What term do you negotiate with your manufacturer regarding payment? Mine (several of them) require 30% upfront – which is fine, but they also want the other 70% before the product leaves the factory – and I would like some guarantee it was shipped (to my offices in China) first.
What is the common practice?
your best option is to bring in a third party inspection company to go to the factory. Also, it should be your agent working with you to confirm this and make these suggestions. After all, that the point of using someone on the ground in China, right.
Traditionally, you’ll want to do a 30% deposit to get the production started, and 70% once the goods have been completed. If you can’t trust your supplier to ship your goods once you’ve paid, then you have not done a proper job qualifying them. Only work with suppliers you can trust, and if there is a reason why you can’t trust them, don’t begin with the 30%. This suppliers terms are normal in this industry.
My suggestions however, let them know that you’ll have a third party inspector check the goods once they are complete and prior to paying the final deposit. Your terms should detail your agreement to pay once the goods pass the inspection.
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