Export payment terms

Export payment terms decide one thing — how safely and how fast you get paid 💸

Most beginners focus only on getting orders…
but experienced exporters focus on securing the payment first 👇

Here’s a clear and detailed breakdown of the most commonly used payment terms:

⸻

• Advance Payment (Prepayment)
This means the buyer pays you before shipment.

👉 You receive money → then you dispatch goods

Why it’s important:
• Zero payment risk for you
• Best for new exporters or new buyers
• Improves your cash flow

When to use:
• First deal with a buyer
• Small orders
• When demand for your product is high

⸻

• Letter of Credit (LC)
A bank-guaranteed payment method. The buyer’s bank promises to pay you once you submit correct documents.

👉 You ship goods → submit documents → bank releases payment

Why it’s important:
• Very secure (bank is involved)
• Used in large international deals
• Reduces trust issues between buyer & seller

Things to be careful about:
• Documents must be 100% accurate
• Even small errors can delay payment

⸻

• Documents Against Payment (DP)
In this method, the bank gives documents to the buyer only after they make the payment.

👉 Goods arrive → buyer pays → gets documents → clears goods

Why it’s important:
• Safer than credit terms
• Commonly used with semi-trusted buyers

Risk:
• If buyer refuses to pay, goods can get stuck at destination

⸻

• Documents Against Acceptance (DA)
Here, the buyer accepts a payment promise (like 30/60/90 days) and gets documents before paying.

👉 Buyer gets goods now → pays later

Why it’s risky:
• High chance of delayed or default payment
• No strong guarantee like LC

When to use:
• Only with long-term, highly trusted buyers

⸻

Simple strategy to follow 👇
• New buyer → Always go with Advance or LC
• Growing relationship → You can try DP
• Strong trust built → Consider DA carefully

⸻

Export is not complicated —
but one wrong payment term can cost you lakhs

Smart exporters don’t just close deals…
they close safe deals 💯

Save this & build your export business the right way
.
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Видео Export payment terms канала Sai Kumar