You wire the deposit, and the supplier goes quiet. It's one of the most common fears buyers have when sourcing from China — and which payment method you choose is itself a risk-management decision, not just a procedural step.
Why payment method matters more than price
Once money leaves your account by wire transfer, there's almost never a way to get it back. A bad price negotiation costs you money; the wrong payment method can cost you the money and the goods. The payment method you choose is part of your risk management, not just a formality to get through.
Alibaba Trade Assurance
Trade Assurance is Alibaba's built-in buyer protection for orders paid through the platform — it's free to the buyer and covers disputes over quality or late shipment, up to the order value. Alibaba steps in to mediate or arbitrate if a dispute arises. The limits: it only applies to transactions made on Alibaba.com; for larger orders, suppliers sometimes set their Trade Assurance limit below the order's real value; and dispute resolution can take time.
Third-party escrow
An escrow service holds the buyer's payment until the buyer confirms the goods have arrived or passed inspection, before releasing funds to the supplier. It works for deals made outside Alibaba, with any supplier found through any channel. The downside: both sides have to agree to use it, it typically costs a 1-3% fee, and many suppliers aren't familiar with the format, so you may need to convince them.
Wire transfer (T/T)
T/T is still the most common payment method — typically 30% deposit upfront and 70% before shipment, sent bank-to-bank. Once sent, it's irreversible, and it carries zero built-in buyer protection; it runs entirely on trust. You reduce the risk by verifying the factory is real, placing a small trial order on a first deal, and holding the final balance until goods pass inspection.
Quick comparison
- •Alibaba Trade Assurance — free, protection level depends on the limit the supplier sets, only works inside Alibaba, best for a first order with an unproven supplier
- •Third-party escrow — 1-3% fee, strong protection, works with any supplier outside the platform, best for larger orders where the supplier is willing to use it
- •Wire transfer (T/T) — no extra fee, no built-in protection, accepted by almost every factory, best for a supplier you already have a trusted, long-running relationship with
Which to use when
For a new supplier or a first order, favor Trade Assurance on-platform or escrow off-platform. For a factory you already trust from a long relationship, T/T combined with holding the final payment until after inspection is itself a real form of protection. For large, custom orders, consider splitting the payment into more stages, each tied to an inspection checkpoint.