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T\/T with a deposit split: the default for most fabric orders<\/h2>\n
Telegraphic transfer is the workhorse of fabric trade because it is fast and cheap on both sides. The typical structure is a deposit of around 30 percent against order confirmation, with the 70 percent balance paid before shipment, often against a copy of the bill of lading for established buyers. The deposit is not a trust exercise; it covers the mill’s committed yarn and loom position, which on custom constructions is real money the mill cannot recover if the order cancels. For buyers the balance timing is the actual control point: pay the balance only after the inspection outcome you agreed in the purchase order exists. If your PO references the 4-point method with an acceptance ceiling, the structure we describe in our 4-point inspection guide<\/a>, then “balance due after inspection report” is a clause you can actually enforce. A mill that resists tying the balance to an inspection record is telling you something about the record.<\/p>\n An irrevocable letter of credit substitutes the issuing bank’s payment promise for the buyer’s, governed in nearly all cases by the ICC’s Uniform Customs and Practice, currently UCP 600, maintained by the International Chamber of Commerce trade finance division<\/a>. The mill gets paid when it presents compliant documents, invoice, packing list, bill of lading, inspection certificate if required; the buyer gets the documents only after payment or acceptance. The protection is real but conditional: L\/C terms punish imprecision, a one-day late shipment or a misspelled consignee can trigger a discrepancy that stalls payment and releases nobody’s risk. Bank charges on both sides plus the amendment cycle make L\/Cs expensive for orders under roughly USD 20,000 to 30,000 in fabric value, which is why most repeat fabric programs above that threshold consider it and most below it do not. If you go the L\/C route, insist the credit names the inspection certificate as a required document and matches your PO’s quality clauses word for word, because the bank checks documents, never fabric.<\/p>\n Trade Assurance and similar escrow services hold payment on a platform until delivery conditions are met, then release it. The useful part is the dispute channel with defined evidence rules, shipping date and documented quality terms, which gives first-time buyers a structured path that bare T\/T does not. The limits matter just as much. Coverage follows what you wrote into the platform order: if the quality clause says nothing about defect limits or shade tolerance, the dispute has nothing to measure against. Escrow also does not replace inspection; it only decides who keeps the money after a disagreement, and a disagreement with a mill you plan to reorder from is expensive in relationship terms even when you win it. Our practice with first-time customers mirrors this: small trial orders through the buyer’s preferred structure, sampling at our standard 7-day cycle, and the quality clauses written identically into the PO and whatever payment vehicle carries the order.<\/p>\n Payment structures fail when they are negotiated separately from production. Three connections matter in fabric specifically. First, sampling: sample fees and courier costs are usually settled before bulk deposit, and a clean written agreement on whether sample fees offset the bulk order removes a common first-order argument. Second, shade and lot risk: if your program reorders across dye lots, the PO should state the shade reference and how deviation is judged, the consistency mechanics are covered in our dye lot consistency guide<\/a>, so a balance dispute has a benchmark instead of opinions. Third, lot acceptance: pair the balance clause with a sampling plan for the shipment, the AQL approach in our AQL sampling guide<\/a>, so partial-acceptance outcomes like credit or replacement are priced before the dispute exists.<\/p>\n The numbers in the table are market conventions, not fixed rules, and every clause is negotiable. What is not negotiable is sequencing: sample approval before deposit, inspection report before balance, documents before final release. Mills with real production control, ours included, accept that sequencing readily because the records exist; we have run ready-stock programs exceeding 100 million meters and custom development from our Wenzhou site since 1995, and both structures live or die on documented handoffs. If your program is at the negotiation stage, our custom manufacturing service page<\/a> lays out the order structure from first swatch to bulk, and a quote request<\/a> will return the terms in writing against your actual quantities.<\/p>\n What deposit split is normal for fabric orders from Chinese mills?<\/strong> When is a letter of credit worth it for fabric?<\/strong> Does Trade Assurance replace quality inspection?<\/strong> When should the balance be paid?<\/strong>Letter of credit: when the bank fee earns its place<\/h2>\n
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Platform escrow: what Trade Assurance actually covers<\/h2>\n
How terms should connect to production reality<\/h2>\n
Which structure for which order<\/h2>\n
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\n \nOrder situation<\/th>\n Typical structure<\/th>\n Why<\/th>\n<\/tr>\n<\/thead>\n \n First trial order under 3,000 meters<\/td>\n Platform escrow or 30\/70 T\/T<\/td>\n Small values do not absorb L\/C costs; escrow adds evidence rules for strangers<\/td>\n<\/tr>\n \n Repeat program, established relationship<\/td>\n 30 percent deposit, balance against B\/L copy<\/td>\n Trust is already priced in; document handoff carries the risk<\/td>\n<\/tr>\n \n New relationship above USD 30,000<\/td>\n Irrevocable L\/C at sight, inspection certificate required<\/td>\n Bank obligation replaces counterparty trust at a cost of roughly 1-3 percent<\/td>\n<\/tr>\n \n Custom construction, 1,000-meter MOQ development<\/td>\n T\/T with deposit against confirmed counter-sample<\/td>\n Committed yarn position makes deposit legitimate; counter-sample approval gates production<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n Frequently asked questions<\/h2>\n
Around 30 percent deposit with 70 percent balance before shipment is the common convention, with the balance frequently released against a bill of lading copy once a relationship is established.<\/p>\n
Generally for first-time counterparties and order values above roughly USD 20,000-30,000, where bank charges are small relative to the exposure and the credit names an inspection certificate as a required document.<\/p>\n
No. Escrow decides who keeps the money after a dispute based on what the order says; if defect limits and shade tolerance are not written in, there is nothing to measure against.<\/p>\n
After the agreed inspection outcome exists, typically a 4-point or AQL-based report on the packed lot, never on the mill’s word alone.<\/p>\n<\/div>\n