The first US retail PO arrives with “Net 30” printed in the terms box. The client forwarded it asking about vessel space; what I saw was something else: from the day he pays his materials deposit to the day this invoice actually lands as cash, more than three months pass — financed entirely by him.
Net 30: the start date matters more than the 30
Net 30 means payment due 30 days after invoice — you are extending credit. The devil is the trigger: invoice date, ship date, or receipt-and-acceptance date? US retail leans on the last — add four or five weeks of ocean transit and the real payment day lands far later than instinct suggests. Nailing the trigger in writing beats arguing 30 versus 45.
The real gap: a financing chain, not 30 days
Draw the timeline from first outlay to cash: materials and production (~30 days) + ocean and clearance (~35) + Net 30 after acceptance (~30) + wire transit and short-payment handling (days) — over three months (illustrative). And with monthly orders, two or three invoices float simultaneously: the financing stacks, it does not rotate.
So before accepting Net 30, answer one question: at the buyer’s volume, what is your peak total outstanding — and can working capital carry it? If that math fails, no negotiation skill saves it. The exporters that terms bankrupt mostly took too many orders, not too few.
Terms are a bargaining chip, not a rule
US retail payment terms are nearly always negotiable; the discipline is trading concessions for value:
- Terms for volume: accept Net 30 against minimum orders or an annual commitment
- Terms for price: a Net 60 unit price should exceed a T/T-prepaid price — capital has a cost, and it belongs in the quote, not in your margin
- New customers start short: first three orders on T/T or Net 15; clean records earn extensions
- Cap the exposure: set a credit line on total outstanding (e.g., two months of shipments, illustrative) — at the line, old invoices clear before new goods ship
The other half of the same negotiation — deposit ratios and document release — lives in the payment-terms article.
When payment slips: the escalation ladder
Snapping on day one burns the relationship; waiting a month burns the cash. Climb in order: a friendly reminder 3–5 days before due; a formal past-due notice with statement at day 1–7; at two weeks, the operational lever — new orders link to old invoices, with shipments pausing until the account clears (why holding the B/L matters, see the release-methods article); past thirty days, collection agencies or counsel, weighed against the amount. The pattern that ruins exporters is shipping order four while orders one through three sit unpaid — the linkage rule exists to make that impossible. For large exposures, export credit insurance spreads the default risk — a signpost worth knowing, arranged through insurers.
Where SKYCARGO fits
Terms decide when money arrives; logistics decides when goods must leave — planning them together is the whole game. SKYCARGO INC runs Taiwan-US B2B logistics with document-release timing aligned to your payment position. Talk to us. (Personal shipments: Shiptw.)
Payment terms and credit decisions are case-by-case; general reference only.
