Question this example answers
Can I safely release a deposit for this packaging machine?
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Buyer case example
Should you release a deposit for this packaging machine?
A packaging machinery supplier asks for a 40% deposit and 60% balance before shipment. The buyer needs to verify the payee, factory evidence, FAT plan, warranty terms, and machine acceptance conditions.
About this example: This is a realistic but simulated case based on common overseas buyer situations. Names, PI details, bank details, and machine details are fictional, so the example can show how a buyer should think through a payment decision without identifying a real supplier.
Buyer situation
BuyerCanadian food packaging company preparing a new production line
ProductAutomatic pouch packing machine with filling and sealing module
Order valueUSD 68,000
Payment request40% deposit and 60% balance before shipment
Supplier channelGoogle search, supplier website, and video call
Supplier claimOriginal manufacturer, 10-year machinery factory, CE certified, 12-month warranty, overseas installation support
Documents receivedWebsite, PI, bank instruction, layout drawing, machine spec sheet, warranty page, factory video, CE declaration screenshot
Do the company names match?
| Where the name appears | What the buyer sees | What it means | Why it matters |
|---|---|---|---|
| Submitted supplier | Foshan PackPro Machinery Co., Ltd. | Starting point | Buyer believes this is the machinery manufacturer |
| Chinese legal entity | Foshan PackPro Machinery Co., Ltd. candidate | Not enough | Related by name, but not uniquely anchored by credit code |
| Website identity | PackPro Global Machinery Limited | Ask for explanation | Website may belong to a brand, export company, or offshore sales entity |
| Marketplace identity | PackPro Packaging Trading Co., Ltd. | Does not match | Trading-company identity conflicts with manufacturer positioning |
| PI issuer | PackPro Global Machinery Limited | Does not match | Buyer would contract with a different entity |
| Bank beneficiary | PackPro Global Machinery Limited, Singapore | Do not ignore | Wire transfer would go to an offshore beneficiary |
| Warranty party | Not clearly named in warranty page | Still unclear | Buyer does not know which entity is responsible for warranty and installation support |
Documents checked in this example
| Check | Where it came from | What the buyer sees | Why it matters |
|---|---|---|---|
| E-01 | Name given to buyer | Supplier submitted as Foshan PackPro Machinery Co., Ltd. | This is the name the buyer started with |
| E-02 | Website | Website footer says PackPro Global Machinery Limited | Website identity differs from submitted supplier name |
| E-03 | Marketplace | Store profile lists PackPro Packaging Trading Co., Ltd. | Marketplace identity suggests a possible trading/export entity |
| E-04 | PI | PI issuer is PackPro Global Machinery Limited | Contracting party is not the submitted mainland supplier |
| E-05 | Bank instruction | Beneficiary is PackPro Global Machinery Limited, Singapore | Offshore payee needs written authorization |
| E-06 | Registry candidate | Business scope includes machinery sales, import/export, and technical consulting | Manufacturing capability is not clearly proven by registry scope |
| E-07 | Payment terms | 60% balance due before shipment, with no clear FAT or inspection trigger | Buyer may lose leverage before the machine is accepted |
| E-08 | Warranty page | Sales message says overseas installation; warranty page says parts only and excludes engineer travel | After-sales responsibility is unclear |
| E-09 | Machine spec sheet | Missing PLC/servo brand, sample material assumptions, output-rate conditions, and acceptance criteria | Buyer cannot judge whether delivered machine meets the promised configuration |
| E-10 | Factory video | Video shows a workshop but not the company sign, current date, or the buyer-specific machine model | Factory claim and project readiness remain unverified |
Packaging machinery checks
Packaging machinery orders are high-ticket and specification-sensitive. A useful report must check payment milestones, factory evidence, FAT, warranty, spare parts, and acceptance criteria before deposit.
Milestone Payment Structure
What to check: Deposit amount, balance trigger, FAT requirement, pre-shipment inspection, installation holdback, and whether payment is tied to objective acceptance.
What looks wrong: The supplier requests 40% deposit and 60% before shipment with no clear FAT or inspection trigger. This reduces buyer leverage before the machine is proven.
What to ask for: Negotiate deposit, FAT approval, inspection before balance, and a small installation or commissioning holdback where possible.
Factory Capability
What to check: Company sign, current date, machine build stage, workshop capability, same model evidence, and whether the supplier can show buyer-specific FAT.
What looks wrong: The provided video shows a workshop but not the exact supplier identity or buyer-specific machine model.
What to ask for: Request live video or scheduled FAT showing the company sign, machine nameplate, control cabinet, sample run, and current date.
Warranty And Spare Parts
What to check: Warranty party, covered parts, labor, remote support, engineer dispatch, travel cost, spare parts list, lead time, and excluded consumables.
What looks wrong: Warranty language conflicts with the sales claim. Overseas installation is promised verbally, while the written page appears limited to parts only.
What to ask for: Add warranty, spare parts, remote support, engineer dispatch, and response-time terms to the PI or contract annex.
Machine Specification And Acceptance
What to check: PLC/servo brand, output rate assumptions, bag size range, material thickness, filling accuracy, layout drawing, voltage, and acceptance checklist.
What looks wrong: The spec sheet does not define enough conditions for the buyer to prove whether the delivered machine meets the promise.
What to ask for: Create a configuration annex and FAT checklist before deposit, using the buyer materials and package sizes.
Payee Identity
What to check: Supplier name, PI issuer, contract party, stamp, bank beneficiary, and authorization between mainland and offshore entities.
What looks wrong: The submitted supplier, PI issuer, and Singapore beneficiary are different entities. No authorization letter was provided.
What to ask for: Request signed authorization and a corrected PI before sending funds to the offshore beneficiary.
Key findings
Balance-Before-Acceptance Payment Term Is High Risk
HighWhat points to this: E-07 requires 60% balance before shipment without a clear FAT or inspection trigger.
Why it matters: For machinery orders, the buyer needs leverage until the machine runs with the agreed materials, speed, accuracy, and packaging format.
What to do: Tie balance payment to FAT approval, pre-shipment inspection, and documented acceptance criteria.
Offshore Payee Does Not Match Submitted Supplier
HighWhat points to this: E-01 submitted supplier, E-04 PI issuer, and E-05 bank beneficiary do not match.
Why it matters: A high-value machinery deposit to an offshore entity without authorization can weaken accountability if the machine is delayed, incomplete, or not delivered.
What to do: Request signed authorization explaining the relationship between the mainland supplier, PI issuer, and Singapore beneficiary.
Warranty And Installation Terms Are Not Clear Enough
Medium-HighWhat points to this: E-08 shows a gap between sales promise and written warranty terms.
Why it matters: Machinery problems often appear during commissioning. Buyers need written clarity on support, spare parts, travel cost, and response time.
What to do: Add warranty, spare parts, remote support, engineer dispatch, and excluded items to the written contract package.
Factory Evidence Does Not Prove In-House Build
MediumWhat points to this: E-06 registry scope and E-10 factory video do not prove the exact machine is built by this supplier.
Why it matters: The buyer needs to know who builds, tests, and supports the machine, especially if customization is required.
What to do: Request live factory evidence and buyer-specific machine build or FAT evidence before balance payment.
Machine Specs Are Too Thin For Acceptance
MediumWhat points to this: E-09 lacks key configuration and acceptance details.
Why it matters: Without written configuration and acceptance criteria, disputes become subjective after the deposit is paid.
What to do: Attach a machine configuration annex and FAT checklist to the PI before deposit.
What the buyer should do next
Do not send a machinery deposit until payee authorization, FAT terms, machine configuration, and warranty obligations are written into the deal.
1Do not accept a full balance-before-shipment term without FAT and inspection triggers.
2Negotiate payment milestones around deposit, FAT approval, pre-shipment inspection, and installation or commissioning where possible.
3Request written authorization linking the mainland supplier, PI issuer, and Singapore bank beneficiary.
4Request a live FAT or video FAT using buyer materials, package sizes, and target output rate.
5Add PLC, servo, filling system, voltage, output assumptions, material assumptions, layout, and acceptance checklist to the PI annex.
6Clarify warranty party, spare parts list, remote support, engineer dispatch, travel cost, and response time in writing.
7Use inspection, escrow, letter of credit, or staged payment protection where available.
Message you can send to the supplier
Hi [Supplier Name], Before we release the deposit, our finance team needs to complete supplier, payment, and machinery acceptance verification. Please provide: 1. A signed explanation of the relationship between the mainland supplier, PI issuer, and bank beneficiary. 2. A revised payment schedule tied to FAT approval and pre-shipment inspection before balance payment. 3. A machine configuration annex including PLC, servo, filling system, voltage, output assumptions, material assumptions, layout, and acceptance criteria. 4. A written FAT plan using our packaging materials and product samples. 5. Written warranty and after-sales terms covering spare parts, remote support, engineer dispatch, travel cost, response time, and exclusions. 6. A live factory or FAT video showing your company sign, today's date, machine nameplate, and the same model being tested. Once we receive these documents, we can continue payment approval.
Important limits
This is a simulated example. It can help a buyer spot missing proof and decide what to ask for before payment, but it cannot guarantee a supplier is safe.
- It does not guarantee supplier safety.
- It does not prove a supplier is fraudulent.
- It does not replace legal advice.
- It does not replace factory audits, machinery inspection, FAT, or product testing.
- It does not guarantee recovery if a wire transfer fails.
FAQ
Should I pay a 40% deposit for packaging machinery?
A deposit can be normal, but buyers should verify the supplier, payee, factory evidence, machine specs, FAT plan, and written warranty terms before sending money.
What should be included in a machinery PI?
A machinery PI should include the legal supplier, payee, machine configuration, key component brands, voltage, layout, output assumptions, acceptance criteria, warranty, spare parts, delivery terms, and payment milestones.
What is FAT before shipment?
FAT means factory acceptance test. The supplier demonstrates the machine under agreed conditions so the buyer can approve performance before balance payment and shipment.
How do I verify manufacturer versus trading company for machinery?
Compare registry scope, website identity, marketplace identity, factory video, workshop capability, machine build evidence, nameplate, live FAT, and who provides warranty support.