The degree of risk of various payment methods is, in order of risk degree from low to high。
1.100% T/T advance
100% to production。Note that this is cash to production, and the other way is cash to delivery。This method of payment means that the whole payment has been received before the production has started. Of course, it is a payment method with zero risk for the exporter, but it is also the most risky method for the importer。Generally, this payment method is only used for sample orders or small orders。
2. T/T deposit + T/T balance payable before delivery
This payment method is also very secure。And the higher the deposit ratio, the higher the safety factor。Of course, there are some very extreme cases here, the customer abandoned the product after paying the deposit, or went bankrupt, the probability is very, very small。As long as there is no delivery and the deposit is received when the customer abandones the product, it can be resold to other customers or the price can be reduced。There are many solutions。
3.T/T deposit + final payment at sight L/C
Generally speaking, it is 30%T/T and 70% balance letter of credit。Of course, the higher the T/T ratio, the better。In fact, this payment method is almost as secure as the second payment method。It is also a very secure method of payment。The difference is that with this payment method, the document must be delivered after the ship is shipped and the bill of lading is obtained。Collection by letter of creditThe biggest risk is that the customer will refuse to pay after a discrepancy。After receiving T/T deposit, you can guarantee that there is an instant discrepancy, and the customer will basically accept the discrepancy payment redemption order, because he has paid so much deposit, it is impossible to do not want the deposit for the discrepancy on the document。So this payment method is also very, very safe。
The above three payment methods can be said to be 99.99% safe。If you are strict in risk control, the above three ways are absolutely preferred, and basically there will be no risk of bad debts and non-payment。
Then why say 99.99% instead of 100%。Because in addition to the payment method itself, it is also necessary to consider the specific economic and political situation at that time, such as the current war between Russia and Ukraine, Russia is subject to sanctions by relevant countries, and many foreign exchange paid by Russia to the domestic can not be successfully completed。