How the deposit and balance are normally split, what each tranche should be tied to, which payment routes suit which order size, and who the payee has to be.
The split matters more than the method
A deposit before production with the balance before shipment is the ordinary arrangement, and thirty per cent against seventy is the shape most factories expect. What varies, and what actually protects you, is the event each tranche is released against. A deposit buys production capacity and material; a balance should buy goods you have reason to believe are acceptable.
- Deposit before production, balance before shipment, is the normal shape
- Write what each tranche is released against, not only when
- Expect a first order to carry less favourable terms than a fifth one
Tie the balance to a result, not to a calendar date
The single change that does most for a first order is making the balance payable against an accepted pre-shipment inspection result rather than against a stated ship date. It costs nothing to write and it turns the inspection report from a document into leverage. Without that link, a report showing defects arrives after the money has already moved.
- Balance released on a written acceptance of the inspection result
- The lot ships on your written authorisation, not on the factory's schedule
- Name the inspection standard and acceptance numbers in the order itself
Which route suits which order size
Bank transfer is the ordinary rail for goods payments and gives the factory a clean record against its export paperwork, but it offers no recourse once sent. A marketplace escrow arrangement holds the money until the buyer confirms receipt, at the cost of keeping the transaction on that platform. For large orders a documentary credit shifts the assurance to the banks, under rules the International Chamber of Commerce publishes.
- Bank transfer: standard for goods, fast, no recourse once sent
- Marketplace escrow: money held until confirmation, transaction stays on-platform
- Documentary credit: worth the paperwork only when the order is large enough
Who the payee has to be
The account you pay should belong to the entity named on the contract and on the business licence, and a mismatch is worth stopping for even when the explanation sounds reasonable. Requests to pay a personal account, a Hong Kong intermediary or a newly changed account number are the point at which a first order most often goes wrong.
- Payee name matches the contracting entity and the licence
- Confirm any changed bank details by voice on a number you already had
- Treat a personal account request as a reason to pause, not a formality
What our own fee has to do with this
You pay the factory directly for the goods. We hold none of your order money, act as nobody's escrow and never receive the goods payment, which is why the factory's price and our fee stay two numbers you can each check on their own. Our own fee follows the same rule we recommend here: half at the start of a full engagement, half when the inspection report is delivered and accepted.
- We never hold, receive or route your goods payment
- The factory's price and our fee stay separately visible
- Our own balance releases against a delivered report, not against a date
Before the first payment leaves
Most of the protection available on a first order is bought before the money moves and cannot be bought afterwards. None of it is expensive, and all of it is the sort of thing that feels unnecessary until the first time it is not.
- Confirm the entity, the licence and the payee in one step
- Seal and date a reference sample both sides accept
- Write the inspection standard, the acceptance numbers and the balance trigger into the order
Authoritative references
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