A manufacturer can have the right product, the right distributor and the right price — and still run into trouble because of when the money actually arrives.
Currency Exposure
Quoting in USD or RMB to a European buyer pushes the currency risk onto them — and many will simply prefer a competitor quoting in EUR.
Quoting in EUR makes the offer easier to understand for European buyers, but it moves the currency risk back to the manufacturer.
"There is no version without risk. There is only a version where you have decided who carries it — instead of discovering it later by accident."
Net Terms Creep
Net 30 is a common reference point in European B2B trade.* Net 60 is often requested by larger European buyers or retail structures.* Net 90 is where cash-flow problems can start for smaller manufacturers — especially when combined with a 4-6 week shipping time from China.*
A rough cash-flow reality check:
Production + shipping
~6 weeks from order to arrival in Europe.*
Customs + last-mile handling
~1-2 weeks depending on destination.*
Net 60 payment terms
60 days from invoice date.*
Total cash tied up
Roughly 3-4 months per shipment.*
That is not only an accounting issue. It decides how much working capital the manufacturer must keep available to support European growth.
If a manufacturer runs several shipments per year on long payment terms, capital is not tied up once. It becomes a permanent part of doing business in Europe.
What Actually Helps
There are several ways to reduce the pressure: trade credit insurance, which may add around 0.3-0.8% of invoice value,* partial upfront payment, where 10-30% can be a normal ask for a first order,* or working with a distributor who pays faster in exchange for a small volume or price concession.
Each option has a cost. The point is to choose the cost deliberately.
What happens to your cash position if your three largest European accounts all pay on day 60, in the same month? If nobody has modeled that scenario, the company may not yet be ready for serious European growth.
*Based on our usual market experience. Figures and ranges may vary by product category, buyer profile, country, order volume and current market conditions.
Is your cash flow ready for European payment terms?
Payment structure is part of what EBDT reviews during market entry planning — a finance question dressed up as a sales question.