What are typical payment terms for Chinese factories?

The standard is a 30% deposit to start production and 70% balance before shipment. For larger orders (over $50K), Letter of Credit (L/C) is available. Many factories also accept Alibaba Trade Assurance for first orders.

How do I pay a Chinese supplier safely?

Pay the company's registered bank account (never a personal or Western Union account), use Trade Assurance or L/C for the first order, and start with a sample or small trial order before committing to a large deposit.

Is Trade Assurance worth it?

Yes for first orders — Trade Assurance holds payment in escrow and refunds if the supplier fails to ship or meet the contract. It adds a small cost but removes most first-order risk.

China Factory Payment Terms: How to Pay Safely

Key takeaways

The standard term is 30% deposit / 70% balance before shipment.
For orders over $50K, a Letter of Credit (L/C) is common.
Trade Assurance escrows your payment — the safest option for a first order.
Never pay a personal or Western Union account; always the company bank account.

The Payment Options, Explained

Method	How it works	Best for
Deposit / balance	30% to start, 70% before ship	Standard orders
L/C (Letter of Credit)	Bank guarantees payment on documents	Orders over $50K
Trade Assurance	Escrow via Alibaba	First-time orders
T/T (wire transfer)	Direct bank transfer	Established relationships

How to Pay Safely on a First Order

Verify the payee — confirm the bank account matches the registered company name.
Start with a sample — check quality before a large deposit.
Use Trade Assurance or L/C — escrow removes most first-order risk.
Keep a paper trail — contract, PI (proforma invoice), and payment confirmation.

Our standard terms are 30% deposit / 70% before shipment, with L/C for $50K+ and Trade Assurance for first orders. See how to avoid sourcing scams.

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