How Japanese Suppliers Quote, Decide and Get Paid

The hardest part of a first order with a Japanese supplier is usually not the product. It is that the money and the decision making work on conventions nobody writes down, because every Japanese company already knows them. Then an overseas buyer reads the quotation, finds no payment date on it, asks when the invoice is due, and gets an answer that sounds like a riddle.

Here is the part of our own process that comes from Japanese convention, so you can plan around it instead of discovering it.

Month end closing, payment at the end of the next month

The standard arrangement in Japan, and ours, is that invoices close at the end of the month and fall due at the end of the following month. In Japanese this is written as a closing date plus a payment date, and it is so normal that a quotation often does not spell it out at all.

What it means in practice is that your effective credit period depends entirely on where in the month the work lands.

Work completed	Invoice closes	Payment due	Effective days
3 March	31 March	30 April	about 58 days
18 March	31 March	30 April	about 43 days
30 March	31 March	30 April	about 31 days
2 April	30 April	31 May	about 59 days

Two things follow. An order finished on the first of a month gets you nearly two months of credit, and an order finished on the last day of a month gets you one. Nobody is being clever; it is just how the monthly accounting close works. If cash timing matters to you, the date your run finishes is worth a conversation.

For a first order from overseas we confirm the terms with the quotation, so do not assume the standard cycle applies to you. Ask early, because it changes your working capital more than any line on the price list.

Bank transfer, and who pays the fees

Settlement in Japan is normally a bank transfer. On an international transfer there are fees at both ends and often an intermediary in the middle, so agree in advance who absorbs them. An invoice that arrives short by the cost of the wire is a tedious thing to reconcile for everyone.

The cycle, worked through a year

Abstract descriptions of month end closing never quite land, so here it is as dates. An order placed in the left hand column, invoiced on our normal cycle.

Order delivered	Invoice closes	Payment due	Days from delivery
5 March	31 March	30 April	About 56
28 March	31 March	30 April	About 33
2 April	30 April	31 May	About 59
20 December	31 December	31 January	About 42

Look at the first two rows. The same cycle gives you 56 days on one order and 33 on another, and the only difference is where in the month it landed. That is not a negotiating position anybody took, it is just how a closing date works, and it is worth knowing before you build a cash flow model on an average.

The December row is the one to watch. The close falls inside the New Year break, which is also when your own bank may be shut. Build a margin into any payment date that lands in that window.

How to read a Japanese quotation

A Japanese quotation is an itemised document with a validity period, and it is more literal than most buyers expect. It prices exactly what you asked about and nothing else, which is why a vague enquiry gets a vague quote.

• Prices are quoted tax exclusive. Ours are in USD, and the unit prices are rounded up to the nearest five: five cents below ten dollars, five dollars above it. That is why the rates land where they do, on 0.65, 1.10 and 0.15, and why the set up fee is 130. A total is those unit prices added together, so it is an exact figure with whatever ending the arithmetic gives it. Add the worked examples up yourself; they are meant to reconcile.
• Each line is a unit price with a quantity, not a bundled project fee. Filling, bags, labels, set up and dispatch appear separately, because they scale differently.
• Freight is normally stated separately or left out, because it depends on a carrier and a destination the supplier has not chosen.
• The quotation has a validity date. Material and packaging prices move, so an old quotation reopens the conversation. It will not still hold the price.

Our own rate card is published in full. The numbers are on the contract packing page, and the 500 bag article prices out a full first order so you can see the shape of a bill before you ask for anything.

Why the answer is slow and then does not change

Quotations come back quickly in Japan. Decisions do not. Inside a Japanese company, an agreement is usually settled internally before anyone says yes to you, with the people who would have to do the work consulted first. From the outside this looks like silence, and the temptation is to read it as a soft no and start chasing.

The trade is worth understanding. You wait longer for the answer, and when it comes it is the whole company’s answer. Once the internal agreement exists, the people who could have objected already have, so the schedule you were given tends to hold. If you are used to fast yeses that quietly unravel, this is the opposite failure mode.

Reading the replies

Two phrases are worth knowing, in English translation as much as in Japanese. When a Japanese supplier says something is difficult, read it as a no being delivered politely. A flat refusal is rare enough that the word difficult is usually carrying it, and pressing will not change the answer. When a supplier says they will consider it, that can be a real answer in progress, and it can be the same polite no. You cannot tell from the wording, so do not try. Ask for a date by which you will have an answer. That one question gets you something usable either way, and it costs nobody any face to answer it.

The useful response to both is the same: ask what would have to be true instead. A supplier who cannot do what you asked can often do something adjacent, and that is a far more productive question than asking again.

What to put in a first message

The single most common reason an enquiry stalls is that it does not contain enough to price. We cannot answer what a packing run costs without knowing what is going in the bag and how many bags there are. Four lines are usually enough:

• What the material is, and that it is already finished. Powder, dried pieces, loose leaf, and whether it is dried, milled or roasted already.
• The bag size in grams, or your best guess at a range.
• How many bags in total. If it is under 500 across everything, say so, because there are ways to combine formats to reach it.
• When you need the finished stock in your own warehouse, as a date.

What does not help is asking for a catalogue, asking for a non disclosure agreement before any numbers have been discussed, or describing a product concept without a quantity. None of those are offensive, they just cannot be answered, so they turn into a round of questions that costs you a week.

Email, WhatsApp and the time difference

Japan is UTC plus nine, with no daylight saving. For a European buyer that means the Japanese working day is finishing as yours begins, and for a North American buyer it means your afternoon is the following morning in Kyoto. Two exchanges a day is realistic; a same day back and forth usually is not.

WhatsApp reaches us fastest and we answer in English. If you send several questions at once, number them, because numbered questions come back as numbered answers and nothing gets lost. You do not need formal Japanese, you do not need to worry about honorifics, and a direct question is read as efficient. What does read badly is pressing twice in one day for an answer that was promised for the end of the week.

Build the holidays into the plan

The other thing that quietly moves a payment date is the Japanese holiday calendar, and it does not move it the way people expect. Over New Year the banks are closed as well as the plants, so a payment date falling in that window really does slide. Golden Week and Obon are a different matter. The public holidays themselves are non working days, but Obon in the middle of August is not a public holiday at all, so your bank may be open while every food plant in the country is shut.

The practical rule is to stop treating one calendar as three. Ask your own bank for its year end dates, ask your customs broker for its own, and ask us separately for the plant. The Japanese factory calendar covers the production side, which is the one that moves the most.

The short version

• Expect month end closing with payment due at the end of the following month, so your credit period depends on the day the work finishes.
• A first order from overseas gets its terms confirmed with the quotation. Ask.
• Quotations are tax exclusive, itemised, time limited, and answer exactly what you asked.
• The decision takes longer than you want and holds better than you expect.
• Difficult means no. Considering it could mean either, so ask for a date.
• Send material, bag size, bag count and a date, and you will get a priced answer back.

Our full conditions, minimums and rate card are on the contract packing page.

Questions we get asked

What are your payment terms?

The standard Japanese arrangement: we close at the end of the month and the invoice falls due at the end of the following month. For a first order from overseas we confirm the terms with the quotation, so ask us and do not assume the standard cycle applies to you.

Why does the quotation only cover what I asked about?

Because a Japanese quotation is literal. It prices exactly the question, line by line, which is why a vague enquiry gets a vague quote. Send the material, the fill weight, the bag count and the date and you get real numbers back.

The supplier said it was difficult. Is that a no?

Usually yes. A flat refusal is rare enough that the word difficult is carrying it, and pressing will not change the answer. The productive reply is to ask what would have to be true instead.

Is freight included in the quotation?

No. Freight is stated separately or left out, because it depends on a carrier and a destination we have not chosen. Dispatch handling at USD 2.55 per shipment is not freight.

Who pays the bank transfer fees?

Agree it in advance. On an international transfer there are fees at both ends and often an intermediary in the middle, and an invoice that arrives short by the cost of the wire is tedious for everybody to reconcile.

Related reading

• The three weeks when nothing ships in Japan
• What a 500 bag minimum really means
• Sending your material to a Japanese packer
• A packer is not a manufacturer