Negotiation
The ten minutes after a supplier quotes a price decide more about your margin than the two hours before it. What follows is the short list of things that have to be written down before you get on the plane.
Contents
"Our MOQ is 500" sounds like one number. It is usually three, and the difference decides whether a trial order is possible.
There is also the gap between a sample MOQ and a production MOQ. Many factories will run 50 or 100 pieces as a trial at a higher unit price, on the understanding that the next order is larger. That is a real option and it is rarely offered unless asked.
The question that unlocks it: "What is the smallest order you would run at a price that still works for you, and what would the next order have to be?" Suppliers answer that question honestly, because it is about their production planning rather than about your budget.
A quotation of 2.40 per unit means nothing without the quantity attached. Most consumer goods carry four to six price tiers between trial volume and container volume, and the curve is steepest at the bottom: the step from 100 to 500 units is usually larger than the step from 5,000 to 20,000.
Ask for the ladder in writing, with the break points. Then compare suppliers on the same break point rather than on the number they chose to quote. A supplier quoting the 5,000-piece price against a competitor's 500-piece price is not cheaper; they are answering a different question.
Two costs sit behind the ladder and are worth naming at the booth, because they are where the ladder actually comes from. Packaging, which is often quoted separately and can move the unit price by several percent. And tooling or mould cost, which is a one-off that gets amortised across the order — ask whether it is charged once, whether it is refundable against volume, and who owns the mould. Ownership matters the day you want to move to a second supplier.
Thirty percent deposit with the balance against a copy of the bill of lading is the ordinary structure in Chinese manufacturing, and it is a fair one: the factory funds materials, the buyer funds the rest when the goods are demonstrably on a vessel.
| Structure | Who it protects | When it makes sense |
|---|---|---|
| 30% deposit / 70% against B/L copy | Balanced | The default for a first order with a supplier you have verified |
| 30% / 70% against inspection pass | Buyer | Where quality risk is the main concern; the factory will usually ask for a slightly higher price |
| Letter of credit at sight | Both, at a cost | Orders large enough for the bank fees to be irrelevant; common in markets where T/T is restricted |
| 100% before production | Seller only | Rarely justified for a new supplier, whatever the discount offered |
| Platform escrow or trade assurance | Buyer, partly | Small first orders where the platform's dispute process has real teeth |
Structures are commercial, not regulated. What protects a buyer is the paperwork: a signed PI, a bank transfer to a company account matching the contracting entity, and inspection rights written into the order.
Three details are worth settling at the booth rather than by email afterwards. Whether the balance is due against a bill of lading copy or against arrival, because the first is standard and the second shifts demurrage risk to you. Whether the deposit is refundable if production slips beyond an agreed date. And what happens to the deposit if the inspection fails twice — rework, price reduction, or cancellation with partial refund.
A sample fee of USD 50 with a promise to refund it against an order is a normal arrangement. What is not normal is discovering, three months later, that the refund was conditional on an order size nobody wrote down.
Two lines in an email fix it: the sample fee amount, and the order value or quantity at which it is credited. If a supplier will not commit to those two lines, treat the fee as a purchase rather than a deposit — and judge the sample on its own merits.
Where the sample is customised, expect to pay for tooling separately, and expect the tooling to be non-refundable. That is reasonable. What is worth confirming is that the tooling stays yours, and that a second sample round is included rather than charged again.
The proforma invoice is the document the whole shipment is built on. It is quoted at the booth, signed by email a week later, and then read by a customs officer in another country. If it is thin, everything downstream is slow.
An invoice missing the packing details or the HS code is an invoice that will be rewritten in a hurry in December, by someone who has forgotten what was agreed in October.
None of these are automatic fraud. All of them are positions that remove your ability to enforce anything after the money leaves, and at a trade fair there are forty alternatives within a five-minute walk.
Q What MOQ is normal for a first order from a Canton Fair supplier?
It varies by category, but per-order mixed MOQ is negotiable far more often than the quoted per-model figure suggests. Ask for the smallest run at a workable price and for the volume the next order would need to reach.
Q Is 30/70 payment standard in China?
Yes. Thirty percent deposit with the balance against a copy of the bill of lading is the ordinary structure. Alternatives include balance against inspection pass, letters of credit, and platform escrow for small orders.
Q Should I pay a deposit at the fair?
No. Sign a proforma invoice first, check that the bank account name matches the contracting company, and pay by bank transfer to a corporate account. Cash or personal transfers remove your ability to recover anything.
Q What must a proforma invoice include?
Product description with material and dimensions, packing details with carton dimensions and gross weight, HS code, Incoterms term with named place, payment terms, production lead time from deposit, and the inspection standard.
Q How do I know a supplier is a factory and not a trading company?
Ask for the business licence and compare the registered scope and address with where you are standing. A trading company is not automatically a problem, but you should know which one you are buying from, because it changes who controls quality and price.
Related pages
Once the PI is signed, send it to us. We will check the packing data against the container or air capacity you are paying for, flag the document gaps, and quote the leg the supplier is not covering.
Email sales8015@goodhopefreight.com | WhatsApp & phone +86 133 9216 2503