Every payment term places risk on one side. Neither party should carry all of it, and a supplier who insists on full payment upfront is telling you something — as is a buyer who insists on paying entirely on arrival.
The common structures
- 30 / 70 by bank transfer. Thirty percent to start production, the balance against shipping documents or before dispatch. The workhorse of small and mid-size orders.
- Balance after inspection. The same structure with the final payment conditioned on a passed inspection. Strongly preferable, and worth negotiating for.
- Letter of credit. A bank guarantees payment against documents. Costs more and takes effort; makes sense for large orders or a first transaction with an unknown counterparty.
- Platform escrow. Available on the large marketplaces. Convenient for small orders, with fees and limits.
Two things to check every time
- The account name must match the company on the contract. A request to pay a personal account or an unrelated company name is the single most common fraud pattern in this trade.
- Confirm bank details by a second channel. Email accounts get compromised and invoices get altered. A short call to a known number prevents the expensive version of this story.
Paying reliably and on the agreed date is one of the cheapest forms of leverage available to a small buyer. Suppliers protect customers who do not have to be chased.