When sourcing products from Vietnam, understanding payment terms and Incoterms is essential. These two elements define how you pay, when you pay, and who is responsible for costs and risks during shipping.

Payment terms specify how and when buyers pay exporters. Choosing the right payment method helps manage cash flow and reduce transaction risks.

  • T/T (Telegraphic Transfer)
    The most common method. Usually requires a deposit (e.g. 30%) and balance payment before shipment or after B/L copy.

  • L/C (Letter of Credit)
    A bank-guaranteed payment method, suitable for large orders or new supplier relationships.

  • D/P (Documents against Payment)
    Buyer pays after receiving shipping documents via bank.

  • D/A (Documents against Acceptance)
    Buyer pays at a later agreed date after accepting documents.

  • PayPal / Credit Card
    Mostly used for samples or small orders.

Incoterms (International Commercial Terms) define the responsibilities of buyers and sellers for transportation, insurance, customs clearance, and risk transfer.

  • Buyer arranges all transportation and export procedures

  • Lowest product price, highest buyer responsibility

  • Seller delivers goods on board at the port of shipment

  • Buyer controls international shipping

  • Seller pays freight and insurance to destination port

  • Buyer handles customs clearance upon arrival

  • Seller handles all costs, taxes, and delivery

  • Most convenient, but usually higher price

  • Lower risk for seller → lower price

  • More responsibility for seller (DDP) → higher price

  • Shorter payment terms → better pricing

  • Secure payment methods (L/C) → higher banking costs

  • Match payment terms with order size and supplier trust level

  • Clarify Incoterms before confirming the price

  • Always confirm destination port and currency

  • Avoid changing Incoterms after quotation

VietnamExporter.com allows buyers to clearly select payment terms and Incoterms when submitting RFQs, helping suppliers provide accurate and comparable quotations.