The financial structure of a first furniture order protects both sides when it is clear, and destroys trust when it is vague. This is how a well-structured order usually looks — using Dutch and wider EU buyers as the worked example — where the money should go, and where buyers should push back.
What Dutch and EU buyers are weighing in 2026
European hospitality is in a cautious but real phase. The Dutch hotel investment market was notably subdued through late 2025 and the first half of 2026, with buyers and sellers taking a wait-and-see stance, while operating performance stayed volatile but ended 2025 in growth. On top of that, a proposed rise in VAT on hotel stays from 9% to 21% from 2026 has hung over turnover forecasts. The practical effect for a furniture buyer is that capital is being committed carefully, and the terms of a first order matter more, not less, when the numbers are tight.
Regulation adds a second constraint. From 30 December 2026 the EU Deforestation Regulation requires wood products placed on the EU market to be deforestation-free and supported by due diligence — so the payment discussion now sits alongside a documentation discussion. A deposit should not leave your account before you have agreed both the commercial terms and the evidence trail that will support your compliance file. Buying well in 2026 means paying on a structure you understand and can defend.
The standard structure
In this trade the common arrangement is a wire transfer deposit of 50% to start production, with the balance due before shipment. It protects the manufacturer against a cancelled order — raw teak root and workshop time are committed early — and it protects the buyer, because the goods do not leave the port of loading until the money has arrived, so you are never paying for a container that has already sailed. For a first order, the production window is around twelve weeks, and the balance is typically settled once the goods are packed and inspected, just before they are loaded.
What should be in writing before the deposit
- Full specification: items, sizes, quantity, finish, packing
- Unit prices and trade term (FOB or CIF)
- Deposit percentage and balance timing
- Production schedule with an estimated completion window
- Documents included, and any charged separately
- Timber legality and origin documentation for your market
- What happens if the schedule slips
Payment methods, and who carries the risk
There is more than one way to pay, and the choice is really a choice about who holds the risk at each stage:
- T/T (telegraphic transfer) — fastest and cheapest, but the buyer relies on the supplier. A deposit-plus-balance structure is a T/T arrangement with milestones.
- Letter of credit (L/C) — the bank pays against documents, which reduces non-payment risk but adds cost, formality and a strict document-discipline requirement. Sensible for larger or more formal orders.
- Documentary collection (D/P) — documents are released against payment, sitting between the two: more control than open account, less cost than an L/C.
- Escrow — the money is held by a third party until agreed conditions are met. Rare in this trade, and often expensive, but occasionally used for large first orders.
The right answer depends on your bank's appetite and the size of the order. For most first orders of a single container, deposit-plus-balance is the normal, workable middle ground.
Inspection: the buyer's best protection
Whatever the payment method, inspection is what converts a promised order into a verified one. Ask for photographs of the finished goods before packing, photographs of the loaded container before dispatch, and the option of an independent third-party inspection. None of these are unreasonable requests, and a serious supplier will offer them before you ask. If your order mixes products — a teak root dining table, a coffee table with a glass top, a root bench, a set of stools, a console — the inspection should confirm each line against the packing list, not just take a photo of the container door.
The cleanest structure ties the balance to a point you control: pay the deposit to start, inspect when production finishes, and release the balance against the packed, photographed, listed shipment. That way the money follows the evidence.
Milestones for a safe first order
Reduce the whole transaction to a short timeline you can both point at:
- Week 0: specification, prices, trade term and payment terms agreed in writing; deposit invoice issued
- Week 1: deposit received; the workshop confirms the production schedule and the materials
- Weeks 1–10: production runs; you receive progress photographs at the points you agreed
- Week 11: goods finished; pre-packing photographs and, if you choose, third-party inspection
- Week 12: packed and listed; balance due; container loaded, photographed and sealed
- After loading: bill of lading released; your broker clears and delivers
Notice that each payment step is tied to something you can see. The deposit follows a written specification; the balance follows a packed, inspected, photographed container. When both sides know the milestones, a first order stops feeling like a gamble and starts feeling like a schedule.
Warning signs
- A request for full payment upfront on a first order
- No written specification, only chat messages
- Refusal to provide a production schedule
- Reluctance about inspection or container photographs
- Bank account details that change late in the process
- A supplier who cannot explain where the balance is due and why
Inside Jepara: why a deposit is normal here
A 50% deposit is not a demand born of distrust; it is how a workshop in Jepara funds an order it has not yet earned on. Teak root is bought and sorted early, drying and seasoning take months, and skilled carvers are booked against production schedules. When a buyer commits a deposit, the workshop can commit timber and hands to that order instead of balancing three others informally.
Jepara's craft is generational — much of the shaping of a root into a dining table or a table base is still done by hand, by people who learned it from a parent — and the rainy season sets a physical limit on how fast roots can be dried and sanded. A supplier who respects that rhythm quotes twelve weeks, not six, and tells you the range honestly. Our four 40-foot containers a month, and more than 300 containers shipped since 2016, are the reason we can be specific about milestones: deposit to start, inspection at pack-out, balance before the container is loaded. The structure is not just finance; it is the same discipline that keeps the paperwork clean.
Working with us
CV. Nusantara Sourcing Agent manufactures and exports handcrafted teak root furniture from Jepara, Central Java, Indonesia. Minimum order is one 20-foot container, mixed items and pieces are welcome, prices are quoted FOB Semarang, capacity is four 40-foot containers per month, and we have shipped over 300 containers since 2016.
Frequently Asked Questions
Is a 50% deposit normal for a first order?
Yes. Deposit to start production and the balance before shipment is the standard structure in this trade. It funds raw material and workshop time early, while keeping the goods in port until payment is complete.
Can I pay by letter of credit instead of T/T?
Yes, on larger or more formal orders an L/C is workable. It lowers payment risk but adds bank cost and strict document discipline; we are happy to ship against compliant documents if that is how your bank prefers to work.
Who pays for third-party inspection?
Normally the buyer engages and pays the inspection company, because the inspection protects you. We welcome it and schedule the pack-out, so the inspector can attend or receive photos before loading.
What happens if the goods fail inspection?
The balance is not due until the issues are resolved. Problems are usually finish or count mismatches that we correct before loading; a written specification makes this a repair, not a dispute.
Why is the balance due before shipment and not after arrival?
Because the supplier loses control of the goods once they sail, and the buyer gains it. Settling before loading keeps the incentive on both sides aligned: inspected, photographed, listed, then paid.
Talk to us about your first order
Send your target items and quantities — we will tell you what fits in a container, what it costs FOB Semarang, and how long it takes.
Or write directly to export@teakrootfurniture.com · WhatsApp +62 812 283 3040 · Mr. August Praymunor (10:00–16:00 Jakarta time, GMT+7)
Email: export@teakrootfurniture.com | Office & Factory: Jl. RA Rukmini KM.02 Pekalongan RT.02/V, Tahunan, Jepara 59428, Central Java, Indonesia.
Packed, listed and inspected before the balance falls due.
See also
- Teak Root Furniture Export from Indonesia: A Practical Buyer Guide
- Teak Root Furniture Manufacturer in Indonesia: How to Choose the Right Partner
- Wholesale Teak Root Furniture for Importers and Distributors
- Our teak root furniture range
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WRITTEN BY
Mr. August Praymunor · Overseas Marketing Director
CV. Nusantara Sourcing Agent — manufacturer and exporter of teak root furniture in Jepara, Central Java, Indonesia. Over 300 containers shipped since 2016, loading 4 x 40 FCL per month.
export@teakrootfurniture.com · WhatsApp +62 812 283 3040 · LinkedIn · Jl. RA Rukmini KM.02 Pekalongan RT.02/V, Tahunan, Jepara 59428, Central Java, Indonesia