What are payment terms from suppliers?
These are the terms that suppliers grant in order to sell their goods.
There are many different types of terms based on the type of product, country of origin and destination, the trust that you have gained with your supplier, the size and frequency of orders…
Most suppliers, particularly those based in South East Asia, will ask for anywhere between 10% and 50% when the order is made and the remaining before the stock is shipped. For lucky (and large) buyers, payments can be made up to 45 days after the invoice is issued.
For European suppliers, in contrast, it is more common to receive 30 to 45 days terms for invoices issued.
An important point to understand is that more advantageous payment terms imply the supplier is offering financing. And financing is rarely for free. Hence price mark-ups are common when payment terms improve.
