A deposit is normal in China sourcing — nearly every real factory requires one. The key is knowing the difference between a standard deposit and a scam. Understand why factories need it, and you'll know exactly what payment terms are safe.
Why factories require a deposit
- Materials are paid for upfront. Before production starts, the factory buys your raw materials — steel, fabric, plastic, electronics — and suppliers demand cash. The factory can't fund your materials out of pocket.
- Custom products can't be resold. Once they start making a product with your logo, your spec, your design, it's worthless to anyone else. If you cancel, the factory eats the entire cost. The deposit protects them from that.
- It covers setup costs. Molds, tooling, machine changeover, and line scheduling all happen before the first unit is made.
- It filters serious buyers. A deposit separates people who will actually pay from people who place an order and disappear.
What's a normal deposit?
| Payment term | Verdict |
|---|---|
| 30% deposit, 70% before shipment | ✅ Standard and safe |
| 30% deposit, 70% after inspection / on delivery | ✅ Good (best for you) |
| 50% deposit, 50% before shipment | ⚠️ Higher than normal — negotiate |
| 100% upfront | ❌ Red flag — likely a scam |
How to pay the deposit safely
- Pay a company account, not a personal one. The payment should go to the factory's registered business bank account — never to an individual's personal account or a random third party.
- Get a formal contract or proforma invoice. It must state the product, spec, quantity, price, payment terms, delivery date, and quality standard.
- Verify the company before paying. Check the business license and confirm the account name matches the licensed company name.
- Tie the final payment to inspection. Don't pay the 70% until the goods pass a pre-shipment inspection.
- Keep records. Save the contract, payment proof, and all communication. They're your leverage if anything goes wrong.
How Achen China helps
We make sure your deposit goes to a verified company, for a product with a locked spec and a signed contract. We confirm the business license, check the account details match the licensed company, and tie your final payment to a successful inspection. You never pay blindly. Tell us what you need; we'll handle the payment structure so your money is protected at every step.
FAQ
Is a 30% deposit normal in China?
Yes. 30% deposit before production and 70% before shipment is the industry standard. It covers the factory's upfront material and setup costs.
Why won't the factory start without a deposit?
Because they must buy your raw materials upfront, and custom products can't be resold if you cancel. The deposit is their protection against a buyer who disappears.
Can I negotiate a lower deposit?
Sometimes. Long-term buyers or larger orders can negotiate 20/80 or even payment after inspection. First orders usually stay at 30/70.
What if I pay a deposit and the factory disappears?
Gather all records and report to the local market supervision bureau and your bank. Recovery is difficult, which is why you must verify the company and pay a business account before sending anything.
Want a supplier you can pay safely?
Tell us what you need. We'll verify the supplier and set up payment terms that protect your money.
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