Feb 02, 2020 - 10:27 PM
Thanks for your question and our apologies for the delayed response. Let me answer this question for you.
You come across a Chinese supplier online. The organization looks alright. There’s potential for a business opportunity that could really take off. BUT there are many scams, fakes, and just plain bad Chinese suppliers out there to watch out for. So how do you make sure you’re doing business with a legitimate supplier you can trust?
When you’re verifying a potential supplier you are essentially looking at these two aspects:
Does the supplier have the ability to produce the products you want to buy?
Is the company a legitimate business with good reputation and not a scam or business on the verge of bankruptcy?
Here are 10 ways to find & verify Chinese suppliers you can trust
1. Use search engines & Chinese suppliers’ directories Open Google or Bing and search “[company name] + scam,” “[company name] + dishonest,” and a few variations. Other distributors and retailers who had a bad experience with China wholesale suppliers often try to leave a trace about it on the web.
many B2B marketplaces usually offer verification services such as this one provided by Alibaba, so it makes your life a lot easier when it comes to determining if you can trust a particular supplier or not.
2.Make a phone call Make a phone call to the China supplier’s landline and ask for the company registration number and business license number while you’re at it. An alarm should sound off in your mind if a supplier only has a mobile number and not a landline.
3. Check business licenses Chinese suppliers have to register with the Chinese government authorities and obtain a unique company registration number. If your supplier is unable to provide you a unique company registration number, it's too risky to continue dealing with them.
4. Ask for references To verify the supplier’s financial credit worthiness, ask for their bank’s reference letters. To check up on the supplier’s track record in producing top-quality items, ask for their previous customers as a reference and don’t hesitate to contact them too.
5. Get a sample Whether you’re buying wholesale clothing in China or any other product, ask for a sample item – even if you have to pay for it. When you have a sample in your hands, you can check the quality to ensure the product is exactly what you are looking for.
6. Money matters While we're on the topic of money, when it comes to payment, tell your potential China suppliers that you want to get your products picked up by your local agent from their address, and that they will pay cash on delivery. See if they allow for this. Scammers will never agree to it but real legit suppliers will.
7. Conduct factory audits (or at least pretend to) Factory audits are the right tool to verify a supplier’s claims about their production capability. Most quality control firms and some sourcing agents can audit a factory based on a checklist that corresponds to your needs.
8. Make good use of databases Search through this database of the Chinese Supreme Court. Type in the Chinese name of your supplier and see if you find it there. You will be able to find out if they have been given a sentence and if they failed to pay damages. Unfortunately, this site is available only in Chinese. However, a Chinese contact or your Chinese sourcing agent should be able to help you with this translation step.
9. Background checks on the cheap You can order a report from third-party authentication services such as GloBIS, where their business credit report service will provide information on your potential Chinese supplier, including legal representatives, shareholders, business scope, financial records from the last three years, and other information.
10. Visit the company or factory in person The best way to reduce fraud (regardless of whether you’re trading online or offline) is for buyers and sellers to conduct proper due diligence and research before entering any transaction. Be meticulous with this verification process, and you will know if your potential supplier can be trusted.
Hope you find this information useful.