MeridexionPayment terms are not really about money. They are about who carries the risk if the part doesn’t turn up, and both sides pricing that risk in. Seen that way, the negotiation gets a lot quicker.
Payment terms are cheap insurance when the supplier is new to you.
The common structures
Put side by side:
| Structure | Protects | Typical situation |
|---|---|---|
| 100% in advance | Supplier | First order, small value, or made-to-order parts |
| 30/70 deposit and balance | Balanced | Production orders with inspection before balance |
| Payment against documents | Buyer | Sea freight, established relationship |
| Letter of credit | Both | High value, new counterparties |
| Open account, 30 days | Buyer | Long-standing accounts with agreed credit |
What to negotiate first
The balance payment should be tied to an event the buyer can verify — inspection passed, photographs received, documents issued — not to a date. “Balance before shipment against inspection report” is a workable term; “balance 30 days after order” isn’t, because it removes all leverage before dispatch.
Risk controls that cost little
- Inspection before balance — the strongest and cheapest control on a production order.
- Documents against payment — bill of lading released on payment, so the buyer controls the goods at destination.
- Milestone payments on long lead items — deposit on order, progress payment at casting, balance before shipment.
- Bank instruments for large values — a letter of credit costs a percentage but removes counterparty risk on both sides.
What a supplier’s terms tell you
A supplier who insists on 100% advance for a stock item is protecting against nothing except their own cash flow, and is telling you something about how they are financed. For the matching hardware, see our range of turbocharger and air system parts. A supplier who accepts inspection-tied balance payments is usually one who expects to pass inspection.
Reasonable first-order structure
30% deposit, inspection with photographs, 70% before dispatch against documents. For repeat orders, move to payment against documents, then to agreed credit terms once the relationship has a track record.
Payment terms sit inside the wider sourcing sequence described in how sourcing works.
People also ask
What payment terms are normal for marine spare parts?
For a first order, 30% deposit with the balance before shipment is common. Established accounts often move to payment against documents, and long-standing customers to 30-day credit.
How do I protect myself on a first order?
Tie the balance payment to an inspection event with photographic evidence rather than to a date, and use documents against payment so the bill of lading is released only on settlement.
When is a letter of credit worth it?
On high-value orders with a new counterparty, where the cost of the instrument is small relative to the risk of a non-performing order.
Get this sourced
Send what you have – part number, drawing, or a photo. We confirm the specification before we quote, not after.