50/50 Payment Terms: The Hidden Risk in "Before Shipment"

“We always do 50% deposit, 50% before shipment — that’s standard, right?” A buyer asked me this last month, then admitted he’d sent the balance two weeks before his goods actually moved, because the supplier said the factory was “almost ready.” He had paid in full and held nothing.

The split is common. The problem is the trigger. “Before shipment” sounds like a milestone, but it is not tied to any document you can check. The supplier decides when it has happened, and once the balance is gone, your leverage is gone.

What the balance should actually be tied to

Make it a verifiable document instead of a promise. The cleanest trigger is a Bill of Lading — issued only after the goods are loaded on the vessel — or a copy of the Telex Release or original B/L set. No B/L, no balance.

Here is how that plays out on a real order. One buyer’s 600 cartons of mixed homeware measured 60 × 40 × 40 cm each, gross weight 14.5 kg per carton, total 57.6 CBM and 8.7 tonnes. That is roughly 151 kg per CBM — dense enough to ship practically any way, and each carton held a few hundred dollars of goods, so the cargo was worth protecting. Under the loose 50/50, the buyer could have paid the balance while the goods sat in a warehouse. Tied to the B/L, he paid when the container was on the water.

Two details make this work: the supplier must accept a copy of the B/L as proof, and the balance must be sent against that copy, with originals released on receipt. If the supplier insists on payment before loading, ask why — that is a fact about their cash flow, not your cargo.

If you want a second pair of eyes on the terms before you wire anything, our team reviews supplier contracts and payment triggers as part of sourcing support. It is a short conversation that can save a long dispute.