How to Verify a China Supplier Before Paying a Deposit: 5-Step Checklist
Before sending a deposit to a new China supplier, verify five things in order: business license and company name match, bank beneficiary match, live video factory walk-through, locked production specs and sample approval, and a third-party pre-shipment inspection plan before the final balance.
Before sending a deposit to a new China supplier, verify five things in order: business license and company name match, bank beneficiary match, live video factory walk-through, locked production specs and sample approval, and a third-party pre-shipment inspection plan before the final balance. Each step costs significantly less than one bad shipment.
Why supplier verification matters before the deposit
Every year, importers lose deposits to factories that turn out to be trading companies, or worse — shell operations that disappear after payment. The 30% deposit is the biggest financial risk point in the entire sourcing process. Once that wire transfer leaves your account, recovery is difficult and expensive.
The good news is that a structured verification process before payment catches most red flags. Here is a practical 5-step checklist used by experienced importers.
Step 1: Verify business license and company name match
Ask the supplier for their Chinese business license (营业执照). The English company name on Alibaba or their website must match the legal Chinese name on the license. Run the license number through China's National Enterprise Credit Information Publicity System (国家企业信用信息公示系统) — it is free and public.
Step 2: Confirm bank beneficiary name matches the company
Before sending any payment, confirm that the bank account beneficiary name matches the business license exactly. Many scams use a different trading company's bank account. A mismatch is a major red flag — ask for an explanation or walk away.
Step 3: Request a live video factory walk-through
A quick WeChat video call through the production floor tells you more than any certificate. Ask to see the assembly line, warehouse, and quality control area. A real factory can show you on demand. A trading company will hesitate, make excuses, or show a prerecorded video.
Step 4: Lock production specifications and approve samples
Before the deposit, agree on written specifications covering materials, dimensions, colors, packaging, and labeling. Have the factory produce a pre-production sample (PPS) and get it approved in writing. This sample becomes your benchmark for the entire production run.
Step 5: Plan a third-party inspection before the final balance
Include a pre-shipment inspection (PSI) clause in your purchase order. The inspection happens after production is complete but before you pay the remaining 70% balance. A third-party QC team visits the factory, random-samples your goods using AQL standards, and reports any defects with photo evidence before the container ships. This single step prevents most bad shipments.
How CloudSpects helps with supplier verification
CloudSpects offers supplier verification services starting from factory document checks and video confirmation, up to full on-site audits and pre-shipment inspections. We are based in China and can visit any supplier within 48 hours.
Pre-shipment inspection pricing starts at $169 per man-day. No long-term contracts — pay per order.
Frequently asked questions
What if the supplier refuses a third-party inspection?
This is a common red flag. A legitimate factory producing quality goods has nothing to hide. If they refuse inspection before shipment, consider it a strong warning sign.
Can I verify a supplier without traveling to China?
Yes. A combination of business license check, video call walk-through, sample testing, and third-party inspection covers most risk without needing a flight to China.
How much does a pre-shipment inspection cost?
CloudSpects charges $169 per man-day for standard AQL pre-shipment inspections. Most orders require 1-2 inspector days depending on order quantity and product complexity.
Frequently asked questions
What if the supplier refuses a third-party inspection?
This is a common red flag. A legitimate factory producing quality goods has nothing to hide. If they refuse inspection before shipment, consider it a strong warning sign.
Can I verify a supplier without traveling to China?
Yes. A combination of business license check, video call walk-through, sample testing, and third-party inspection covers most risk without needing a flight to China.
How much does a pre-shipment inspection cost?
CloudSpects charges $169 per man-day for standard AQL pre-shipment inspections. Most orders require 1-2 inspector days depending on order quantity and product complexity.