Payment terms are where a first order from Egypt most often stalls. The buyer asks for 30 days from delivery, the supplier asks for the full amount before loading, and neither side is being unreasonable given what each of them knows about the other, which at that point is very little. Here is how the terms are actually structured on a part-load, and what is genuinely negotiable on a first order.
The standard structure
The common arrangement on a part-load is a deposit against order confirmation and the balance against shipping documents. The deposit is typically 30 percent, sometimes 50 percent on a small order or on a product where the exporter is buying material specifically for you. The balance falls due when the documents are ready, which is after loading and usually before or around the sailing date.
Against documents means the exporter releases the bill of lading, invoice, packing list, phytosanitary certificate and certificate of origin once the balance is settled. Without the bill of lading you cannot collect the cargo at destination, so the document set is the security in the transaction. The exporter is not holding your goods hostage, they are holding the paperwork until they are paid, which is the ordinary mechanism in this trade.
Why open credit is rare on a first order
An Egyptian exporter shipping a part-load has already paid the grower, the packhouse labour, the cartons, the pallets, the inland haulage and often the freight before your container leaves. On a part-load the amounts are small enough that the cost of chasing an unpaid invoice across borders exceeds the value of the shipment. So credit is extended on relationship history, not on company size or an introduction.
That is the honest answer to why a well-known European wholesaler is still asked for a deposit on order one. It is not a judgement about the buyer. It is that the exporter has no way to enforce anything if the load is refused on arrival for a reason that has nothing to do with quality.
What is negotiable on a first order
The deposit percentage is negotiable, usually between 30 and 50 percent. The timing of the balance is negotiable, and getting it moved from before loading to against documents is a real and worthwhile concession. Which currency you pay in is negotiable. Whether the exporter absorbs some or all of the intermediary bank charges is negotiable, and those charges are larger than most buyers expect on a small transfer, as set out in the note on bank charges and currency on a small Egyptian order.
What is not negotiable on a first order is unsecured credit after delivery. Asking for it tends to slow the whole conversation down rather than move it forward.
Letters of credit on a small order
A letter of credit is secure for both sides and is the normal instrument on full-container business into several markets. On a part-load it is usually the wrong tool. Issuing and confirming a credit carries bank fees that are close to fixed, so on a shipment of a few thousand dollars the cost is disproportionate, and the documentary discipline required takes days that a short shelf life crop does not have. A cash against documents arrangement achieves most of the same protection at a fraction of the cost.
What changes on the third order
Terms improve with shipment history rather than with negotiation. After two or three clean shipments where the load arrived as specified and payment came when it was due, the deposit typically drops or disappears, and some buyers move to a short credit period. This is worth factoring into the first order economics. You are buying a payment relationship as well as a pallet of fruit.
Compare terms properly before you choose a supplier
Payment terms change the true cost of a quotation, and two prices that look similar can differ meaningfully once the deposit, the bank charges and the currency are accounted for. The method for putting two offers on the same basis is set out in the guide to comparing two Egyptian quotations.
Ask us for terms in writing
Tell us the products, the volume and the destination and we will quote the price, the Incoterm under Incoterms 2020 and the payment terms together, so there is nothing left to discover after you accept. Same-day quotes on most requests. WhatsApp +20 10 9911 1918.