The payment risk seesaw
Every international payment method sits somewhere on a spectrum: at one end the buyer carries all the risk (100% advance), at the other the seller carries it all (open account). The art is picking the point both sides can live with.
The four main options compared
Method Buyer risk Seller risk Typical cost Best when
--- --- --- --- ---
100% advance Very high None None Tiny orders, samples
Letter of credit Low Low 0.5–2% + bank fees Large orders, new partners
Escrow (platform) Low Low Platform fee Marketplace deals
Open account (net 30/60) None Very high Financing cost Trusted repeat partners
Who carries the risk
:::chart Risk borne by the buyer (100 = all buyer risk)
100% advance | 100
Letter of credit | 30
Platform escrow | 25
Open account net 60 | 5
:::
Practical guidance
- First deal with a new supplier: escrow or LC, never full advance.
- Under $2,000: advance is normal; the LC fees exceed the risk.
- Over $50,000: LC or staged escrow milestones are worth the paperwork.
- After 5+ successful deals: negotiate partial open-account terms to free cash flow.
> Payment terms are a trust dial, not a switch. Turn it gradually as the relationship proves itself.
On Prebro
Prebro deals support staged payments tied to deal milestones — deposit, production, shipping documents, delivery — so both sides see exactly what is paid, what is held, and what is released, inside the deal room.