Trust · How to
30/70 payment terms explained: deposits, balances, and what “against B/L” means
The standard payment structure of garment sourcing decoded: why factories ask 30% upfront, what the 70% balance is actually released against, the safe and unsafe variants, and how to negotiate terms that protect both sides.
“30% deposit, 70% balance” is the handshake of garment sourcing. The phrase hides the part that matters, though. The deposit is simple; the question that decides your risk is what exactly releases the 70%. Get that wrong and you have paid in full for goods still sitting in someone else’s factory.
Why do garment factories ask for a 30% deposit?
Your deposit buys your fabric. Fabric is 50–70% of a knit garment’s cost, purchased and dyed to your colour weeks before sewing starts, and a roll of your navy has no other customer if you vanish. A 30% deposit roughly covers that exposure, which is why it’s the global norm.
A factory demanding much more is financing itself on your money; one asking nothing has margins you should wonder about.
What should release the 70% balance?
The standard, balanced trigger is a copy of the Bill of Lading: you pay the 70% once the goods are on the vessel. Paying once your own third-party inspector passes the goods at the factory, before shipment, is weaker but workable. Paying “before shipment” on the factory’s word alone, with no trigger, should be avoided.
| Variant | What it means | Verdict |
|---|---|---|
| 70% against B/L copy | You pay when shown the Bill of Lading, goods are on the vessel | The standard. Factory has shipped; you pay before controlling the cargo. Balanced. |
| 70% after inspection, before shipment | You pay once your inspector passes the goods at the factory | Acceptable with a third-party inspection you appointed. Weaker than B/L, workable. |
| 70% “before shipment”, no trigger | You pay on the factory’s word the goods are ready | Avoid. You hold 100% risk with zero proof. Negotiate a trigger. |
Is 30% deposit, 70% before shipment safe?
Only with a trigger you control, such as your own inspector passing the goods. One rule sits above all variants: whoever holds the original B/L controls the cargo. The factory releases it after final payment; you need it to collect your goods. That exchange, money for the document, is the actual settlement of the deal. TT vs LC in full, here.
How can you negotiate payment terms without souring the deal?
On a first order, expect 30/70 against a B/L copy; better terms, such as smaller deposits or part of the balance after arrival, are earned by history on repeat orders. On any order, verify bank details by phone or video before the first wire, and never pay 100% upfront or into a personal account.
- First order: expect 30/70 against B/L copy, asking for better before trust exists is asking the factory to bank you.
- Repeat orders: terms genuinely improve, smaller deposits, or part of the balance after arrival, are earned by history.
- Any order: verify bank details by phone or video before the first wire, and re-verify if they ever “change”. Invoice-redirection fraud is the most common way sourcing money vanishes.
- Never: 100% upfront, payment to a personal account, or an LC document sent as a PDF from the supplier.
Our own terms are exactly what this guide recommends: 30% to begin, 70% against shipping documents, LC welcome on larger orders through our Nepali bank. See how we work at our factory in Nepal, the whole process with real numbers — or start a conversation.
Frequently asked
What does 30/70 payment mean?
What does “70% before shipment” mean, is it safe?
Why do factories need a deposit at all?
When should I use a Letter of Credit instead?
About the author
Santosh Rijal runs Trishakti Apparel, the export knitwear factory his family built on three decades in Nepal’s fashion trade. He writes about sourcing, duty and production from the factory floor in Gaindakot.
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