Sending a five-figure payment to a factory nine time zones away is the moment most new importers feel the fear. Reasonable — and manageable, because the rug trade has settled payment conventions that protect both sides without exotic instruments.
The Standard Structure
Most orders run on a bank transfer deposit at order confirmation — commonly 30–50% — with the balance paid against evidence of shipment, typically copies of the bill of lading and invoice. The deposit funds yarn and dyeing; the balance-against-documents structure means you pay the rest only when the goods are demonstrably on the water, and the supplier releases title only when paid. Symmetrical risk, no bank bureaucracy.
Instruments for Larger or Nervier Orders
- Letter of credit: your bank pays the supplier's bank against exact documents. Strong protection, real fees and rigidity — usually overkill below serious order values, and many factories price the hassle in.
- Documentary collection: banks exchange documents for payment without guaranteeing it — a middle path some traders use.
- Trade-assurance style escrow exists on some platforms, but direct factory relationships rarely run through them.
The Safety Checks That Actually Matter
Verify the beneficiary account in writing through a second channel (invoice fraud by intercepted email is the real modern risk — call to confirm account details before the first transfer). Match the beneficiary name to the company you did due diligence on. Keep every payment tied to an invoice. And build trust deliberately: first order conservative terms, better terms as the relationship proves out — on both sides.
We have taken deposits and shipped against documents for buyers on five continents since 1979, and our banking details have not been a mystery to anyone's compliance team. Ask us for our standard payment terms in writing.