Sending money to a 1688 factory is the riskiest moment of any import. The goods have not moved. Your money already has. How you structure the payment terms determines how much leverage you actually hold until the right goods land in your hands.
Common deposit structures on 1688
There is no single standard. Each factory sets terms based on habit and how much they trust a buyer. But a few patterns come up most often.
- 30/70: Pay 30% upfront, the remaining 70% once production is complete and verified before or upon shipment. This is the most balanced arrangement for both sides and the most reasonable starting point for a new buyer to propose.
- 50/50: Half up front, half on delivery. Factories often push this when the order value is large or when they need working capital to buy materials. Not inherently bad, but you need the second 50% anchored to a specific, verifiable milestone, not just "when I say the goods are ready."
- 100% upfront: The factory wants full payment before production or packing starts. This exists and is not automatically a red flag for in-stock commodity goods. For OEM or custom orders, paying 100% upfront means surrendering all leverage before you have seen anything.
- Full payment on receipt: Rare with new buyers on 1688. This arrangement usually requires years of history or a platform escrow mechanism. Do not expect it on a first order.
There is also a trade-assurance model through Alipay or the 1688 platform, where funds sit in escrow and are released on confirmed delivery. This is meaningfully safer than a direct wire transfer, but not every factory participates and order values are sometimes capped.
What deposit level is actually safe
No absolute number covers every case, but there is a useful starting range.
With a factory you have never used before, keep the upfront share at the lowest amount they will accept, and generally try not to exceed 30 to 40 percent of the order value. You have no real data on this supplier yet. Their 1688 profile, reviews, and photos can all be curated. The unpaid portion is what keeps the factory motivated to produce correctly and ship on time.
With a factory you have ordered from several times, you can afford to be more flexible. They know you, you know them. Agreeing to a 50/50 split or even more upfront in exchange for faster production priority makes sense.
For high-value orders (say, anything where the deposit amount alone exceeds what you could absorb as a loss), both the deposit mechanics and the verification requirements for the balance deserve more attention, not less.
When to release the balance
The deposit is one question. The condition for releasing the remainder is equally important and far more often left vague. Vague conditions mean you lose leverage at the worst moment.
Three ways to anchor the final payment:
- Before shipment (pre-shipment): The factory requests full payment once goods are packed, before they leave the factory. If you have someone in China doing a pre-shipment inspection, this is workable. If not, you are paying based on photos the factory sends you.
- On arrival at the consolidation warehouse: You pay the balance once goods reach the consolidation warehouse and the warehouse confirms the count. Better, because the consolidation warehouse is a third party with no reason to cover for the factory. This needs to be written into the agreement explicitly: warehouse confirmation of quantity triggers payment, not just "goods at warehouse."
- After receipt in Vietnam and QC: Maximum leverage for the buyer, but factories rarely agree to this with new customers. More realistic once you have history and repeat orders with them.
For a first engagement with a new factory, the most practical arrangement is usually: 30% upfront, 70% after the consolidation warehouse confirms count and shares packing photos. You are not fully protected, but you have enough leverage that the factory cannot afford to be careless.
Keeping leverage until goods are confirmed
Leverage in a payment negotiation is the portion you have not yet paid. Once the full amount is transferred, the factory has no particular incentive to resolve your complaints quickly. This is the principle to keep in mind.
Do not release the balance before you have clear confirmation. Clear confirmation is not a nice photo the factory sends you. It means: correct quantity (counted or confirmed by the warehouse), quality consistent with the approved sample, and packing matching your requirements. If you have no one in China to inspect, the consolidation warehouse is the first practical checkpoint and a reasonable point to trigger payment.
Do not rush to pay just because the factory is chasing you. Factories pressing for payment is normal. But their urgency is not a reason to skip verification. If the goods are genuinely as agreed, there is no reason a factory cannot give you one more day for the warehouse to confirm.
Negotiate terms before the order, not after goods are packed. Once production is done and goods are ready, your negotiating position is weaker because the factory knows you do not want that shipment sitting idle. Terms should be clear at the time of ordering: what percentage upfront, when the balance is due, who confirms the trigger condition, and which payment channel.
Put agreements in writing
The 1688 platform has an order system and an internal chat. Agreements confirmed there are better than anything done over WeChat because they are timestamped and traceable.
Once you and the factory have settled on terms, summarize them in the 1688 chat before confirming the order: "We have agreed: 30% deposit, balance paid after the consolidation warehouse confirms count and sends packing photos. Is that correct?" Wait for explicit confirmation. This is not a legal contract. It is practical evidence if something goes wrong later.
If you pay through 1688 Trade Assurance, the platform holds funds in escrow and releases them based on the conditions set in the order. This is substantially safer than a direct transfer. The limitation is that not all factories use it, and some routes have order-value caps.
When the factory will not accept your proposed terms
Sometimes a factory only accepts a higher upfront share, especially with new buyers placing small orders. That does not automatically mean walking away, but there are ways to reduce risk if the deposit terms are unfavorable.
- Size down the first order. If the factory insists on 70% upfront, you can reduce the order quantity so that the total deposit amount stays within what you could absorb as a loss if something went wrong. The goal of a first order is to verify the supplier, not to optimize wholesale pricing.
- Use an order agent with quality guarantees. Some reputable order-agent services take responsibility for quality and production timelines. Their fee adds a few percent to landed cost, but it adds a layer of protection between you and a factory you have never dealt with.
- Request a sample before committing to volume. If the factory will not budge on payment terms but is willing to send a sample at a fair price, that is still a way to reduce risk before you commit to a full run.
No payment structure is perfect with a new supplier. The core principle holds regardless: unpaid money is leverage, and you should not give it up before you have clear confirmation of the goods.
Bottom line
Deposit terms are not administrative overhead. They are how you distribute risk in a cross-border transaction with limited formal protection. With a new factory, keep the upfront share low, tie the balance to a specific verifiable milestone, and confirm the arrangement in writing before you place the order. When goods arrive correct and on spec, everything moves on smoothly. When something goes wrong, the unpaid portion is the only thing that brings a factory back to the table.