Supplier Due Diligence Before Wiring Money to China
1 resources tagged with "Due Diligence"
Due diligence in China sourcing means verifying that the company you are about to pay is a real factory and not a trading company or a shell. The practical checks layer up: cross-reference the business license against the official AIC/GSXT registry, confirm the registered capital and scope of business, request a video factory walkthrough, and verify the bank account name matches the legal entity on the invoice. The single most common scam pattern is a payment redirected to a personal or mismatched account.
When you do due diligence, treat a refusal to share the business license or to do a live video call as a disqualifying red flag. Verify that the certifications they show (FCC, CE, ISO 9001) name the same legal entity, not an unrelated company.
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FAQ
How do I check if a Chinese supplier is a real factory or a trader?
Ask for the business license and check the scope of business on the official GSXT national enterprise credit registry. A manufacturer's scope lists production; a trader's lists wholesale and import/export. A live video walk of the production line confirms it further.
What should I verify before sending the first payment?
Confirm the bank account name exactly matches the registered company name on the contract and invoice. Mismatched or personal accounts are the clearest sign of fraud and the most common way buyers lose deposits.
Is a third-party factory audit worth it before a first order?
For any order above a few thousand dollars, yes. An onsite audit confirms the factory exists, has the claimed equipment and capacity, and holds genuine certifications — far cheaper than losing a deposit or receiving goods from an unqualified shop.
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