How to Pay Chinese Suppliers

How to Pay Chinese Suppliers | Top 8 Ways to Pay

As the world’s manufacturing hub, China continues to attract businesses of all sizes looking to source products and materials. Dealing with Chinese suppliers, however, can sometimes be a daunting task, especially when it comes to making payments. 

In this blog post, we will discuss various payment methods, as well as their pros and cons, to help you choose the best option for your international business transactions. 

By the end of this article, you’ll have a solid understanding of the most popular payment methods and you’ll be able to make informed decisions when dealing with Chinese suppliers.

Deposit & Balance Payments to Pay Your Chinese Suppliers

First and foremost, before diving into the different methods to pay your Chinese suppliers, it’s important to understand how payments are typically divided during the payment process and the amounts that you should be sending:

• The deposit is usually 30% of the total cost. This initial deposit serves as a ‘down payment’ for your order. This amount is to be paid before production commences, ensuring your order is secured and to show that you’re committed to the order.
• The remaining 70% is then paid once the order is complete. After you are satisfied that the supplier has completed your order and fulfilled the agreed-upon quality and product requirements, the remaining balance would then be released to the supplier.

As a result, there are typically two separate payments associated with each order, which can lead to additional fees and charges for your business. It’s important to consider these additional expenses for two separate payments as the fees can add up.

Additionally, it’s common for suppliers to insist on a higher deposit to lower their risk which subsequently then increases yours. However, never pay your Chinese suppliers more than 30% as a deposit or 100% before production! 

By doing so, you would be subjecting yourself to all types of risks as it removes the supplier’s incentive to fulfill quality requirements, meet timelines, or to remake/repair defective items.