Overseas payment terms are one of the most anxiety-inducing parts of working with a new knitwear manufacturer for the first time. Unlike buying from a domestic supplier where credit cards and trade accounts provide easy recourse, international wire transfers are largely irreversible once sent. Understanding the standard industry payment structures — and what distinguishes a professional factory from a risky one — lets you move forward with confidence rather than either overpaying for unnecessary protection or taking risks you don't need to take.

Knitwear export documentation — Turkey to USA, Kiwi Giyim — Packing and export documentation: commercial invoice, packing list, and certificate of origin prepared for US import

The Three Main Payment Methods

T/T

Telegraphic Transfer (Wire Transfer)

Bank-to-bank wire transfer. The standard method for international apparel orders. Fast, low-cost, and widely accepted — but offers the buyer the least protection once the funds are sent. The industry-standard split for T/T is 30% deposit at order confirmation, 70% balance before shipment (or sometimes against copy of B/L). This structure protects the factory against a buyer who won't pay, while limiting the buyer's deposit exposure.

L/C

Letter of Credit (Documentary Credit)

A bank-guaranteed payment instrument. The buyer's bank issues a letter of credit promising to pay the seller when the seller presents compliant shipping documents (invoice, B/L, packing list). An L/C protects both parties: the factory gets paid as long as the documents are correct, and the buyer gets the documents confirming shipment before the factory is paid. Adds 1–2% cost and requires precise document compliance — but it's the recommended approach for large first orders.

Escrow

Trade Escrow Services

A third party holds the funds until agreed conditions (delivery, quality inspection, etc.) are met. Less common in traditional garment sourcing but available through services like Alibaba Trade Assurance (for verified Alibaba suppliers) or specialist trade finance platforms. Adds cost and complexity, but can bridge the trust gap on a first order with a new supplier.

Open Account

Net-30 / Net-60 (Buyer Pays After Delivery)

The buyer receives goods and pays 30–60 days later. Standard in domestic US trade; extremely rare for a factory extending to a new overseas buyer. Established, high-volume buyers sometimes negotiate net-30 terms after building a track record. Don't expect this on your first order.

What a Standard T/T Structure Looks Like

30% Deposit at Order Confirmation

Paid after the purchase order is signed and approved by both parties. The factory uses this to purchase yarn and materials for your order. For a $15,000 order, this is a $4,500 wire transfer before production begins. Reasonable — the factory has real material costs.

Pre-Production Sample Approval (No Payment)

Before full production, you typically approve a pre-production (PP) sample. No payment at this stage — but don't authorize bulk production without seeing and approving the PP sample first. This is your main quality checkpoint.

70% Balance Before Shipment (or Against B/L Copy)

The remaining 70% is paid either before the factory releases the cargo (most common), or against a copy of the Bill of Lading confirming the cargo has shipped. The latter gives you slight more assurance that the goods are actually on the water — useful for first orders.

Cargo Released and Shipped

Once final payment clears, the factory releases the cargo to the freight forwarder, and the shipment moves to your US port. You receive the original B/L (or telex release) and the supporting customs documents.

When to Use a Letter of Credit

An L/C adds bank-level assurance for both sides. It's worth the extra cost (typically 0.5–2% of the order value) in these situations:

First order with a new factory over ~$25,000–30,000
A large seasonal order where missing the ship date has significant downstream cost
A factory that has been professional during sampling but with whom you haven't established a track record
Orders to regions or suppliers where payment fraud risk is higher (Turkey is generally a low-risk sourcing geography in this regard, but L/Cs are still standard practice for large orders)

An L/C requires both parties' banks to be involved and requires precise document compliance. Discrepancies in the documents (a date that doesn't match, an incorrect description) can delay payment. Ask your trade finance banker for guidance before opening an L/C for the first time.

Red Flags: When to Be Cautious

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100% Upfront Demand

A factory demanding full payment before production begins with no samples, no contract, and no track record is a serious red flag. Industry standard is 30% deposit. Some factories request 50% for first orders — that's acceptable. 100% upfront for a new buyer relationship is not standard.

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Untraceable Payment Methods

Any request to pay via cryptocurrency, informal money transfer (hawala), personal PayPal accounts, or cash should stop the conversation immediately. Legitimate apparel manufacturers accept international bank wire transfers to a registered business account.

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Third-Party Payment Instructions

If the factory asks you to wire money to a company with a different name, or to a bank account in a country different from where the factory operates, verify before sending anything. Payment fraud via spoofed invoice emails ("man in the middle") is a real risk in international trade.

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No Business Registration or VAT Number

A legitimate Turkish manufacturer has a tax identification number (Vergi Kimlik Numarası) and is registered with the Trade Registry (Ticaret Sicili). Asking for these before sending any payment is reasonable and expected — not offensive.

Transparent Payment Terms, Every Order

Our standard payment terms are 30% T/T deposit and 70% balance against copy of B/L. For larger orders, we're comfortable with L/C. We provide full business documentation — tax ID, trade registry, banking details — before any funds are transferred. Let's start with your tech pack.

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