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The 30/70 payment trap — and how to map it

Supplier deposits and balance payments land months before the stock they pay for sells. Here’s how to see the cash crunch before it arrives.

ChainPilot Team

June 5, 2026 · 3 min read

If you source from China, you know the standard terms: a 30% deposit when you place the order, and the 70% balance before the goods leave the factory. It's a fair arrangement for a supplier who's buying materials and running a line for you. It's also one of the most common reasons profitable brands run short of cash.

Why it's a trap

The problem isn't the amount — it's the timing. Walk through a single order:

Day 0 — you place the PO and pay the 30% deposit
Around day 30–45 — production finishes and the 70% balance is due
Soon after — the freight invoice arrives
Around day 75–90 or later — the stock lands and starts selling
The months after that — the revenue trickles back in as it sells through

Almost all of the cash goes out before a single unit of that order is available to buy. You're financing your inventory for months, and it's easy to lose sight of because every individual payment looks reasonable on the day.

Profitable brands still run out of cash. Usually it's timing, not margin.

It compounds as you grow

One order is manageable. Ten SKUs across four suppliers is where it bites. Orders placed weeks apart can have balance payments that land in the same month — and that month is when a brand with healthy margins suddenly can't cover a freight invoice or an ad budget.

Map every payment, not just the PO

The purchase order is only part of the cost. To see the real picture, put all of these on the calendar:

Supplier deposit and balance
Freight — sea or air — and any forwarder fees
Duties, tariffs and customs clearance
Pre-shipment inspection fees
Amazon inbound and fulfillment fees, plus any prep or 3PL costs

One purchase order mapped to cash: the outflows land months before the sales.

Put them on a calendar, against the stock

Lay the outflows out month by month, next to when the stock arrives and when you expect it to sell. The crunches stop being surprises: you can see the month where three balances and a freight bill collide, and you can see it with enough notice to do something about it.

Rule of thumb

Before you approve a PO, know which month its balance payment lands in — and what else is due that month.

What to do when you see one coming

Stagger orders so balance payments don't stack in the same weeks
Split large orders into two production runs or two shipments
Prioritize by sell-through — fund the products that turn cash back fastest first
Revisit terms with suppliers you've built a track record with
Arrange financing early, while you have options, not the week the balance is due

You can't avoid the gap between paying for stock and selling it. You can stop it from surprising you — and that alone takes most of the stress out of scaling.

The 30/70 payment trap — and how to map it

Why it's a trap

It compounds as you grow

Map every payment, not just the PO

Put them on a calendar, against the stock

What to do when you see one coming

ChainPilot Team

Put this playbook to work

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