Buyer Guide
Payment Terms Guide
T/T, L/C and trade protection for importers.
1. Why it matters
Payment terms decide who carries the risk between deposit and delivery. The wrong structure — 100% up front to a new supplier, or an account name that does not match the license — is how importers lose deposits. The right structure ties money to milestones you can verify.
Tie payment to verifiable milestones and pay only the licensed entity; never send the balance before a passed inspection.
2. Common structures
| Term | How it works | Risk to buyer |
|---|---|---|
| T/T 30/70 | 30% deposit, 70% before shipment | Balance before you inspect — tie 70% to passed QC |
| L/C at sight | Bank pays against compliant documents | Low if docs are specified tightly; bank fees apply |
| 30/70 after inspection | 70% released post third-party report | Lowest; needs supplier agreement |
| OA / net terms | Pay 30-60 days after delivery | Best for buyer; only mature relationships |
3. Protect the deposit
- Pay only to a corporate account whose name matches the business license — never a personal or third-country account.
- Keep the deposit modest (30% is standard) for a new supplier.
- Use a platform trade-assurance escrow where available for the first orders.
- Put the refund condition for a failed inspection in the contract.
4. When to use an L/C
A letter of credit shifts the payment guarantee to banks: the supplier is paid only when they present documents that exactly match the L/C terms (B/L, invoice, packing list, certificates). It costs bank fees and demands precise document wording, so it pays off on larger orders or with an unproven counterparty.
5. Checklist
- Match the beneficiary account name to the business license
- Cap the deposit at ~30% for new suppliers
- Tie the balance to a passed pre-shipment inspection
- Use escrow / trade assurance for first orders
- Specify refund conditions and L/C document wording precisely
6. FAQ
Supplier wants 100% before shipment — safe?
Only with a proven supplier or an L/C. For a new relationship, insist on 30/70 with the balance tied to a passed inspection, or use escrow. 100% prepayment to a new account is the classic loss scenario.
Are net terms realistic for imports?
Rarely at the start. Net 30-60 terms are earned after several clean orders, and often require credit insurance or a long relationship. Expect deposit-based terms until then.