Oct 23, 2026Buying Guides
Our Payment Terms, and Why We Ask for 30% Up Front
A buyer asked us to confirm 100% LC or 100% DP. We answered 30% deposit, 70% against the bill of lading. Here is where that money goes.
A questionnaire came in last week with a line near the bottom: payment terms are 100% LC at sight or 100% DP at sight, please confirm. We wrote back: 30% deposit, 70% against the bill of lading.
I know how that reads to a buyer who has been burned before. So here is what happens to the money in the four weeks before you see a garment.
The deposit is the fabric bill
We buy your fabric in the first week. Not ours - yours, in your colour, in your weight, often with a minimum the mill will not split. Lining, interlining, buttons, zips, care labels, polybags: all of it is ordered before cutting starts, and all of it is paid for before it ships to us.
Thirty per cent is roughly that bill. It is not a down payment on our profit. It is the material standing on our floor in a colour nobody else will want if you change your mind.
When we will work with an LC
If the order is large enough that the paperwork costs less than the risk, we will work with a letter of credit. We will also tell you when it does not - an LC carries bank charges on both sides, ties up your credit line, and stops dead on a typo. I have seen one held up because an invoice reference had a dash where the certificate had none.
DP is for customers we have shipped to
Documents against payment is cheaper than an LC, and it leaves the risk with us: by the time documents are released, the container is already at sea. We accept DP from buyers we have shipped for a while. On a first order we do not.
What you get for the 70%
Before the balance moves, you get an inspection. Your own inspector, ours, or a third party - the table and the light are the same. We check every order three times: fabric on arrival, mid-production, and final against the pre-production sample you approved. If the final does not match that sample, it does not go in the box.
If a shipment does go wrong after it leaves, we treat the claim as ours first and argue about causes second. That is cheaper for both of us than a lawyer.
The two things that end a negotiation for us
A request to send money to an account in a different company name. And a buyer who refuses any inspection before paying the balance. Both tell us the same thing about the next twelve months.
If your program needs different terms, tell us the structure and we will tell you honestly whether we can carry it. Email info@xcdgarments.com or message us on WhatsApp.
