SCO interpretation and response will help you progress smoothly from basic inquiries to binding contracts.
What Comes Next?
In the following lessons, you will learn:
Lesson 7 – FCO (Full Corporate Offer)
Meaning, Legal Importance, and How It Leads to the Contract Stage
