How to Vet a Chinese Supplier: 12 Checks Before You Send a Deposit

Most sourcing disasters are visible in the first two weeks — long before a container is loaded. The problem is that most buyers only start checking after something has gone wrong.

These are the twelve checks we run on a new supplier before any deposit leaves the buyer’s account. None of them requires a law degree. Together they remove most of the risk.

1. Match the business licence to the company

Ask for a photo of the business licence (营业执照). Then check four names match exactly:

• the name on the licence
• the name on the proforma invoice
• the name on the contract
• the name on the bank account you are asked to pay

If any of those four differ, stop and ask why in writing. Also check the business scope (经营范围) actually covers what they are selling and exporting — it is one of the easiest things to verify and one of the most often missed.

2. Find out whether it is a factory or a trading company

Both are legitimate. The problem is a trader presenting itself as a factory, because you then pay factory-direct prices for a middleman’s service.

Ask directly: which city, how many production lines, how many workers, and can we do a live video call of the workshop during working hours? A factory answers in specifics. A trader answers in adjectives.

3. Verify certificates instead of collecting them

ISO 9001, BSCI, Sedex, CE, RoHS, FCC — a PDF certificate proves nothing on its own. Take the certificate number and check it on the issuing body’s website, or ask which certification body issued it and how to contact them. Confirm the scope covers the product you are buying, not a different product line.

4. Confirm they can actually export

Many small factories do not hold import/export rights (进出口权) and ship through a trading agent. That is workable, but you should know who is handling the customs paperwork and whose name appears on the export documents. Ask which Chinese port they normally ship from — a vague answer here is informative.

5. Insist the bank account name matches the licence

This is the single most common fraud vector. The account holder’s name must be the same company you signed with, in mainland China, in RMB or USD. Never a personal account, never a third-country account.

If you are asked to pay a Hong Kong account, ask for a written explanation of the relationship and make sure the name still matches the contract. “Our Hong Kong office” means nothing if the name on the account is unrelated.

6. Ask for a specification sheet, not just a price

A price without a specification is not comparable to anything. Material grade, thickness, tolerance, surface finish, packaging — all of it belongs in the proforma invoice as an annex, along with the defect standard you will accept (an AQL level, agreed in writing).

7. Buy a sample — and pay for it properly

Pay for the sample and the freight. A supplier who will not produce a sample before an order will be worse after the order. When the sample arrives, compare it to the specification and to the certificate. Then ask whether it came off the same line that will run your production.

8. See the factory in real time

Ask for a live video walkthrough — not a pre-recorded video — of the workshop, the warehouse and the QC area. Ask them to show you something specific while walking: “please show me the date on the production board” or “open the carton on the third pallet”. Live video is hard to fake and tells you more than any brochure.

For a first order of any size, book a third-party inspection instead. It is the cheapest insurance in this business.

9. Check their export history and references

Which markets do they ship to? Have they served customers in your country or region? Respect NDAs — ask for a category, not a customer name. Check platform history: years on Alibaba, transaction records, business registration date. Longevity is not proof of quality, but it filters out the newly created shell companies.

10. Agree the terms before money moves

• Payment milestones. 30/70 is normal for a new supplier. Be careful with 100% upfront, or with a large deposit and no clause protecting you.
• Delivery date and penalty. Late delivery penalties (around 0.5% per week) are standard in China; ask for one.
• Defect handling. Who replaces faulty units, within what window, and who pays the freight.
• Inspection before balance. Keep the balance payment conditional on passing inspection. This is your strongest lever, and it disappears the moment you pay early.
• Incoterm. FOB, CIF or DDP, with a named port. Written into the invoice.

11. Test how they answer questions now

Response speed is a preview of the after-sales experience. Good signs: replies within 24 hours, answers the actual question, pushes back when you are wrong. Bad signs: slow replies, evasiveness about money, and answers that only ever say yes.

12. The red-flag list

• A price 30% or more below the other three quotes
• Pressure to pay today because “the deposit locks the price”
• Only WeChat, no company email address, no contract
• Payment requested to a personal account or a third country
• Refusal to do a live factory video call
• Licence name, contract name and bank account name that do not match
• Unwillingness to put your specification in writing

The short version

Four names must match: licence, contract, invoice, bank account. Your specification must be written down and attached to the PI. And nothing beyond a deposit moves until an inspection has passed.

Those three things, done properly, remove most of what can go wrong with a new Chinese supplier. The rest is patience and a working relationship.

If you would rather hand the checking to someone who is already in Shenzhen, that is what we do — tell us what you are sourcing.