Every term moves risk from one side to the other
Cash before shipment puts all the risk on the buyer: the money has left, the goods have not, and the only protection is the supplier's word. Open credit at sixty days puts it all on the seller, who has shipped and may wait two months to be paid. Everything else is a position between those two ends, and the price usually reflects where a given order sits on that line.
This is why the same part number can carry two prices from the same supplier. An order paid in advance is cheaper to finance than an order shipped against a credit line, and the difference is not a discount or a penalty. It is the cost of the money and the cost of the risk, moved to whichever side agreed to hold it.
The four arrangements you will actually be offered
Full payment in advance, by telegraphic transfer, is the default for a first order with a new overseas supplier. It is fast and simple, and for a small order the deposit and the balance are not worth separating. Deposit with the balance against a copy of the bill of lading is the middle ground, and it is where most repeat trade settles: the buyer risks only the deposit, the seller is protected against a buyer who abandons the shipment.
A documentary letter of credit replaces trust with bank documents, and it is the right instrument when the order is large or the relationship is new. It costs money to open and demands that every paper match exactly. Open account terms, where the goods ship and payment follows on agreed days, are reserved for buyers with a payment history behind them, because that is the only thing that justifies the seller carrying the risk.
What changes the terms you can get
Four things move the answer. Order size matters because the fixed cost of handling a letter of credit is the same on a small order as a large one. Order history matters more: a buyer with twelve clean payments is cheaper to extend credit to than a stranger, and suppliers price that difference in.
Whether the line is on the shelf or made to order matters as well. A part lifted from stock can be resold if a buyer disappears, so a deposit is enough. A part sourced or manufactured against one specific order cannot be resold easily, which is why deposits run higher on custom and make-to-order lines. The destination country matters last, because banking costs and remittance routes are not the same everywhere.
Guangzhou Shenyue Machinery Technology Co., Ltd. quotes the terms at the same time as the price, so a buyer can see what a deposit is actually buying instead of discovering it after the order has been placed.
Documents are the real protection, not the promise
Payment terms only work when the paperwork behind them is complete. A proforma invoice fixes the specification, the quantity, the price and the terms before anything is paid. A commercial invoice, a packing list and the transport document then define what was shipped and who holds title at each stage. A letter of credit adds a bank's check that those documents match what was agreed.
The general rule is to keep the documents simple and consistent, and to raise any special requirement before the goods are packed rather than after. A certificate that is needed for import clearance is cheap to obtain at packing time and expensive to obtain once the container has sailed.
How we work
Guangzhou Shenyue Machinery Technology Co., Ltd. has supplied excavator parts from Guangzhou since 2007, with 3,000+ part types on the shelf and 100,000+ part numbers available to order. Standard terms are a deposit with the balance against documents, and a letter of credit is welcome on larger orders. We are an independent supplier, formally authorized for five brands, and not an authorized dealer for Kobelco or any other machine brand.
Payment arrangements, from seller-protective to buyer-protective
| Arrangement | Best suited to |
|---|---|
| Full payment in advance | A first order, small value, where the transfer cost is a large share of the total. |
| Deposit with balance against documents | The normal basis for repeat trade. The buyer risks the deposit, not the whole order. |
| Documentary letter of credit | Large or new orders, where a bank should verify the documents rather than a promise. |
| Open account, payment on agreed days | Buyers with a long clean payment record. The seller carries the risk deliberately. |
Frequently asked
Is it safe to pay a new supplier in advance?
It is a judgment about the company, not the term. Ask for the company registration, the address of the warehouse and the names of two buyers who have ordered before. Then start with a small order, inspect it, and let the payment terms follow the record. A supplier who will not accept a small first order and grow into larger ones is worth a second look.
Does a letter of credit always protect the buyer?
It protects against a seller who does not ship, because the bank pays only against documents. It does not protect against a seller who ships something that meets the documents but not the expectation, which is why the specification on the proforma invoice has to be precise. Junk paperwork in a letter of credit is still junk, only more expensive.
What is a fair deposit on a sourced or made-to-order line?
Higher than on shelf stock, and that is reasonable. If the part cannot easily be resold to another buyer, the deposit is compensating the supplier for real exposure rather than extracting extra cash. On ordinary shelf lines, a thirty percent deposit is a common starting point and a full prepayment on a first order is normal.
Send the machine model, serial number, the part numbers you have and the quantity. That is all we need to quote and confirm fitment before payment.
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