One of the biggest cash-flow challenges for FBA sellers sourcing from China is the standard 30/70 payment split: 30% deposit upfront, 70% due before shipment. With production and ocean freight often taking 60–90 days, sellers can find themselves funding inventory for months before it generates any revenue. The question is: how do you negotiate better terms, and what does it take?
Standard Payment Structures & Their Cash-Flow Impact
- 30/70 split (most common): Full payment due before goods leave the factory or port
- Alternative structures some suppliers will consider:
- Smaller upfront deposit with balance due against bill of lading (BoL)
- Net terms on reorders (pay after shipment)
- Deposit reduction for proven order history
What Actually Moves the Needle
Payment term improvements are not automatic—they depend heavily on:
- Order history with the supplier: New suppliers have maximum risk and minimum leverage; established relationships unlock flexibility
- Order volume & frequency: Regular, predictable purchases make you a more valuable customer
- Payment reliability: A track record of on-time payments builds trust for riskier terms
The move from 30/70 to something more favorable typically happens incrementally as the supplier gains confidence in your creditworthiness and commitment.
How Squatio Helps
When you’re evaluating new sourcing opportunities or scaling production with existing suppliers, Prospect (Product Database) helps you validate category demand and competitive pricing before committing to large orders. By understanding market fit early, you can negotiate smarter: suppliers are more willing to flex on terms when they see you’re targeting validated, high-potential ASINs rather than making speculative bets. This also helps you prioritize which suppliers are worth the relationship investment for term negotiations.
Community Question
What has your experience been with payment term negotiations? Did you hit a specific order volume or payment milestone with your supplier before they offered flexibility, or did you negotiate from the start based on a relationship or industry connection?