Paying a new overseas factory safely: TT vs Letter of Credit

The hardest moment in a first order isn’t choosing a factory — it’s sending the money. Do it wrong and you’re exposed; do it right and both sides are protected. Here’s how experienced importers pay a new supplier safely.

TT (bank transfer) vs LC (Letter of Credit)

A TT (telegraphic transfer / wire) is fast, cheap, and simple — but on its own it puts the risk on whoever pays first. A Letter of Credit is a bank’s guarantee: the factory only gets paid when it presents documents proving it shipped exactly what was agreed. An LC costs more and involves bank paperwork, but for a large or first order it protects both parties — the buyer knows payment releases only against proof of shipment, and the factory knows the funds are committed.

The standard, safe structure

For TT orders, the norm is a deposit up front with the balance paid against shipping documents (or after inspection), so your final payment tracks real, verifiable progress rather than a promise. Never agree to 100% upfront to a new supplier. Tie milestones to things you can verify: an approved sample before bulk, an inspection before the balance, documents before release.

How we structure it

We work on fair, staged terms and accept Letters of Credit for larger orders, with balances structured against inspection and shipping documents. And nothing reaches bulk until you’ve signed off a pre-production sample — so you’re never paying blind. It’s deliberately built so your money follows real progress.

Red flags — walk away if you see these

• A demand for 100% payment before production, from a supplier you don’t know.
• Payment to a personal account rather than the registered company.
• No willingness to provide a sample, a video walkthrough, or references.
• Pressure to skip inspection or rush the wire.

Safe payment is really about verifiable milestones and a supplier with nothing to hide. That’s exactly how we like to work. More on how we earn buyer trust, or ask us about terms for your order.