China Sourcing Agents Posted on May 31 • Originally published at china-sourcing-agents.com China Payment Terms: T/T, LC, Escrow # agents # beginners # resources # tutorial Payment terms are where sourcing deals go wrong. Not because of fraud (usually) — but because buyers and factories have opposite incentives, and poorly structured terms leave one side holding all the risk. This guide explains every payment method you'll encounter sourcing electronics from China, and how to structure terms so you're not the one taking all the risk. For a broader view of the full sourcing process , including how to find and qualify suppliers before payment ever comes up, see our sourcing guide. The core tension Factories want money before they spend on materials and labor. Buyers want goods before they pay in full. Neither is wrong — both have legitimate business reasons. The result is a negotiation. Understanding the tools gives you leverage. Telegraphic Transfer (T/T) T/T is a direct bank wire. It's the dominant method for China sourcing because it's fast, cheap, and requires no bank infrastructure beyond a SWIFT-capable account. The standard structure you'll see quoted 30% deposit / 70% before shipment — this is the most common structure for first orders. You pay 30% to confirm the order, factory produces, you pay the balance before they release goods. Why this is the factory's preferred structure: they're covered for materials and most of the labor before you see anything. If you disappear, they have product they can sell elsewhere. If they produce badly, you're still obligated to pay or walk away from your deposit. 50/50 — more common for smaller orders or established relationships. The factory may accept this when they know the buyer, or when the order is small enough that materials cost is under the deposit. 100% upfront — what factories want from unknown buyers. Walk away from this unless you have very strong trust signals about the factory, or you're ordering samples.
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