The payment term on a jewelry PO is not just a line item. It decides who carries the risk, who pays what fees, and how fast the order moves. T/T (wire transfer) is the default. L/C (letter of credit) is the secure but bureaucratic alternative. For most jewelry orders, T/T is the right choice. For large orders with new suppliers, L/C earns its keep. Here is how the two compare in practice.

T/T: the default

T/T means telegraphic transfer - a wire from your bank to the factory's bank. The standard split is 30% deposit on PO, 70% balance before shipment. T/T is fast (2-3 days for the wire to clear), cheap ($20-$50 in bank fees), and simple. The risk: once you wire the balance, the factory has the money and you have the shipment. If the shipment is wrong, your leverage is gone.

Payment term	Cost	Speed	Risk to buyer
30/70 T/T	$20-$50 wire fee	2-3 days per wire	Medium, balance at risk
50/50 T/T	$20-$50 wire fee	2-3 days per wire	Lower, less balance at risk
L/C at sight	$200-$500 per L/C	1-2 weeks to set up	Low, bank pays on documents
Trade Assurance	2-4% of order value	Held by platform	Low, platform-mediated

L/C: the secure option

A letter of credit is a bank instrument. Your bank promises to pay the factory once the factory presents the shipping documents (bill of lading, invoice, packing list, inspection certificate). The factory ships, hands over the documents, and the bank pays. The risk shifts: the factory is guaranteed payment if they ship the right documents. You are guaranteed the documents before the money moves. It is the most secure structure for large orders with new suppliers.

The L/C catch: document matching

L/Cs are legal instruments. Every document must match the L/C terms exactly. A typo in the port name, a weight on the packing list that differs from the L/C, or a late shipment triggers a discrepancy. The discrepancy means the bank does not pay, and the factory waits. L/Cs require careful documentation and a freight forwarder who knows how to handle them. They are not for a first-time importer who has never used one.

When to use which

First order, under $10,000: T/T 30/70, or Trade Assurance. Simple, cheap, and the risk is manageable.
Repeat order, $10,000-$50,000: T/T 30/70 or 20/80. You know the factory, the risk is low.
Large order, $50,000+: Consider L/C. The security is worth the setup cost.
New supplier, high value: L/C or Trade Assurance. Do not wire $50,000 to a factory you have not worked with.

The middle ground: Trade Assurance

Alibaba Trade Assurance holds your payment and releases it when the order ships to specification. It is not as secure as an L/C, but it is more secure than a straight wire. For orders between $5,000 and $25,000 with a new supplier, Trade Assurance is the practical middle ground. The platform fee is 2-4%, but the dispute protection is worth it on a first order.

The payment history advantage

As you build a payment history with a factory, the terms improve. The first order: 30/70 T/T. The fifth order: 20/80. The tenth order: open account 30 days. Factories extend terms to buyers who have paid on time, because the risk is proven. The payment terms on your PO are not fixed forever. They improve as your record does. Pay on time, and the terms loosen. Pay late, and they tighten back to 100% in advance. The payment history is a negotiation asset.

The discrepancy cost

An L/C discrepancy costs $50-$150 in bank fees, and delays the payment by weeks. The factory then charges you for the delay. Most discrepancies come from small document errors: a misspelled port, a late shipment, a weight that does not match. Use a freight forwarder experienced in L/C shipments, and double-check every document against the L/C terms before presentation. The L/C is a legal instrument. Small errors are expensive. If you have never used an L/C, start with a Trade Assurance order instead.

The open account progression

The end goal of most long-term supplier relationships is open account: the factory ships, invoices you, and you pay in 30 days. This is the most flexible structure for the buyer, but it only comes after a year or more of on-time T/T payments. Do not ask for open account on the first order. Build the track record. Once the factory trusts you, open account is the default, and you stop tying up cash in deposits. The progression is T/T to L/C (for large orders) to open account (for steady buyers).

We accept T/T on standard terms and can structure L/C for large program orders. More on our payment terms is on the logistics page. The payment term matches the risk: first order, protect yourself. Tenth order, the standard split works. Large order, consider the L/C.

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.