How To Pay Your Overseas Product Supplier

Overseas product manufacturing contracts

In its post, Paying your Overseas Product Supplier – Know your payment terms and options in advance, SourceJuice [link no longer exists] does a yeoman-like job setting out the various options for paying an overseas product supplier. The post explains the following options, and describes the risks of each:

  • Advance, Cash in Advance or Cash Advance – these are known as payment in advance terms
  • Telegraphic Transfer, Telex Transfer, Bank Wire Transfers – these are known as T/T or TT payment terms
  • Wire and Funds Transfer Services like Western Union and Money Gram
  • Internet payment companies like PayPal.com, Moneybookers.com, and Escrow.com
  • Letter of Credit and the various options that banks offer on these instruments – these are known as LCs, L/C, or LC payment terms
  • Documentary Collections like Documents Against Acceptance or Documents Against Payment – these are known as DA or DP payment terms and sometimes referred to as
  • “Bills of Collection” or “Bills of Exchange
  • Open Account or Pay Post Receipt or Goods in Advance – When the Seller provides you Credit

The one thing I would add to it is the advice to have a written contract with your overseas supplier. In many cases, such a contract is necessary for you to be able to pursue a refund for bad product.

6 responses to “How To Pay Your Overseas Product Supplier”

  1. Sir,
    I ordered some items for about US$ 15,000.00 from China 20 days back, supplier sent me proforma invoice and asked me to pay 30% (US$ 4500) in advance. That I paid. Today I received a mail with picture of our ordered products in their factory for balance 70% payment as follows:
    Your products will be finished this weekend. Attached are some pictures of the goods and PI. Pls pay us the balance so that we can load into the container early next week.
    Thanks and regards.
    My questions are:
    Shall I pay balance amount of US$ 10,500.00?
    On which base I can pay?
    Which documents I have to ask for payment?
    Which is the safest way for payment?
    Please advice.
    Thanks,

  2. Sir,
    I ordered some items for about US$ 15,000.00 from China 20 days back, supplier sent me proforma invoice and asked me to pay 30% (US$ 4500) in advance. That I paid. Today I received a mail with picture of our ordered products in their factory for balance 70% payment as follows:
    Your products will be finished this weekend. Attached are some pictures of the goods and PI. Pls pay us the balance so that we can load into the container early next week.
    Thanks and regards.
    My questions are:
    Shall I pay balance amount of US$ 10,500.00?
    On which base I can pay?
    Which documents I have to ask for payment?
    Which is the safest way for payment?
    Please advice.
    Thanks,

  3. It depends on the contract agreement signed with your supplier. and I always recommand to have SGS or TVU for quality and quantity inspection
    Good luck

  4. It depends on the contract agreement signed with your supplier. and I always recommand to have SGS or TVU for quality and quantity inspection
    Good luck

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