Order Deposit

Order Deposit is a certain percentage of the payment that the buyer pays to the seller after placing an order and before formal production or shipment, usually 10%-30% of the total order amount. It is used to guarantee contract performance and reduce the seller's risk. It is common in customized products, large orders, or transactions with new customers. Sellers often require a deposit to cover upfront costs such as raw material procurement and mold opening. Unlike Advance Payment, the deposit can usually be deducted from the final payment or refunded after the contract is performed, while advance payment is a direct partial payment for goods. Compared with Earnest Money, a deposit focuses more on performance guarantee and may not legally be subject to the 'earnest money penalty rule.' Precautions: The contract should clearly specify the deposit amount, payment time, deduction or refund conditions, and breach handling; if the buyer breaches, the seller may forfeit the deposit; if the seller breaches, double return may be required (if agreed as earnest money). It is recommended to pay by T/T and keep evidence, and note differences in how different jurisdictions characterize the legal nature of deposits.