The fastest way to lose money sourcing from China is to trust a supplier you have not verified. Verification confirms a factory legally exists, has the capacity to make your product, and operates to acceptable standards — long before your deposit leaves your account.
This guide walks through the checks and audits that separate dependable manufacturers from the occasional bad actor.
Start with the paperwork
Every legitimate Chinese manufacturer has a verifiable business licence showing its registered name, scope and capital. Confirming these basics weeds out brokers posing as factories and traders operating outside their stated business scope.
- Business licence and registration number
- Registered business scope matches your product
- VAT / export licence for international trade
- Bank account in the company's registered name
Types of factory audit
An audit verifies what a supplier claims. Depending on your risk and order size, you might commission a desktop verification, an on-site capability audit, or a full social and quality compliance audit.
- Verification audit — confirms the company is real and licensed
- Capability audit — assesses machinery, capacity and processes
- Quality system audit — reviews ISO and QC procedures
- Social compliance audit — checks labour and safety standards
Inspect production, not just promises
Verification continues through production. Independent inspections at key stages — during production and before shipment — catch defects while they can still be fixed, and confirm the goods match the approved sample.
A pre-shipment inspection on a statistically valid sample is the industry standard final check before releasing balance payment.
Red flags that signal a scam
Most sourcing scams share warning signs. Treat any of the following as a reason to slow down and verify further before paying.
- Prices dramatically below the market
- Requests to pay a personal rather than company account
- Refusal to provide a business licence or factory video call
- Pressure to pay 100% upfront
- Inconsistent company names across documents
Frequently asked questions
How do I verify a Chinese supplier is legitimate?
Check the business licence and registration, confirm the registered scope matches your product, pay only into the company's registered bank account, and ideally commission an on-site audit or video walkthrough.
What is a pre-shipment inspection?
An independent quality check on a random sample of finished goods before they leave the factory, confirming they meet your specification and matching the approved sample. It is your last chance to catch defects in China.
How can I avoid sourcing scams?
Verify the company, use secure staged payments to the registered account, never pay 100% upfront to a new supplier, and be wary of prices that look too good to be true.