How to vet a supplier in China and avoid scammers

Most problems when working with China arise not in production or logistics, but at the very first step — choosing a supplier. That is also where most money is lost. Let us go through how to verify a Chinese company before you send the first payment.

Factory or reseller: the difference

China has a huge number of trading companies that produce nothing themselves — they buy from factories and resell at a markup. There is nothing criminal in that, but if price and quality control matter to you, it is better to work directly with the manufacturer.

How to tell them apart:

• Ask about production directly. A real factory will happily show the workshop — photos, video, a video call from the floor. A reseller will dodge specifics.
• Check the specialisation. A factory usually makes a narrow category. If a “manufacturer” offers furniture, electronics and textiles alike, it is almost certainly an intermediary.
• Verify the address. A trading company’s registered address in an office district and a “factory” are different things.

Documents worth requesting

• Business licence with a registration number — the basic document of a Chinese company.
• Export licence — the right to conduct foreign trade.
• Product certificates, if your category and country require them.
• Bank details in the company’s name, not an individual’s (more on this below).

Red flags: when to be cautious

If a supplier rushes you to pay, gives a price noticeably below market and asks you to transfer money to a personal card — that is not a great deal but a classic scam.

Signs to stop and double-check:

• Payment to an individual’s account, not the company’s.
• A price well below market — almost always means a different material, thickness or configuration.
• Pressure and urgency — “today only,” “last batch.”
• Refusal to show production or give a video call.
• A sudden change of bank details before payment (a common sign of email compromise — see below).
• No history or reviews, a new company with no verifiable profile.

Separately about “email interception”

A common scheme: scammers gain access to the correspondence and, at the right moment, send an email “from the supplier” with new bank details. The money goes not to the factory.

The defence is simple: confirm any change of bank details through another channel — a video call or a call to a known number, not a reply to the email.

How to secure payment

• Work under a contract with a specification and liability for defects.
• Use staged payments: part to start, the balance after a successful pre-shipment inspection.
• Pay to the company account matching the name in the contract.
• For a first order with a new supplier — order a sample before a large batch.

Checklist before the first payment

1. Is this a factory or a reseller? Confirmed by workshop video?
2. Are there a business licence and an export licence?
3. Are the bank details for a company account matching the contract?
4. Is the price reasonable for the market (not “too good”)?
5. Is there a contract with a spec and defect terms?
6. Is payment split into stages with a pre-shipment inspection?

If even one point is open — do not rush to pay.

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Don’t want to vet suppliers yourself? We find and verify factories, sign the contract and control quality at the production site — you work with a vetted manufacturer without the risks.