Fair Payment Structure For Hardware Manufacturing

A Payment Structure That Promotes Balance, Progress And Bilateral Trust

The above chart shows our standard payment structure for development and manufacturing of a custom Android device. Deposits are triggered incrementally at different points in time. Each deposit corresponds to the end of a phase of the project and the beginning of another.

Discover more details on our incremental payment structure below.


Note that trial production is an added part to mass production that happens (usually) only during the first mass production run of a custom product (or any product when it's being made for the first time).

To get a better understanding of each phase of development and manufacturing of a custom Android device we recommend you to check the 8 crucial stage of production of a smart device.


During the development and manufacturing process, payment of deposits are triggered at certain points in time. 

Deposit #1

-> Agreement is signed

-> Prototype development starts

Deposit #2

-> First prototype is shipped

-> Customer send requests for modification

Deposit #3

-> Prototype is validated

-> Mold production starts

Deposit #4

-> Mold has been tested and validated

-> Trial production starts followed by mass production

Balance Payment

-> Mass production phase is over

-> Production is ready for shipping

Note on Deposit #1:

  • This first deposit serves to get the development/engineering done for electronics, firmware, design, mechanical, etc. Deposit #1 is calculated based on forecast quantity.

Note on Deposit #3

  • Depending on what has been agreed between the customer and the company, before the mold production starts, the third deposit  may be made independently from the cost of the mold. In such a case the molding cost is also to be paid before its production starts. 
  • The same thing is true for license and certification costs. These costs can be paid after the mold is produced.


Percentages are for reference purposes only. Deposit levels vary depending on the nature of the project, overall size of the order and the amount of development work involved. The normal level goes between 5 to 10%. The larger is the order the smaller is the deposit percentage.

Because Hatch offers start to shipping service payment is usually slightly weighted at the point of prototype completion, the stage before mass production.


To illustrate the payment structure we took a conservative timeline of 32 weeks for a custom Android device development & manufacturing.

Week 2: Project Kickoff

Count approximately 2 weeks to agree on a fair deal. After signature of contracts, the first deposit is made and the project starts. A payment of ~10% of the contract is reached.

Week 12: Prototype V1

After approximately 10 weeks of development the first prototype is ready for shipping. The second 10% deposit occurs. The total paid reaches 20% of the contract.

Week 14: Validation

During approximately 2 weeks the client reviews the prototype and sends his feedbacks. Once prototype is approved, the payment for molding is triggered with, in most cases, a final 10% development deposit.

Week 18~20: Mold is Ready

After 4 to 6 weeks the mold is completed and the required certifications and licenses are obtained. A 30% deposit is made to start mass production.

Week 28: Mass Production Complete

After 4 weeks of trial production (which is used to refine a SOP for Mass Production and make small design changes, if necessary) the mass production will run for a further 4 weeks. Once mass production is finished the final balance of payment is due before shipping.


We specialize in development and manufacturing of custom Android phones, tablets or any other device running on Android. But this payment structure can be adapted and used for many different kinds of contract. It is all about fairness. 

Fairness is reached when both parties can minimize their risks equally and feel like they can trust each other in a honest partnership. We found that the best way to make it happen is with transparency in a reliable and accurate exchange of information. 

For the service provider it consists of providing honest and reliable information on their ability to make the production happen in a timely manner with the promised level of quality. 

For the client it consists of providing honest information about their company, device specifications as precise as possible and also an accurate sales forecast as the quotation is based on this.

By doing so, both parties will be able to rely on each other and avoid all the troubles that an unrealistic forecast, inaccurate quotation or unreliable promise of quality can bring to the table.

From there, both parties will understand why such a payment structure is a fair one as it evolves relative to invested time and invested money during each project steps' completion.

Pass by to say Hi!

hatch smart manufacturing map location in shenzhen

Hatch | Smart Manufacturing

Caifu Building, Caitian Road, Futian District, Shenzhen, China 518000

+86 755 8368 9256


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