OEM Manufacturing
OEM Payment Terms Beyond TT: LC, DP, DA & Open Account
Payment terms should mature with the relationship. Here is the ladder from first order to trusted partner.
The ladder
- TT 30/70 - first orders; standard SME practice
- LC at sight - large orders; bank-guaranteed, 1-3% cost
- DP (documents against payment) - you pay when shipping documents arrive; middle ground
- DA (documents against acceptance) - pay 30-90 days after accepting a time draft; needs trust + limits
- Open account - ship now, pay in 30-60 days; the trust summit, usually credit-insured
Negotiating up the ladder
Earn better terms with: order history (12+ months clean), volume growth, and credit insurance (protects the supplier, unlocks your terms). Every rung improves your cash conversion cycle.
Frequently asked questions
What payment terms can I negotiate with factories?
Progress from TT 30/70 → LC/DP → DA → open account as trust and volume build, ideally with credit insurance.
Have a cookware project in mind?
We manufacture triply cookware and supply tri-ply circles for OEM, private label and distribution. Tell us your specs - we reply with a quote.