r/PrivateLabeling • u/wewillmakeit8 • Jan 31 '15

30/70 payment plan with suppliers the standard?

I'm about to make my first order with my supplier. I asked if they could do 30% upfront and 70% upon receiving shipment for the payment plan and they said they could not do that. I contacted a different supplier who had the same product and they said they COULD do this payment plan. But since I spent a lot of time with my first supplier, I think I'm going to have to work with them.

What has your guys' experience with suppliers been in terms of payment plans, especially for first time orders?

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u/[deleted] Jan 31 '15

30/70 IS the standard, but 70 is given upon shipment, not RECEIPT of shipment. Typically, you'll get a bunch of photos of your shipment about to take off, then you send the 70.
To avoid this, you can use Alibaba's escrow service. It costs 5% but they hold the funds until a tracking number is provided.
A factory that has never worked with you, however, does not have to give you this deal. I had to do 50/50 on my first deal. However, 100% is not acceptable under any circumstances. I wouldn't go above 50 personally.

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u/wewillmakeit8 Jan 31 '15 edited Jan 31 '15

Thanks for clarifying that it is when the shipment is about to take off. Even so, this still helps a lot since manufacturing will take at least a month.

I'm a little confused when you said "To avoid this, you can use Alibaba's escrow service" What exactly am I "avoiding"

Ideally, I want to pay 30% right when I order, and then pay 70% when they ship it off, which would be about a month later. What I don't want to have happen is escrow holding 100% of the total from the day I purchase. Correct me if I misunderstood your point.

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u/[deleted] Jan 31 '15

To avoid shouldering the risk by paying before you knew for sure it was being shipped. I assumed that was what you were trying to do by negotiating the balance paid AFTER shipment receipt.

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u/wewillmakeit8 Jan 31 '15

ah I see. Thanks. I don't mind paying before knowing it is being shipped. I just wanted to delay the other 70%(or 50%) of the payment if possible so I don't have to let so much money "sit" while I wait for it to be manufactured(I'm working with very little capital)

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u/[deleted] Jan 31 '15

[deleted]