I've quoted machined parts out of Bao'an for thirteen years. Purchasing managers usually arrive with a drawing, a target price and a mental model built on domestic suppliers — net 30, invoice, done. Then the first proforma invoice lands and the percentage on it doesn't match anything they expected.
So let me just describe how the money actually moves here. Not the polished version.
Material is bought with cash. That's the whole reason a shop wants a deposit. A plate of 6061 or a bar of 17-4 doesn't get delivered on credit because we're a nice company with a good reputation; the mill wants payment, and if we're running a few tons a month across a couple hundred machines, the float is real money. When someone asks why we can't just bill them at the end, the honest answer is that we'd be lending them our material budget for six weeks.
First orders almost always land at thirty percent down, seventy before shipment. That's the default, not a negotiation trick. Where it moves is on the second and third order — once there's a delivery history, the deposit drifts down, and buyers who've been through a few clean cycles get shipped before the balance clears. What doesn't move is the shape of it: nobody here is shipping a first order and invoicing after. If a shop agrees to that immediately, they're either desperate or they're not planning to be around when you complain.
Then there's the question of how you send it. Wire transfer is cheapest and most shops prefer it. Alibaba Trade Assurance and similar escrow adds a couple of points in fees and buys you a dispute path, which on a first order of any size is not a stupid thing to pay for. We take both. Escrow genuinely annoys us — the money sits, the paperwork is fussy — but I'd rather a nervous first-time buyer use it and sleep, because the alternative is they don't order.
Now the thing I wish more buyers checked. Look at the account name on the wire instructions and compare it to the company name on the quote. If they're different, ask why in writing. Sometimes it's legitimate, an affiliated trading entity or a Hong Kong collection account. Sometimes it's the actual fraud, and it's the single most common way people lose money on Chinese orders — not bad parts, a payment sent to an account that was never the supplier's. I've seen a buyer lose a deposit to a spoofed email thread. Not our customer, but close enough that we now put the bank details in the PDF and say so on the phone.
The awkward part is rejection. Everyone signs a PO believing the parts will be fine. Then a pallet shows up and there's a burr on a mating face, or the anodize is blotchy, or — this happened to us — the parts were perfect and the packaging scratched a good chunk of them in transit. We redid that batch. It cost us, and it cost the buyer three weeks of schedule, which is worse.
The lesson wasn't "inspect better." It was that the argument about who pays return freight is much cheaper to have before the PO than after. So we now write a few lines into the quote: what we inspect, what AQL we inspect to, and who eats freight if it fails. Boring lines. They've saved more relationships than any discount.
One more, on tooling. If you're paying for a fixture or a soft jaw set, say in writing that the tooling is yours and stays at the shop for a year in case you reorder. Shops don't usually object. What happens otherwise is you switch suppliers a year later, come back, and the fixture has been broken down for someone else's job — nobody stole anything, it just got cannibalized, which is the most common way small manufacturers lose things.
Tolerances and lead times are the easy part of a quote to argue about. Five microns on a turned diameter, samples inside a week, production inside two — those are numbers you can compare across three suppliers in an afternoon. Payment structure and rejection terms are where the money actually goes wrong, and they're the two things almost nobody puts in the RFQ.
If a shop won't state the deposit percentage, the account name and the rejection terms in the same email, that tells you something. Not that they're crooks. Just that they haven't had a bad month yet.
None of this is exotic, by the way. It only becomes a problem when it comes up for the first time in a thread where everyone is already annoyed with each other.
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