China supplier payment terms determine how much financial risk the buyer carries at each stage of an order. The deposit percentage matters, but the conditions attached to each payment matter more.
A 30% deposit followed by a 70% balance is common for manufactured orders. However, a 30/70 arrangement offers limited protection if the buyer releases the remaining 70% as soon as the supplier says production is complete.
Before paying anything, confirm who is receiving the money, what the supplier must deliver and what evidence will be required before the next payment becomes due.
China supplier payment terms should protect both parties
A supplier needs enough commitment to purchase materials, reserve production capacity and begin work. Meanwhile, the buyer needs to avoid paying too much before the goods exist or can be checked.
Good China supplier payment terms should clearly answer:
- How much is paid before production begins?
- What does the deposit cover?
- What must the supplier complete before requesting the balance?
- How will production completion and quality be checked?
- What happens if the order is late, incomplete or defective?
These points should be agreed before the deposit is sent. Once the supplier has your money and production is underway, it becomes harder to negotiate inspection rights, correction requirements or a different payment trigger.
What does a 30/70 payment structure mean?
A 30/70 structure normally means the buyer pays a 30% deposit to begin production and the remaining 70% before shipment.
However, “before shipment” is too vague on its own. It could mean:
- When the supplier says production is complete.
- After the supplier sends photographs or videos.
- After an independent pre-shipment inspection.
- After the supplier corrects material inspection problems.
- After the goods reach a warehouse or freight forwarder.
These payment triggers provide very different levels of protection.
For many manufactured orders, the stronger arrangement is to retain the balance until the finished goods have been inspected and any material problems have been resolved. This keeps the buyer’s main commercial leverage in place while the goods remain at the supplier.
Is 30/70 always the right split?
No. China supplier payment terms are negotiable and should reflect the product, supplier and order risk.
Other structures may include:
- 20% deposit and 80% balance.
- 50% deposit and 50% balance.
- Payment in several production milestones.
- Full payment for samples or small stock orders.
- Payment after delivery for established customers with agreed credit terms.
- Bank-controlled documentary arrangements for larger transactions.
A highly customised product may require a larger deposit because the supplier cannot easily resell the materials or finished goods. Standard products may justify a smaller deposit, particularly when the supplier already holds stock.
Ask what the deposit is intended to fund. A supplier requesting 50% upfront for a standard product should be able to explain why that level of prepayment is required.
Verify the supplier before paying the deposit
Payment terms do not protect you if the money is sent to the wrong business. Before making a transfer, check the supplier’s registered Chinese company details and understand how the payment beneficiary relates to that company.
The English name on a website or quotation may be a translation or trading style. It does not need to match the registered Chinese name word-for-word. Focus on identifying the underlying legal entity and the account owner.
Be cautious when:
- The supplier asks you to pay a personal account.
- The beneficiary is an unrelated company with no clear explanation.
- The bank details change shortly before payment.
- The payment request comes from a new or slightly different email address.
- The account is in a different country from what was previously agreed.
- The salesperson pressures you to pay before answering basic company questions.
A mainland factory may legitimately use a related export company or Hong Kong business to receive international payments. However, the relationship should be explained and documented before funds are transferred.
Prestige Sourcing can review available company, document and payment information through our China supplier verification service.
Put the payment conditions in writing
Do not rely on scattered WeChat messages or verbal promises. The quotation, purchase order, pro forma invoice or supply agreement should clearly record:
- The buyer and supplier entities.
- The product specifications and approved sample.
- Quantity, unit price and total order value.
- Deposit amount and currency.
- The exact event that makes the balance due.
- Production and packaging completion dates.
- Inspection rights and access to the goods.
- Defect standards and correction requirements.
- Trade terms and freight handover point.
- Responsibility for bank charges.
A pro forma invoice may confirm the product and price without adequately covering quality, inspection or corrective work. Important conditions should be added before payment rather than assumed.
If you already have a supplier but need help keeping samples, specifications, orders and payment stages organised, see our China purchasing support service.
When should you pay the remaining 70%?
Do not release the balance merely because the supplier says the goods are ready.
Before paying the remaining 70%, confirm that:
- The full order has been completed.
- The correct quantities, models, colours and sizes were produced.
- The goods meet the agreed specifications.
- Accessories, manuals and required components are included.
- Retail packaging, labels and carton markings are correct.
- The export cartons are suitable for international freight.
- Material defects or inspection failures have been corrected.
- The final packing list and shipment details are available.
Supplier photographs and videos can support the review, but they do not prove that the full order is correct. A supplier can photograph a few good units while defective products remain in other cartons.
Inspect the goods before final payment
A pre-shipment inspection gives the buyer a clearer view of what has actually been produced before the balance is released.
The inspection scope may include quantity, appearance, measurements, basic function, accessories, packaging, labels and carton markings. The checks should be based on the purchase order, approved sample and written specifications.
Read our detailed guide to pre-shipment inspection in China before final payment for what to check and how to respond when problems are found.
Prestige Sourcing can also coordinate practical product checks through our China quality control service.
What if the inspection finds defects?
Do not immediately release the balance because most of the order looks acceptable. First, determine how serious the problems are and whether they affect function, safety, compliance, appearance, packaging or saleability.
The supplier may need to:
- Repair or rework affected products.
- Replace defective units or components.
- Sort the full order for the identified defect.
- Correct labels, barcodes or packaging.
- Repack weak or damaged cartons.
- Provide evidence of completed corrections.
- Accept a reinspection before payment.
A promise to improve the next order does not fix the stock currently sitting at the factory. Likewise, a small discount may not be commercially sensible if the goods will be difficult to sell or create customer claims.
Monitor production between the deposit and balance
There may be several weeks between paying the deposit and the supplier requesting the balance. Do not allow that period to become a communication gap.
Track key milestones such as material preparation, sample approval, production start, packaging, expected completion, inspection and freight handover.
Our China production monitoring service can help follow supplier updates and keep important milestones visible before inspection, balance payment and shipping.
Production monitoring does not replace inspection. A supplier reporting that production is complete does not confirm that the finished goods meet the agreed standard.
Do payment platforms remove the risk?
Marketplace payment systems, cards and escrow-style arrangements may provide dispute procedures or additional transaction records. However, they do not replace supplier verification, clear specifications or product inspection.
Any protection depends on the platform rules, the payment method, the evidence retained and whether the buyer follows the required process and deadlines.
Keep copies of quotations, specifications, supplier messages, inspection reports, payment records and any agreed corrections. For larger or unusual payment structures, seek advice from your bank, trade-finance provider, accountant or lawyer.
China supplier payment red flags
- Pressure to pay before the supplier is checked.
- A demand for 100% upfront payment on a substantial new order.
- Refusal to state when the balance becomes due.
- Refusal to allow a reasonable inspection.
- Unexpected changes to the payment beneficiary.
- A balance request before production is complete.
- Requests to ship before inspection problems are resolved.
- Threats to dispose of the goods immediately during a genuine quality dispute.
Keep payment linked to evidence
The strongest China supplier payment terms connect each payment to a clear and verifiable stage of the order. The goal is not to avoid paying a legitimate supplier. It is to release money when the agreed evidence shows that the supplier has completed its part of the transaction.
Prestige Sourcing can help verify the supplier, coordinate purchasing, monitor production and arrange checks before the final balance is paid.
Need China-side support before paying a supplier? Request a Quote with the supplier details, product, order value and current payment terms.
