The typical payment structure
Most China sourcing deals use a two-part structure: a deposit to start production, and the balance before (or after) shipment.
- Deposit: typically 30% on order confirmation
- Balance: typically 70% before shipment — ideally after a pre-shipment inspection passes
Payment methods
- T/T (bank transfer): the standard; low cost, but no buyer protection if things go wrong
- Letter of credit (L/C): strong protection for larger orders, more paperwork and bank fees
- Escrow / platform payments: useful for first orders with new suppliers
How to protect yourself
- Never pay 100% in advance — the deposit is your leverage
- Tie the balance payment to an inspection result you control
- Pay the balance only for the quantity and quality you accept
- Keep every term in the written order — payment structure included
The payment structure is your main leverage point in the whole deal. Design it before you sign, not after a problem appears.
See also: Quality control in China and negotiating with Chinese suppliers.