You found a supplier. You negotiated the price. Now they want money. Before you wire anything, know this: how you pay matters more than how much you pay.
The Standard: 30/70 T/T
T/T stands for Telegraphic Transfer — a bank wire. The industry standard for first orders: 30% deposit when you place the order, 70% balance before the goods leave the factory.
The 30% covers materials and production startup. If you cancel, the factory keeps the deposit to cover their costs. Fair.
The 70% is due before shipment — and you should never pay it without inspecting the goods first. Photos aren’t enough. Video calls aren’t enough. Someone needs to be on the production floor checking your order before you release the balance. Here’s what to check →
What’s Negotiable
The deposit percentage. 30% is standard. Some factories ask for 50%. Push back. A factory that demands 50% upfront is either cash-strapped or doesn’t trust you. Neither is a good sign. Offer 30%. If they insist on 50%, ask why. If the answer is vague, find another supplier.
The balance timing. Standard is “before shipment.” Better is “after inspection, before shipment.” The best you can get as a new buyer is “30% deposit, 70% after QC approval, before loading.” If you have a sourcing agent on the ground, this is achievable. How a sourcing agent changes the negotiation →
The payment method. T/T is standard. Some factories offer L/C (Letter of Credit) for large orders. L/Cs add bank fees but protect both sides. Only worth it for orders above $50,000.
Red Flags — When to Walk Away
“100% upfront.” No. Unless this is your third order with a factory you trust, never pay everything upfront. You have zero leverage once the money leaves your account.
“Wire to this personal account.” The factory’s bank account should match the company name on the PI and the business license. A personal account means either they’re dodging taxes or they’re not a real company. Either way — walk.
“Alibaba Trade Assurance is enough.” Trade Assurance covers you if goods don’t ship on time or don’t match the contract. It doesn’t cover subjective quality issues. “The fabric feels different” won’t get your money back. Trade Assurance is a safety net with holes in it. Don’t rely on it alone.
“WeChat Pay or Alipay.” These are consumer payment tools. No paper trail. No buyer protection for B2B. If a supplier asks for WeChat Pay for a $10,000 order, they’re treating your order like a personal transfer. Red flag.
What a Real Factory Asks For vs What a Trading Company Asks For
A real factory wants: 30% T/T to the company account, PI with company chop, balance before shipment.
A trading company wants: higher deposit (why? they need to pay the real factory), payment to a different account than the company name on the PI, Trade Assurance instead of a proper contract.
How to tell the difference before you pay →
Before You Send the Deposit
Get the PI. Check the company name on the PI matches the business license. Check the bank account name matches both. Add a line to the PI: “Balance payable after third-party QC inspection with AQL 2.5.” If they push back on that line, ask yourself why.
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