What to Check Before You Pay a Supplier Deposit - FSC CRAFT

Paying a deposit is the point at which a sourcing relationship stops being a conversation. After that, what you have is a contract and the supplier's goodwill. This guide is about making sure you are paying the right supplier for the right reason.

It is not written to distrust suppliers. Most are fine. It is written because the checks that seem excessive before payment are the same checks that are impossible after.

What the deposit is actually for

A deposit covers material procurement and the capacity a factory reserves for you. It is not a trust deposit and it is not a fee. Standard structure is a portion up front and the balance before shipment, on production — we work this way, and it is the most common arrangement in the industry.

Payment terms are agreed per order in writing. If the terms were not agreed in writing before production started, they are not agreed.

The six things to check before you transfer

1. Is the company real and verifiable? Check the business registration, the physical address, and whether the address matches the facility in the photos. A trading company in a trading company's office is fine — just know which one you are dealing with.

2. Can they make your product, not just similar products? Ask to see the specific process: casting, CNC, stamping, sewing, plating. Ask which workshop does it. A supplier who cannot answer that has not thought about your product.

3. Have you approved a physical sample? Not a photo, not a rendering. A physical sample, approved in writing against measurements. This is the single most important item on this list.

4. Is the spec locked in writing? Dimensions, materials, finish method, logo method, packaging. If it exists only in your email thread with an attachment that says "similar to", it is not locked.

5. Is tooling ownership stated? Who makes it, who pays, who owns it, and whether it is available for your reorder. See what moves a quote for how tooling affects your second order.

6. Are the lead time and the milestone dates stated? Not "about 45 days". A schedule with the sampling approval date named, because that is the date that drives everything downstream.

Documentation to have in writing

• A written confirmation of the approved sample, with measurements.
• The production schedule, with milestones.
• The spec sheet, signed off by both sides.
• The payment terms for that specific order.
• The compliance documentation your market needs, requested before production.
• An NDA, if your design is not yet public. IP and tooling belong to you, and we do not resell or reuse client designs.

Warning signs

Some of these are just preferences. Taken together, they mean stop:

• Refusing to video-call the facility or send a current photo.
• Giving a different address on the invoice than on the business registration.
• Insisting you pay a large portion before any sample exists.
• Being vague about which workshop will produce the order.
• Changing the lead time once deposit is discussed.
• No written terms and a strong preference for verbal confirmation.

The last one is the most common, and it is the one that costs the most.

Practical protection

• Pay by a traceable method. A bank transfer to the company's own account, not to a personal account, not to a third party.
• If you use a trade-assurance or escrow arrangement, use it. It costs a small percentage and it is the cheapest insurance in sourcing.
• Keep every quote, spec and schedule. When a dispute arrives in month six, your email thread is the evidence.
• Split the payment so the balance is tied to shipment, not to production starting. That is your leverage at the moment it matters.

FAQ

What deposit should I expect?

A portion up front and the balance before shipment is the common structure, agreed per order. We will state the terms for your order in writing before any payment.

Can I visit before paying?

Yes, and it is the single best check available. Bring your spec sheet and check the actual measurements against it.

What if the product is wrong when it arrives?

Stop paying the balance and refer to the approved sample. The balance held before shipment is your leverage; once it is paid, you are negotiating from a weak position.

Do you offer NDA terms?

Yes, on request. Drawings stay confidential, IP and tooling belong to you, and we do not reuse client designs.

What if I have already paid and it is going wrong?

Document everything, refer to the approved sample and the written spec, and ask for the QC report. The guide to reading a QC report covers what to ask for first.

Next step

Send us your spec sheet and approved-sample status. We will confirm in writing what is being produced before you commit any payment. Contact FSC CRAFT.

Related: What actually moves a supplier quote · How to brief a jewelry manufacturer · OEM vs ODM vs private label

← Stainless Steel vs Brass vs Silver