Cash or Check for Pipe Purchases: Handling High-Value Loads

A shipment of large-size seamless pipes is not comparable in value to several shipments of small-size welded pipes. This difference in value makes the decision about the payment method more sensitive for pipes than for many other goods, especially when it involves a bulk purchase.

Why Pipe Size and Type Change Payment Risk

A single small-size welded pipe for household plumbing has relatively low value, and paying cash for it carries little risk. However, a shipment of industrial-size seamless pipes can be worth several times more; paying cash for this volume locks up a large portion of liquidity until the shipment is sold.

The heavier and more industrial the pipe size and type, the more important the decision about the payment method becomes.

Comparing Payment Methods

Practical Solution

• For bulk purchases of large-size or seamless pipes, divide the shipment into several smaller stages if possible.
• Before accepting a high-value term check, examine the counterparty’s credit history more carefully.
• For small and low-value sizes, the market’s usual methods are sufficient and low-risk.

The general rule is always the same: the higher the value of the shipment, the more carefully the payment method should be selected. For pipes, this value can rise very quickly depending on the size and type, so this decision should not be taken lightly.

A Practical Note About a Mixed Order

If the order includes a combination of large and small sizes, you can settle only the high-value portion (industrial sizes and seamless pipes) with greater caution and use the same simple, customary procedure for the smaller sizes; there is no need to treat the entire invoice in the same way.