How do I pay my Chinese Supplier?
Money is easily transferred by your bank to a foreign account, usually this includes some sort of a transaction fee. This applies to any transaction that you will make to your selected Chinese supplier(s). Before you make a transaction to a factory, you should confirm that payment terms are set up with your supplier and that these are mutually beneficial.
What are payment terms? Simply put, it is an agreement between you and the seller that determines how much the seller is paid at which stage of the production. The most common payment terms are 50% before production and 50% before shipping. These terms are very important to Chinese suppliers, and if you negotiate these accordingly, these can be very helpful for you as well. With a strong local team, like with OMiBJ, you can rest assured that favorable payment terms will always be the goal.
How can payment terms help my production?
You may be asking yourself what favorable payment terms could be? Ideally, you would want to have leverage over your supplier. You have leverage by paying less than half of the total production volume before the production starts, e.g. 30% before production and 70 % before shipping. With these terms, you can push the supplier to amend certain potential issues that may arise after your quality inspection. At OMiBJ, we always highly recommend all of our clients to schedule a QC inspection and to review products before shipping accordingly. After a supplier received all payments due, in most cases they will not agree to change or correct goods if these have defects. Even if these are still in the warehouse.
Of course, negotiating with your selected supplier may seem difficult. It can even lead to a lack of trust or to wanting a completely new supplier. At OMiBJ, we make sure that our clients and their suppliers build a healthy and long-lasting business relationship.