An SCO, or Soft Corporate Offer, is a preliminary offer document issued by a seller, supplier, mandate or authorised representative to indicate the availability of a product under certain commercial terms.
It is called “soft” because it is generally not the final binding contract. It sets out indicative terms and allows the buyer to review whether the product, pricing, quantity, delivery terms and procedure are suitable.
What an SCO Usually Contains
- Seller or issuer information
- Product name and specification
- Available quantity
- Origin, where disclosed
- Delivery terms such as FOB or CIF
- Price or pricing formula
- Payment terms
- Transaction procedure
- Validity period
Why Buyers Request an SCO
Buyers request an SCO to understand what the seller can offer before issuing an ICPO or entering detailed negotiation.
Red Flags
Red flags may include unrealistic pricing, vague seller details, missing product specification, unclear procedure, no validity period, or pressure to pay upfront fees before proper verification.
Related: What Is an ICPO? · Common Commodity Trading Red Flags