Sourcing Guide

Sock Payment Terms With China Factories: TT and LC

Published: 2026-07-02By ZheSock TeamReading time: 7 min

China sock factory payment terms look simple on a PI, but one line can shift most of the risk to one side. In sock sourcing, the issue is not only TT or LC. It is also deposit size, when the balance is paid, which documents trigger payment, what inspection standard applies, and what happens if color, size ratio, or packing is wrong. Most sock orders from China still use TT. LC is more common on larger orders or when the buyer needs bank control. The better question is simple. Which term fits your order value, MOQ, lead time, and claim process without slowing production or creating document trouble.

Table of Contents

1. What TT and LC mean in China sock factory payment terms
2. What payment structure is normal for custom sock orders
3. When TT is the better choice
4. When LC is worth the cost and paperwork
5. How to reduce risk before you send a deposit
6. What must be written on the PI to avoid disputes on the 70 percent balance

What TT and LC mean in China sock factory payment terms

In China sock factory payment terms, TT means a bank transfer from buyer to supplier. In real orders, most factories ask for 30 percent deposit and 70 percent before shipment. On first orders below USD 5,000, some ask for 100 percent before dispatch. If the order includes custom yarn dyeing, recycled yarn booking, or printed retail boxes, many factories ask for 50 percent deposit because those costs start before knitting.

LC means a letter of credit issued by the buyer's bank. The bank pays against documents that match the LC terms. That gives more control on paper, but only if the document list is short and the wording is practical. One date mismatch, one invoice typo, or one missing phrase on the bill of lading can create a discrepancy and delay payment.

For socks, TT is more common because many orders are not large. A typical custom run is 3,000 to 20,000 pairs per style, often worth USD 3,000 to USD 25,000 in total. LC starts to make more sense around USD 30,000 and up, especially with a new supplier or a buyer finance policy that requires bank documents. Fees matter. A basic LC can cost about USD 250 to USD 800 once issuance, advising, amendments, and discrepancy charges are added. On a USD 8,000 sock order, that is expensive.

Typical price bands for reference:

96 needle basic cotton crew sock, 70 to 90 grams per pair, simple hangtag, 5,000 pairs. About USD 0.35 to USD 0.60 per pair.
144 needle kids sock, combed cotton blend, jacquard logo, 25 to 40 grams per pair, 5,000 pairs. About USD 0.30 to USD 0.55 per pair.
168 needle sport sock with terry foot and arch support, 55 to 85 grams per pair, 5,000 pairs. About USD 0.50 to USD 0.90 per pair.
200 needle dress sock, mercerized or combed cotton blend, 35 to 55 grams per pair, 5,000 pairs. About USD 0.55 to USD 1.10 per pair.

What payment structure is normal for custom sock orders

The usual structure is 30 percent deposit and 70 percent before shipment, after the buyer reviews final documents and inspection results. The deposit pays for yarn purchase, sample correction, carton printing, barcode labels, and machine scheduling. Factories buy materials before knitting starts. That is why the deposit matters.

Common MOQ in China sock production:

Stock color basic socks. 500 to 1,000 pairs per color per size.
Custom logo knitted into the sock. 1,000 to 3,000 pairs per style.
Custom dyed yarn or melange color. Often 3,000 to 5,000 pairs because yarn mills have their own minimums.
Retail gift box sets. Often 1,000 to 2,000 boxes if the box is custom printed.

Typical production timing for one custom style after deposit and sample approval:

Counter sample revision. 3 to 7 days.
Lab dip or yarn color confirmation if needed. 3 to 5 days.
Bulk yarn booking and trim prep. 7 to 12 days.
Knitting. 7 to 15 days.
Linking, boarding, trimming, pair matching, metal check if required, packing. 5 to 10 days.
Final inspection and shipment booking. 3 to 5 days.

Total lead time is usually 20 to 35 days for repeat constructions and 30 to 45 days for new programs with custom packaging. If the order mixes 96, 168, and 200 needle constructions, add time. Different machines and boarding settings are involved.

Some factories accept 100 to 300 sample pairs for a small custom run. The unit price will rise because setup cost is spread over fewer pairs. That is small-run flexibility, not normal bulk MOQ. Keep the difference clear.

When TT is the better choice

Choose TT when the order value is moderate, specs may still change, and speed matters. Sock orders change often. Size ratios move. Carton marks get revised. Header cards are updated. A retailer may reject a barcode format and ask for a new one. TT handles those changes with less paperwork than LC.

TT is usually the practical option in cases like these:

Order value under USD 30,000.
Lead time under 30 days.
Several constructions in one order, such as 144 needle kids socks, 168 needle sport socks, and 200 needle dress socks.
Custom packing that may need revision during sample approval.
Repeat orders where the supplier has already matched your approved sample.

Example. You buy 12,000 pairs across 3 colors and 2 sizes. The order mixes a 168 needle terry sport sock at 78 grams per pair and a 200 needle business sock at 42 grams per pair. Total value is USD 11,600. TT fits. An LC would likely slow production, and any packing list change or shipment split could trigger an amendment fee.

If you use TT, tighten the process. Do not rely on the payment term alone. Ask for this sequence in writing:

30 percent deposit after sample approval and PI confirmation.
Bulk production starts only after the approved sock sample, packaging file, and carton mark are signed off.
Final balance is due after the buyer receives the inspection report, final packing list, invoice, and dated carton photos.
Shipment is released only after the balance is received.

Simple. Clear. Effective.

When LC is worth the cost and paperwork

LC is worth considering when the order is large enough that prepayment risk matters more than bank cost. In socks, that often means USD 30,000 to USD 50,000 and above. It is more common on multi-style seasonal buys, chain store programs, or orders where internal buyer policy requires bank-controlled payment.

Example. You place a USD 62,000 order for men's crew socks, women's no-show socks, and kids school socks, packed in retail-ready sets, with delivery split into two shipment windows. The factory is new to you. In that case, LC can make sense if the document conditions are clean and realistic.

Keep the LC short. A workable LC for socks usually asks for:

Commercial invoice.
Packing list with pair count by style, color, and size.
Bill of lading.
Certificate of origin, only if your customs entry needs it.

If testing is required, state the exact standard and the exact report needed. Do not use open phrases such as "all quality documents acceptable to buyer." That is how discrepancies start.

Also be realistic about quantity and packing tolerance. Socks are often packed by size ratio. One carton may hold 120, 144, or 240 pairs depending on style and retail set. A practical clause is shipment quantity tolerance within 3 percent, unless your customer contract says otherwise. If you demand zero variance on every count line, you raise the chance of LC amendments.

LC does not replace inspection. It only changes how money moves. You still need product control. A common pre-shipment inspection benchmark is AQL 2.5 for major defects and AQL 4.0 for minor defects, unless your customer requires a different level. For higher-risk programs, some buyers use AQL 1.5 major and 2.5 minor. Agree that before production starts. Not after packing.

How to reduce risk before you send a deposit

Start with identity checks. Then move to production checks. Before wiring money, compare four items: supplier name on the PI, bank beneficiary name, business license name, and export company name. If the factory uses a separate export entity, ask for that in writing before payment. Do not send funds to a personal account for a normal export order.

Ask specific factory questions:

Which needle counts do you run in-house. 96, 108, 120, 144, 168, 176, 200.
What is your normal MOQ by construction and by color.
Can you make combed cotton, bamboo viscose, merino blend, GRS recycled polyester, or GOTS organic cotton if needed.
What is your normal lead time in days after deposit.
What AQL level do you accept for final inspection.
Do you board by exact size mold, and how do you control pair length tolerance.

For quality control, ask for the real process. A normal sock QC flow looks like this:

Incoming yarn check for count, color, and lot consistency.
First-piece check after knitting starts.
In-line checks on sock length, foot length, logo position, and yarn defects.
Linking and toe closure check.
Boarding temperature and size check to control final dimensions.
100 percent visual sorting for stains, needle lines, broken yarn, and pair mismatch before packing.
Carton audit before sealing, including pair count, size ratio, barcode, and carton mark.

Write tolerances on the order. Example. Sock length tolerance plus or minus 1.5 centimeters after boarding. Pair weight tolerance plus or minus 5 percent. Color to match the approved sample under a standard light source. Quantity tolerance within 3 percent unless the retailer fixes the count. These details matter when the 70 percent balance is due.

If the factory holds OEKO-TEX, BSCI, Sedex, ISO 9001, GOTS, GRS, or CE for relevant products, ask for a current copy. If not, keep the claim out of the deal.

What must be written on the PI to avoid disputes on the 70 percent balance

Most payment trouble starts with weak PI wording. "70 percent before shipment" is too vague. The PI should state what the buyer receives before paying and what counts as acceptable goods.

A clearer clause is this: "30 percent TT deposit upon PI confirmation. 70 percent TT balance payable after buyer receives final commercial invoice, packing list, carton photos, and pre-shipment inspection report showing pass at agreed AQL level, and before release of original bill of lading or telex release."

The PI should also list the production spec so a third party can inspect it:

Style name or style code.
Needle count, such as 168 or 200.
Fiber content with percentages.
Target weight per pair in grams.
Size range, cuff-to-heel length, foot length.
Color references and approved sample date.
Packing method, for example 1 pair per header card and hook, 12 pairs per inner, 120 pairs per carton.
Carton size and gross weight limit if needed for warehouse handling.
Lead time counted from deposit date and sample approval date.
Inspection standard, such as AQL 2.5 major and 4.0 minor.
Claim window, for example within 30 days after goods arrival.

For retail programs, write trim details line by line. Example. "One pair, one belly band, one size sticker on hook side, one barcode label on polybag, barcode file version V3 dated 2025-03-18." It looks strict. It prevents chargebacks.

If you accept shade or quantity tolerance, write the exact number. If you do not write it, each side may remember the discussion differently when a problem appears.

Frequently Asked Questions

Is 30 percent deposit and 70 percent before shipment standard for socks from China?

Yes. For custom socks, 30 percent TT deposit and 70 percent TT before shipment is the most common setup. First orders under about USD 5,000 may need full payment before dispatch. Custom dyed yarn, GRS recycled yarn booking, or gift box packing can push the deposit to 50 percent.

Can I pay the 70 percent balance after the goods arrive?

Usually no. Most factories will not ship on arrival payment unless you have repeat business, credit support, or a large annual program. A more workable option is to pay the balance after a passed pre-shipment inspection and after you receive the invoice, packing list, and carton photos, but before release of the bill of lading.

At what order value does LC become practical for sock imports?

Many buyers start considering LC at around USD 30,000 to USD 50,000. Below that, bank fees and amendment risk often cost more than the added control is worth. If the order is likely to change in style count, packing, or shipping split, TT is often easier even above that range.

What inspection level is normal before paying the balance?

A common benchmark is AQL 2.5 for major defects and AQL 4.0 for minor defects. Stricter retail programs may use AQL 1.5 major and 2.5 minor. Put the exact AQL level on the PI before bulk production starts. That avoids arguments at payment time.

What documents should I review before releasing final payment?

At minimum, check the commercial invoice, final packing list, carton photos, shipment details, and pre-shipment inspection report if inspection is part of the order. For retail sock programs, also verify barcode placement, hangtag version, carton marks, carton count, and pair count by size and color. Those are common dispute points.

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