Standard payment terms are 50% deposit before production and 50% balance before shipment. Repeat customers may qualify for net-30 payment terms once a working relationship is established.
Key facts: payment terms
| Standard terms | 50% deposit before production, 50% balance before shipment |
| Repeat customers | Net-30 may be available on account |
| Methods | Bank transfer, card via Alibaba Trade Assurance, PayPal, Letter of Credit |
| Currency | Agreed with the quotation |
Why the split is 50/50
The deposit funds material and the first production stage. Material is the largest single cost in most custom metal parts, and buying it on the buyer’s behalf before any payment exists is the arrangement that makes small factories fragile — and fragile suppliers become your supply risk. The balance on shipment completes the transaction at the point where the goods are finished and inspected.
That structure also keeps pricing honest. Because the deposit covers material rather than margin, the unit price is a function of the drawing rather than of the payment terms, and there is no introductory markup to recover.
When terms change
Repeat business. Once a working relationship is established, net-30 terms can be discussed. The qualifier is history rather than order size, because the risk being priced is non-payment rather than volume.
Prototypes. A sample order is normally paid in full before production, simply because the amounts are small and the administrative cost of two payments exceeds the benefit.
Larger orders. A Letter of Credit is often the right answer where the value is large enough that its bank charges are small in proportion. It moves the guarantee onto the banks rather than onto either company’s trust.
What to agree before the order
- Currency, confirmed with the quotation rather than assumed at payment
- Incoterms, so it is clear which side carries freight, insurance and import duty
- Inspection point, since the balance falling due on shipment means inspection happens before it leaves
- Bank details verified through a channel you already trust, because amended bank details by email are the standard international payment fraud
Related: payment methods, mass production lead times, and inspection documentation.
Material and test standards referenced are published by ASTM International, and measurement practice follows NIST guidance.
Frequently asked questions
What are your standard payment terms?
Standard terms are 50% deposit before production and 50% balance before shipment. The deposit funds material and the first production stage, and the balance falls due on shipment, after inspection and before departure. The split keeps pricing a function of the drawing rather than the payment terms.
Do you offer credit terms?
Once a working relationship is established, repeat customers may qualify for net-30 terms on account. The qualifier is payment history rather than order size, because the risk being priced is non-payment rather than volume. First orders are normally paid on the standard split, and prototypes are usually paid in full.
What should I agree before placing the order?
Agree four things: the currency with the quotation, the Incoterms so freight, insurance and duty are clear, the inspection point, and bank details verified through a channel you already trust. Amended bank details by email are the standard international payment fraud, so verify any change.