How to Verify a Chinese Supplier Before Paying a Deposit
Short answer: before any deposit leaves your account, run nine checks in this order — 1) the company legally exists and the registration matches the name on the quote, 2) the bank account holder is the same legal entity you are contracting with, 3) the seller actually runs the production line you are buying from, 4) they hold export rights and customs registration, 5) the test certificates are issued to them and cover your SKU, 6) an approved golden sample exists and is kept by both sides, 7) a third-party AQL inspection is booked before the balance payment, 8) the payment structure ties the 70% balance to that inspection, 9) the company has no litigation or enforcement records that match its size. Checks 1 and 2 take about two hours and cost nothing; they stop the majority of deposit losses. A one-day pre-shipment inspection is 150 USD per person-day, and on a 5,000 USD first order the whole verification costs roughly 190–230 USD.
Why the deposit is the risk point, not the shipment
Almost every dispute we are asked to look at has the same shape: money left before anything was verified. A deposit is the only moment in the transaction where you carry full risk and hold no leverage — the supplier has your cash, you have a promise, and the goods do not exist yet. After production, at least the goods exist and an inspection can see them. Before production, the only thing you can verify is the entity you are paying.
This is also why a low price is not proof of anything. A quote 15% below the market is not a discount, it is an unanswered question: which cost was removed. The nine checks below are how you answer it before the money moves, not after.
The nine checks, in the order that matters
| # | Check | What you are verifying | Where to look | Fail signal |
|---|---|---|---|---|
| 1 | Legal existence | Company name, 18-digit Unified Social Credit Code, registration date, registered capital, business scope covering your product | National Enterprise Credit Information Publicity System (gsxt.gov.cn), or a commercial mirror such as Qichacha / Tianyancha | Name on the quote differs by a word; code does not resolve; registered less than a year ago while claiming a ten-year factory |
| 2 | Payee identity | Bank account holder name is identical to the contracting company — contract, proforma invoice and bank details form one unbroken chain | The proforma invoice, and the bank details page sent by the supplier; ask for the account opening certificate | Personal account, a Hong Kong account for a mainland factory, a trading name that is not the legal name, or bank details "updated" by email mid-order |
| 3 | Factory or trader | Whether the production line is in-house or subcontracted, and whether they can show it on demand | A live, unedited video call: ask them to walk to a machine and read the nameplate, show the incoming-material area and the finished-goods floor, and put today's date on a whiteboard | Only stock photos or an edited promo video; "the workshop is closed today"; cannot show equipment or answer how many lines run |
| 4 | Export rights | Customs registration as a foreign trade operator, and which port they ship from | Request the customs registration record (报关单位备案), or ask them to log into the Single Window and share the screen | No export rights at all — not fatal, but it means a third party controls export documents and nobody is accountable for them |
| 5 | Certificates that match the seller | That the test report is issued to the company you are paying, is still valid, and covers your exact model | The report number, checked with the issuing lab; the applicant block on page one; the model list in the scope | Certificate belongs to another company; expired; covers a different model or a different material grade |
| 6 | Golden sample | That "approved" has a physical definition both sides keep | Courier one production sample, photograph it with a scale, write the parameter table with tolerances, and ask the supplier to keep a sealed counterpart | Spec sheet says "good quality" or "as per your request"; supplier refuses to keep a sealed sample |
| 7 | Third-party inspection | That quality is sampled by a statistical plan, not by opinion | Book the inspection before the balance payment: AQL II, major 2.5, minor 4.0, critical 0, per ISO 2859-1 / GB/T 2828.1 | Supplier insists the balance is paid before inspection, or refuses an inspector on site |
| 8 | Payment structure | That each milestone is released by a condition, not by a date | The contract clause: 30% deposit against a signed PO and golden sample, 70% against a passed inspection report | 100% upfront; "pay now for a 5% discount"; a deposit with no inspection condition attached |
| 9 | Litigation and enforcement | Whether the company has a pattern of contract disputes or unpaid judgments | China Judgements Online (wenshu.court.gov.cn), the dishonest-judgment-debtor register (zxgk.court.gov.cn), and the abnormal-operations list on gsxt | Repeated sale-contract disputes; listed as a dishonest debtor; flagged as operating abnormally |
Checks 1, 2 and 9 are desk work and can be done in an afternoon. Checks 3, 4 and 5 need one call and one screen share. Checks 6 and 7 sit at the two payment moments, which is exactly why they carry the most weight.
Red flags that end the conversation
Any one of these is enough to stop and re-verify, regardless of how good everything else looks:
- The bank account name is not the company name, or the account is personal.
- Bank details change by email after the order is placed, even with a plausible explanation.
- The price is materially below every other quote and the reason is "we are the factory".
- Live video is refused, postponed twice, or replaced by a pre-recorded clip.
- The certificate is offered as a JPEG, with no report number and no lab name.
- The supplier wants 100% before production, or offers a discount for paying everything today.
- The proforma invoice has no HS code, no tolerances and no inspection clause.
- Communication moves to a personal messenger account, and the person "handling your order" cannot be found in the company registration.
What the nine checks cost on a 5,000 USD first order
| Item | Cost | Note |
|---|---|---|
| Registry, payee identity, litigation check | 0 USD | Public systems; about two hours of work |
| Live factory video call | 0 USD | One scheduled call, 30–45 minutes |
| Sample courier | 40–80 USD | Depends on weight and product category |
| Pre-shipment inspection | 150 USD per person-day | One day is enough for most first orders |
| Total verification | 190–230 USD | About 4% of the order, about 15% of a 1,500 USD deposit |
Set that against the exposure: a 30% deposit on a 5,000 USD order is 1,500 USD paid against nothing but a promise, plus the tooling and the weeks lost if it goes wrong. The verification is not a cost of doing business with China; it is the price of making the deposit reversible in practice, because every check produces a document you can act on.
Running it as a sequence, not a checklist
| When | What happens | Output you keep |
|---|---|---|
| Day 0, 2 hours | Checks 1, 2, 9 — registry, payee identity, litigation | Registry extract, screenshot of bank details matching the invoice, litigation search result |
| Day 1 | Checks 3, 4, 5 — live video, export rights, certificates | Call recording, customs registration record, report numbers verified with the lab |
| Day 2–5 | Check 6 — sample in hand, parameter table agreed, sealed counterparts | Signed spec sheet with tolerances, photos with scale |
| Day 5 | PO signed, 30% deposit released against it | Contract with the inspection clause in it |
| Before balance | Check 7 — AQL inspection on site | Inspection report with defect counts and photos |
| Before shipment | Consolidation, documents, freight booking | Packing list, invoice with HS codes, transport documents |
Two details are worth writing into the contract rather than agreeing verbally: inspection is a condition of the balance payment, and the deposit is refundable if the inspection fails and the defects are not corrected within an agreed rework window. Without those two sentences, checks 7 and 8 collapse back into good intentions.
What we do, and what it costs
| Service | Our rate | What it covers |
|---|---|---|
| Sourcing commission | 6% up to 5,000 USD (min. 60 USD) 4% from 5,000 to 20,000 USD 3% from 20,000 to 50,000 USD 2.5% above 50,000 USD |
Factory search and verification across checks 1–5, price and MOQ negotiation, order placement and follow-up |
| Pre-shipment inspection | 150 USD per person-day | Factory visit, AQL sampling, photo and video report |
| Consolidation | 12 USD per CBM (min. 30 USD) | Receiving goods from several suppliers at one warehouse, palletising, labelling, photo report; freight not included |
| Freight | At carrier cost, no markup | Rail, road or air; you see the carrier invoice |
Door-to-door from Yiwu or Ningbo to Tashkent runs 20–40 days, and LCL freight is typically 130–160 USD per CBM by rail with 18–22 days in transit. Payment terms are 30/70, with the balance released against the inspection report — the same structure we recommend in check 8, applied to our own invoices. Minimum order quantity starts at 100 pcs, and mixed SKUs can be combined in one consolidation.
If you already have a supplier and only need the verification step, send us the company name, the proforma invoice and the certificate you were given. We will run checks 1–5 and tell you what does not line up, before you pay anything.
Read next
- Pre-shipment inspection and AQL: how the check is run
- China sourcing agent: scope, fees and how we work
- Low MOQ and mixed-SKU orders from China
- Order consolidation at one warehouse
- Turnkey supply from China to Uzbekistan: door to door, duties and documents
Frequently asked questions
How long does supplier verification take?
Two hours for the desk checks (registry, payee identity, litigation) and about one working day for the rest, assuming the supplier responds. If the sample has to be couriered, add three to five days. Verification is not the slow part of a first order; sampling and production are.
Can I verify a supplier without visiting China?
Yes, for checks 1, 2, 4, 5 and 9 — they are document and registry checks. Check 3 needs a live video call rather than a visit, which works if you direct it yourself: ask for a specific machine, a specific shelf, and today's date written on a board. Check 7 needs someone physically on site, which is what third-party inspection is for.
Is a business licence enough to prove a supplier is reliable?
No. A business licence proves the company exists; it says nothing about whether they run the factory, whether the bank account belongs to them, or how they have behaved in past disputes. In practice, the licence is the start of check 1, not the end of verification.
What if the supplier refuses an inspection?
Treat it as a failed check, not a negotiation. A supplier who will not accept a pre-shipment inspection while holding a 70% balance is telling you something about how a claim would be handled after delivery. If they accept inspection but want it after the balance, propose a third-party inspector paid by you, with the report as the release condition — that is the standard structure and most factories accept it.
Should the deposit go to a personal account if it is cheaper?
No. Paying a personal account removes your ability to prove who received the money, and it usually means the entity you contracted with is not the entity handling the order. Any legitimate supplier can invoice and receive payment in the company name shown on the business licence.
How do I check litigation records if I do not read Chinese?
Use the English interface of a commercial mirror such as Qichacha or Tianyancha, which summarises lawsuits, enforcement records and abnormal-operation flags. For a definitive check, the official registers are China Judgements Online and the dishonest-debtor register; both accept a company name, and a screenshot of an empty result is worth keeping in the file.
Does a low price mean the supplier is a scam?
Not by itself. It means one cost has been removed, and you should find out which: material grade, wall thickness, packaging, certification, or the margin of a trader who is not the factory. Ask for the cost breakdown by component and compare it line by line with a second quote — that is a faster answer than any reputation check.
What does verification cost if I use an agent?
With us it is inside the sourcing commission — 6% up to 5,000 USD, minimum 60 USD, stepping down to 2.5% above 50,000 USD — plus 150 USD per person-day if an on-site inspection is needed. If you already have a supplier and only want checks 1–5, tell us; we quote that as a standalone service rather than a commission.