How to make payments
There are a number of different payment methods that
can be used when you deal with us. Three mostly used
are T/T payment in advance, D/P and L/C.
4.1 T/T payment in advance
4.2 Letter of credit
4.3 D/P (document against payment)
4.1. T/T payment in advance
T/T means telegraphic transfer, or simply wire transfer.
It's the simplest and easiest payment method to use.
T/T payment in advance is usually used when the sample
and small quantity shipments are transported by air.
The reason why is that the documents like air waybill,
commercial invoice and packing list will be sent to
you along with the shipment by the same plane. As soon
as the shipment arrives, you can clear the customs and
pick up the goods with the documents. As it's acknowledged,
T/T payment in advance presents risk to the importer
if the supplier is not an honest one.
For us, T/T advance payment is required for some high-value
samples (see our samples ordering policy) and small
quantity order shipped by air.
To the customers who have long-standing business relationships
with us, we send free samples; and for the small quantity
order, document against payment is used.
It takes 3-4 days for us to received the wire transfer
made from anywhere in the world.
4. 2. Letter of credit
An irrevocable Letter of Credit is also an often used
payment method. It is often referred to an L/C. Letters
of Credit are formal payment methods that offer a lot
of protection to the parties.
Simply put, a letter of credit is a letter written by
the importer's bank to the exporter. It verifies that
the payment will be guaranteed when the bank is presented
with the concrete documents (bill of lading, and freight
documents). Most letters of credit are "irrevocable"
once the importer has had them sent.
A letter of credit usually includes applicant (you,
the importer), beneficiary (our I/E agent), opening
bank, negotiating bank, specification and quantity of
the goods, amount of money, loading port and destination
port, shipment date, the validity date of the L/C, terms
and conditions agreed by both the importer and seller,
and the documents required by the importers (bill of
lading, commercial invoice, packing list, insurance
The L/C payment procedure is usually as follows:
a. You (the importer) applies to open the L/C to us
(the seller) through a bank who can open the L/C in
b. The opening bank will inform The Bank of China that
the L/C has been opened.
c. The Bank of China will inform us that the L/C has
d. We'll check all the terms and conditions listed in
the L/C. If all terms and conditions are acceptable,
we'll arrange the shipment within the time specified
in the L/C.
e. After the goods are loaded onto the ship without
any damage, the captain will issue the clean bill of
lading to us.
f. We will submit the clean bill of lading and other
relevant documents to The Bank of China to gather the
payment. Only with clean bill of lading can you claim
the ownership of the goods.
g. The Bank of China will send the clean bill of lading
and relevant documents to your bank (the opening bank).
h. The opening bank will inform you that all documents
i. You will go to the bank to make the payment to get
the clean bill of lading and relevan documents.
j. With all of these documents, you can clear the import
Customs and pick up the goods after the goods arrive
on the destination sea port.
L/C is used for the larger quantity order shipped by
The typical L/C scenario takes 14-21 days to complete.
4.3. D/P (document against
The exporter (we) makes shipment and sends the shipping
documents to the exporter's bank (the Bank of China)
for collection. The Bank of China then sends the shipping
documents along with a collection letter to the importer's
bank, who then sends a collection notice to the importer.
The importer makes payment upon receiving the notice,
and only after payment does the importer receive the
original shipping documents with which you take the
physical possession of the goods.
The major advantage of the use of a cash against documents
payment is the low cost, versus using a letter of credit.
But, this is offset by the risk that the importer will
for some reason reject the documents (or they will not
be in order). Since the cargo would already be loaded
(to generate the documents), we have little recourse
against the importer in cases of non-payment. So, a
payment against documents arrangement involves a high
level of trust between the exporter and the importer.
To our customers who have long-standing relationships
with us, for larger quantity order shipped by sea, we
usually make the payment arrangement as 50% made via
T/T advance payment and 50% made via D/P to expedite
the whole transaction process.
There is no payment method that is perfectly safe to
both the importer and supplier at the same time. But,
we still have got to do business, right? So, we hold
it's crucial to develop a long-term relationship with
our customers based on mutual trust.