Payment & Returns
Jewelry Supplier Payment Terms: Deposits, Credit and Risk
How payment terms evolve from first order to established account, what each instrument costs, how to earn credit terms, and how to structure deposits so that a problem shipment does not become a total loss.
Payment terms are working capital. Moving from 100% upfront to 30/70 changes how much stock you can carry for the same cash. Moving to 30-day terms after shipment changes it again. This guide covers what is realistic at each stage of a supplier relationship and how to get there without taking on unacceptable risk.
Payment instruments compared
| Instrument | Typical terms | Cost to buyer | Protection | Best for |
|---|---|---|---|---|
| T/T bank transfer | 30% deposit, 70% before shipment | Bank fees, typically 20 to 50 USD | Low; you rely on the contract | Established relationships |
| PayPal | 100% upfront | 3% to 4% transaction fee | High, with a buyer protection window | Trials under about 1,500 USD |
| Credit card | 100% upfront | 2% to 3% plus FX | High, with chargeback rights | Small orders and fast disputes |
| Platform escrow | Escrowed, released on confirmation | Small percentage | High, with platform mediation | First orders with new suppliers |
| Letter of credit | At sight, or 30 to 60 days | 0.5% to 1.5% of value plus bank charges | High, on documentary compliance | Orders above about 50,000 USD |
| Open account | 30 to 60 days after shipment | None | Low; pure trust | Established accounts after three or more shipments |
| Documentary collection | Documents released on payment | Moderate bank charges | Medium | Mid-size orders with a new supplier |
The realistic progression
| Relationship stage | What you can reasonably ask for | What the supplier will agree to |
|---|---|---|
| First order, unknown to each other | Escrow or a small paid trial | 100% upfront, or 30/70 with escrow |
| Second order, first paid on time | 30/70 T/T | 30/70, which is the industry default |
| Third to fifth order, clean history | 40/60, or 30/70 with a longer production window | Usually agreed; it costs the supplier little |
| Six to twelve months, consistent volume | 30-day terms on a portion of the order | Sometimes, on a bonded or guaranteed basis |
| Twelve months and a forecast | 30 to 60 day open account, or credit insurance | Yes, if volume justifies it and risk is insured |
The leverage that earns credit terms is not negotiation skill. It is a documented history of on-time payment and a forecast the supplier can plan against. If you want terms, give them a written annual volume forecast.
Structuring a deposit to limit exposure
- Never exceed the value you can absorb. A 30% deposit on a 30,000 USD order is 9,000 USD at risk before you have seen anything. That is normally acceptable. Seventy percent upfront is not.
- Tie the balance to inspection. Balance payable on receipt of pre-shipment photographs and QC report is a standard and reasonable clause.
- Split large orders. Two shipments of 15,000 USD with separate deposits reduces the single-point exposure and improves cash flow.
- Use escrow for the first order only. After one clean shipment, escrow fees are no longer buying you anything.
- Get deposit refundability in writing. What happens if the factory cannot deliver? A written cancellation and refund clause is normal. A supplier who refuses one is telling you something.
What each term costs you, in cash
| Term | Cash tied up on a 20,000 USD order | Effective annual cost at 10% borrowing |
|---|---|---|
| 100% upfront, 30-day production | 20,000 USD for 30 days | About 167 USD |
| 30/70, 30-day production | 6,000 USD for 30 days | About 50 USD |
| 30/70, 45-day production plus 10-day transit | 6,000 USD for 55 days | About 92 USD |
| Open account, 30 days after shipment | Nothing for 40 days | Zero, and you sell part of the stock first |
On a 20,000 USD order the difference between 100% upfront and 30/70 is roughly 117 USD of financing cost, which is modest. The real difference is risk. With 30/70, a failed shipment costs you 6,000 USD, not 20,000 USD.
The clauses to insist on in writing
- Deposit percentage, balance trigger and payment method, with bank details verified through a second channel.
- Production lead time in working days, measured from deposit receipt and approval sheet signature.
- Inspection rights before shipment, including the right to appoint a third-party inspector at your cost.
- Quality guarantee with a claim window, where 14 days from delivery is standard, and defined remedies: remake, credit or refund.
- Cancellation and refund terms if the delivery window is missed by more than a stated number of days.
- Currency and metal price validity window, especially on gold orders.
Red flags in payment discussions
| Request | Concern |
|---|---|
| Payment to a personal account or a third-party company name | No enforceable contract; likely a trading intermediary |
| Insistence on 100% upfront for a first order | Refusing to share any risk |
| No written contract or proforma invoice | Nothing to enforce if the shipment is wrong |
| Bank details changed by email mid-order | Classic fraud vector; always verify through a second channel |
| Pressure to pay before the approval sheet is signed | Removes your only specification reference |
One habit prevents most payment disasters: verify bank details by voice or video with a person you have already dealt with, every time they change. Invoice fraud in the jewellery trade almost always arrives as an email that looks exactly like the real thing.
Related Articles
- How to Buy Lab Grown Diamonds Wholesale: A 2025 Importer’s Guide
- Wedding Ring Wholesale Buying Guide for Retailers and Brands
Authoritative References
For buyers who need to verify the technical and regulatory basis of this guide, the following independent institutions publish authoritative reference data:
- eCFR Title 19 - U.S. Customs regulations for tariff classification and import documentation.
- European Commission - EU customs, tariffs and trade compliance resources.
