The Ultimate Guide to Chinese Factory Audits for Foreign Buyers

Payment terms follow a standard progression in China. Transaction 1: 30% deposit, 70% before shipment. Transaction 2-3: 30% deposit, 70% against B/L copy. After 1 year: possible 30% deposit, 70% 30 days after B/L date. L/C at sight is standard for large transactions. Never jump ahead in this progression — let the track record justify each step. Trust is earned through consistent performance.

Sample development has three stages with different costs. Stage 1 — existing sample or stock item: free or low cost, typically 1-3 days. Stage 2 — modified sample based on existing design: medium cost, 5-10 days. Stage 3 — fully custom sample: highest cost, 15-30 days. Many buyers skip to Stage 3 when Stage 1 or 2 would suffice. Save your custom development budget for when it truly matters.

Tariff classification (HS code) determines your duty rate. Different suppliers may classify the same product under different HS codes. Always verify the correct HS code and check if your product qualifies for preferential duty rates under trade agreements. An incorrect classification can result in overpayment or customs penalties. Request the supplier's export HS code and compare it with your import country's classification.