Deposit and Payment Terms When Sourcing Pet Products from Vietnam
How much deposit is normal, when T/T makes sense versus an LC, and the payment-request patterns that should slow a buyer down before wiring anything.
By WINVN · · 3 min read
The payment structure on a purchase order gets less attention than unit price and MOQ, right up until a buyer is asked for terms that don't match what's normal for the transaction size — and has no reference point to know whether that's a red flag or standard practice.
What's typical for a first order
A 30% deposit on order confirmation, 70% balance before shipment or against shipping documents is the most common structure for a first production order between a new buyer and supplier, paid by T/T (telegraphic wire transfer). This isn't a rule, but it's common enough that terms well outside it deserve a direct question, not an assumption.
Letters of Credit (LC) shift more risk onto the bank rather than either party directly — the supplier gets paid once they present documents proving shipment matches the LC's terms, and the buyer's bank verifies compliance before releasing funds. LCs cost more in bank fees and take longer to set up, which is why they're used more on larger orders or with a new, unproven counterparty than on a small pilot batch.
Escrow or trade assurance services offered through B2B platforms (Alibaba Trade Assurance and similar) hold payment until the buyer confirms receipt matches the order — useful specifically for a first, smaller order with an unverified supplier, less commonly used once a relationship has a track record because the fees stack up on repeat orders.
Payment-request patterns worth slowing down for
A deposit request significantly above 30–50% before any sample has been approved. Reasonable for large custom tooling investments the supplier has to commit to genuinely, but worth a direct question about what specifically the higher deposit covers.
A request to pay to a personal account rather than a registered company account. A legitimate manufacturer invoices from and receives payment into its business's own account — not an individual's name, and not a different company name than the one on your contract.
Pressure to skip a sample and pay full production deposit immediately, especially paired with urgency language about a limited-time price. This combination — skip verification, act now — is the pattern worth being most cautious about, regardless of how the rest of the conversation has gone.
A bank account in a different country than the manufacturer's stated location, without a clear, verifiable explanation (a related trading entity, for instance, that you can independently confirm).
Structuring your own protection into the terms
Tie deposit release milestones to something you can verify — sample approval, a pre-shipment inspection report, a specific production stage — rather than paying the full deposit purely on a confirmed order. For a first order with a new supplier, consider a smaller pilot order at standard terms before negotiating volume pricing that assumes a larger, less-flexible payment structure.
How this connects to verifying the supplier
Payment terms are a second layer of protection, not a substitute for confirming the company itself is legitimate before you get to a payment conversation at all. Do both, in that order.
Where to start
If you're structuring a first order and want to discuss a milestone-based payment plan tied to sample approval and pre-shipment inspection, request a quote and tell us your target order size — we'll propose terms that scale with how much trust the relationship has actually earned so far.
