Two buyers asked the same factory for the same concession in the same month. The first asked for open account on a first order and was declined. The second asked for the balance to move from before shipment to against the documents, and was accepted, because that change cost the factory less and was supported by an inspection the factory already performed. The concession was the same size and the framing was different.
Charger supplier credit terms: the questions buyers ask
Seven questions, and each has an answer the factory can act on.
They arrive in a predictable order, and the order matters, because the first two are the ones a factory can usually meet and the later ones depend on the first two having been settled.
Two buyers, two outcomes
The framing of the request decides the answer.
Asking for a change to the risk allocation is a proposal; asking for open account on a first order is asking the factory to carry the entire working capital of a stranger. The second request is not unreasonable, but it is answered after a shipment rather than before one.
Question one: can we move to open account?
Usually after a completed cycle, not before it.
Open account is the cheapest instrument for both sides because it removes bank fees and administration. It appears once a factory has shipped, been paid and had no dispute, which is a history rather than a promise.
Question two: why is the tooling deposit separate?
Because the tooling cannot be reused on another customer’s order.
A logo on an enclosure, a custom coil position or a moulded insert belongs to one programme, and the cost is committed before any unit is produced. Treating it as a separate line lets the buyer see what it is paying for and lets the factory account for it separately.
Question three: what happens if the shipment is late?
It depends on what the contract says the date means.
A production completion date and a sailing date are different commitments, and a delay caused by a vessel is not the same as a delay caused by a factory. The remedy follows the clause, so the clause is worth reading before the order rather than after the delay.
Question four: can the balance be paid after inspection?
Yes, and it is the most commonly granted concession.
An inspection performed before shipment produces a record that both parties accept, and a balance released against that record costs the factory very little. This is why it is usually the first term to move on a second order.
Question five: whose bank charges are whose?
Named in the order, or split by default.
Where nothing is written, each bank charges its own customer, and an intermediary bank’s fee lands wherever the correspondent decides. Naming the allocation removes the small deduction that otherwise appears on the received amount.
| Request | Usually granted | What it costs the factory | When to ask |
|---|---|---|---|
| Open account | After a completed cycle | The whole working capital period | Second order onwards |
| Balance against documents | Often | A few weeks of funding | Once inspection is agreed |
| Lower tooling deposit | Rarely | Committed non-reusable spend | Where the volume is contractually fixed |
| Longer price validity | Sometimes | Component price exposure | When components are volatile |
Question six: what changes a supplier’s terms?
Three things, and none of them is persuasion.
A completed cycle without dispute, an inspection arrangement that gives the factory certainty, and a contractually fixed volume that lets it buy materials ahead. Each reduces the risk the factory is carrying, and the terms follow the risk rather than the relationship.
Question seven: how are the terms documented?
In the purchase order, and repeated in the contract.
The deposit, the trigger, the document that evidences it, the currency and the bank charges allocation. Where the same terms appear in both documents, an inconsistency between them is the thing to check before signing rather than the terms themselves.
What the direction of the ask shows
Most of the questions buyers ask are about moving risk rather than about price. A later balance trigger, an inspection before payment and a longer price validity all reduce what the buyer carries, and each is granted where the factory’s exposure falls with it.
The two that are rarely granted are the ones where the exposure rises. A lower tooling deposit and open account on a first order both ask the factory to fund a purchase it cannot recover, and a factory accepting them is pricing that risk into the unit.
Reading the answers that way makes the negotiation shorter, because the request is framed as a change in the allocation rather than as a request for better terms.
FAQ
Can a first order be placed on open account?
It can be asked for and is rarely granted, because it asks the factory to fund the whole cycle for a buyer it has not shipped to. A shorter deposit or a later balance trigger achieves most of the same cash effect. Ask for the later balance trigger first, because it reduces the cash effect without asking the factory to fund the tooling.
Does a bigger order always improve the terms?
Volume improves the unit price more reliably than it improves the payment terms. Terms follow risk, and a larger order with a new buyer carries more risk rather than less. The terms follow the risk rather than the volume, so a larger first order carries more exposure rather than less. The exposure rises with the order size for a buyer the factory has not shipped to.
Is the tooling refundable if the programme ends?
It depends on who owns the tooling and what the contract says. Where the buyer has paid for it outright, the position on ownership and collection is normally stated before the tool is cut. Where the buyer has paid for the tool outright, the position on ownership and collection is normally stated before it is cut. Record the amortisation route in the order.
How long should a quoted price stay valid?
Long enough to cover the buyer’s approval cycle. A validity period shorter than the internal approval process simply means the price is re-quoted before the order, which moves the discussion to components rather than to margin. A validity period shorter than the approval cycle simply moves the discussion to components when the price is re-quoted. Ask for a validity period that covers the approval cycle.
Next step
Send the order volume, the payment structure you would like and the inspection you can support to Wecent Group through the contact page. The reply states which terms the factory can carry on the first order and which move on the second. Related reading: charger manufacturing services, wholesale chargers and charger quality control. External references: ICC business solutions for trade, ICC Commercial Crime Services, Bank for International Settlements, World Trade Organization, US Customs and Border Protection and UK HM Revenue and Customs.
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