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Can I buy on credit from China?

by Mike Bellamy

Can I purchase goods on credit, and after I finish selling them, pay the supplier? In other words, can a person buy on credit if he or she does not have money but seriously needs the goods?

The answer really depends on your relationship with your supplier.  Since most factory-direct orders to China are above 10,000 USD per shipment, and assuming you are under that threshold, then unfortunately I am afraid to tell you, from my experience, it is very rare to buy on credit from a factory. However, if you start small and pay on time, it is realistic that you can move to preferential terms on future orders.  If you are buying from a China wholesaler rather than factory direct, you may be able to get credit sooner if your order is large in the eyes of the wholesaler (even if small in the eye of the factory).

I do know of buyers who have credit terms with factories, but they are all large buyers who have established long term relationships with their suppliers.

Here are some links to related blog posts and short videos at CSIC on the subject of supplier payments/ negotiations for your reference:

http://chinasourcinginfo.org/2010/06/11/best-practices-paying-chinese-suppliers/

http://chinasourcinginfo.org/2011/07/18/payment-terms-in-china/

Video 1: Finding Suppliers
Video 2: Evaluating Suppliers
Video 3: Negotiations
Video 4: Project Management and Quality Control
Video 5: Protecting Your Intellectual Property
Video 6: Leveraging Global Sources
Video 7: How to Find and Manage Partners for Logistics
Video 8: Avoiding Scams
Video 9: Returning Defective Products
Video 10: Resolving a Dispute

Let me know how things work out for you. Best wishes on your project.


Question answered by Mike Bellamy, an Advisory Board Member & Featured Blogger at the not-for-profit China Sourcing Information Center. Mike is also the author of "The Essential Reference Guide to China Sourcing" and founder of PassageMaker Sourcing Solutions.

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