Supplier Verification: 30-Point Checklist for Importers

Most sourcing failures aren't manufacturing failures — they're supplier verification failures. The factory that produced poorly was actually a trading company. The "verified supplier" turned out to have a fake business license. The quote that seemed too good to be true was indeed too good to be true.

This guide is the verification checklist we run on every supplier our clients are considering. It's organized into five categories: business legitimacy, factory authenticity, production capability, quality systems, and red flags. Working through all 30 points before any meaningful order takes 4-8 hours of effort and prevents nearly every category of supplier disaster.

Category 1: Business legitimacy (points 1-7)

1. Verify business license registration

Every legitimate Chinese business has a unified social credit code (统一社会信用代码) — an 18-digit alphanumeric identifier. Get this from the supplier's business license, then verify it on:

• Tianyancha (tianyancha.com) — most comprehensive Chinese business database
• Qichacha (qichacha.com) — alternative database with similar coverage
• National Enterprise Credit Information Publicity System (gsxt.gov.cn) — official government database

If the unified social credit code doesn't return results, or returns a different company name than provided, the business doesn't exist as represented. This is the most common red flag.

2. Check business registration date

A factory claiming 20 years of experience but registered 2 years ago is misrepresenting itself. Some factories restructure (closing old entity, opening new) for legitimate reasons, but most claims of long history can be cross-referenced with actual registration dates.

Reasonable: registration 5+ years for established suppliers, 2+ years for newer specialized operations.

3. Verify business scope (经营范围)

Chinese business licenses specify exactly what business activities are permitted. The Chinese characters matter:

• 制造 (zhìzào) = manufacturing
• 加工 (jiāgōng) = processing
• 生产 (shēngchǎn) = production
• 批发 (pīfā) = wholesale
• 零售 (língshòu) = retail
• 进出口 (jìnchūkǒu) = import/export
• 贸易 (màoyì) = trade

Real factories have manufacturing/processing/production in their scope. Trading companies have trade/wholesale/import-export. Companies pretending to be factories often have only trading scope.

4. Confirm registered capital

Registered capital indicates the financial commitment of the business. While not paid-up capital (Chinese law allows registered but unpaid capital), the registered amount indicates business scale:

• Under 500K RMB: small workshop, trader, or shell company
• 500K - 5M RMB: small-to-medium factory
• 5M - 50M RMB: established medium factory
• 50M+ RMB: large factory or industrial group

Compare to claimed business size. A factory claiming 500 employees with 100K RMB registered capital is misrepresenting.

5. Check for legal disputes and credit rating

Tianyancha and similar platforms show:

• Court cases (lawsuits as plaintiff or defendant)
• Tax violations
• Administrative penalties
• Credit ratings from various agencies
• Operational status (active, suspended, cancelled)

Multiple recent court cases or any tax violations are warning signs. Some active disputes are normal for large companies (contract disagreements happen), but patterns of litigation suggest problems.

6. Verify export license/qualifications

Companies that directly export need export business qualifications. Check:

• 海关进出口收发货人备案 (Customs Import/Export Consignor Registration)
• 对外贸易经营者备案登记 (Foreign Trade Operator Registration)

Without these, a "factory" cannot directly export — they're using a trading agent for exports, which adds cost and a communication layer. This isn't necessarily disqualifying, but it changes who you're actually working with.

7. Bank account and payment verification

When a supplier provides bank account details for payment:

• Bank account name MUST match registered company name exactly
• Account should be at a major Chinese bank (Bank of China, ICBC, China Construction Bank, Agricultural Bank, etc.)
• Personal accounts (individual names, not company names) are major red flags
• Hong Kong or offshore accounts for mainland Chinese factories warrant scrutiny

Wire fraud where hackers intercept emails and provide alternate "updated" account details is a real risk. Always verify bank account changes by phone or video call with known factory contact.

Category 2: Factory authenticity (points 8-14)

8. Physical address verification

Get the registered address and verify it on:

• Baidu Maps (map.baidu.com)
• Google Maps (often blocked in China but works for verification)
• Satellite imagery

Look for: industrial park location consistent with manufacturing, sufficient size for claimed operation, multiple buildings if claiming integrated production.

Red flags: residential addresses, office buildings only, single small unit in mixed-use area, addresses with no satellite-visible industrial structures.

9. Multiple address consistency

Some legitimate companies have multiple addresses (registered office, manufacturing facility, branch offices). All should be verifiable and consistent in storytelling.

A factory claiming production in one city but registered in another raises questions. Sometimes legitimate (factory built in lower-cost area), but the discrepancy should be explained.

10. Online presence verification

Check supplier's online footprint beyond Alibaba:

• Company website (older domain registration is more credible)
• Chinese social media presence (WeChat business accounts, Weibo)
• Industry directory listings
• News mentions or press releases
• LinkedIn presence of leadership

Established factories have multi-year online footprints. Recent or sparse online presence is a red flag for shell operations.

11. Photos and videos beyond samples

Request photos/videos showing:

• Factory exterior with visible signage
• Production floor with workers and equipment
• Warehouse with raw materials and finished goods
• Quality inspection area
• Office with named team members

Real factories provide these readily. Suppliers who can't provide factory photos beyond product samples should be assumed traders.

Watch for: photos pulled from other factories' websites (reverse image search reveals these), video calls where camera angles strategically avoid facility tours, photos of the same factory used by multiple "different" suppliers.

12. Live video factory tour

Ask for a real-time video tour (WeChat, Zoom, or similar). Real factories accommodate this readily. Things to observe:

• Production lines actually operating
• Quantities of raw materials and finished goods consistent with claimed scale
• Employee count consistent with claims
• Equipment matches what's claimed (can answer technical questions about specific machines)
• Office staff visible and varied
• Multiple sales/operations people, not just one contact

The factory tour reveals reality fast. Trading companies struggle to produce credible live tours.

13. In-person factory visit (or third-party visit)

Nothing replaces in-person visits. If you can't visit personally:

• Use a sourcing agent (we offer this for our clients)
• Hire a third-party inspection company for factory audit ($300-800)
• Send a trusted representative or partner

A factory audit during normal business hours costs $400-1,000 from major firms and provides definitive answers about facility, capacity, equipment, and operations.

14. Geographic clustering verification

Real factories are typically located in industry-specific clusters that make economic sense:

• Furniture in Foshan or Bazhou
• Electronics in Shenzhen, Dongguan, or Suzhou
• Hardware in Yongkang
• Textiles in Shaoxing or Nantong

A "leather goods factory" located in Inner Mongolia or a "smartphone factory" in rural Sichuan is unlikely. Industry clusters exist for supply chain, labor, and logistics reasons. Outliers warrant explanation.

Category 3: Production capability (points 15-20)

15. Production capacity verification

Ask specific capacity questions:

• Monthly production capacity for your specific product type
• Number of production lines
• Number of workers in each department
• Lead time for orders of different sizes

Cross-check answers with claimed factory size. A factory claiming 50,000 units monthly capacity but with 20 workers and one production line isn't credible.

16. Equipment and technology verification

Ask about specific equipment used in your product type:

• Machine brands and models (real production staff know these)
• Production processes used
• Quality testing equipment available
• Decoration/finishing capabilities

Trading companies often can't answer specific production technology questions. Real factory technical staff can describe their equipment in detail.

17. Material sourcing transparency

Real factories know where their materials come from:

• Raw material suppliers (specific companies, not "various sources")
• Quality grade specifications
• Material lead times affecting their production schedule

For your specific product, ask about specific material specifications. Specialists know their materials; traders don't.

18. Product specialization and history

Factories typically specialize. A factory making dozens of unrelated products is suspicious — they're likely a trader pulling from multiple specialized factories.

Real factories: 1-3 product categories, deep expertise in those categories, consistent specialization for years.

Traders: wide product ranges, less depth on any specific product, recent listings of new categories.

19. Reference customer verification

Ask for references — current customers willing to discuss the factory. Real factories often have international references they'll share, with permission.

Be cautious: factories sometimes provide fake references (employees pretending to be customers) or staged reviews. Look for verifiable connections — customers with online presence, customers in your industry you can independently verify.

For major orders, factories supplying named brands (with brand permission) is meaningful.

20. Sample quality vs claims

When evaluating samples:

• Compare to your specifications point-by-point
• Identify any deviations or substitutions
• Test functionality if applicable
• Compare to competitive samples from other factories

The sample quality vs price relationship reveals truth. Premium samples at budget prices suggest the production won't match (the factory is showing you premium hand-made samples, then will produce budget). Budget samples at premium prices suggest poor capability.

Category 4: Quality systems (points 21-25)

21. Quality certification verification

Common certifications to look for:

• ISO 9001 (quality management system) — basic standard for serious manufacturers
• ISO 14001 (environmental management) — increasingly important
• ISO 45001 (occupational health and safety)
• BSCI/SEDEX (social compliance audits)
• Industry-specific certifications (FDA, CE, FCC, etc.)

Verify certificates by:

• Checking certificate numbers with issuing bodies online
• Confirming valid dates (certificates expire)
• Confirming the certificate covers the actual factory location (not just headquarters)

Counterfeit certificates are common — the verification step is essential.

22. Product testing capability

Ask about in-house testing capabilities:

• What products are tested in-house?
• What test equipment is available?
• What quality control inspections occur during production?
• What pre-shipment inspection processes exist?

Real factories with proper QC systems can describe testing equipment by name and brand, explain inspection processes, and provide sample inspection reports.

23. AQL standards and inspection processes

Most consumer goods inspections use AQL (Acceptable Quality Limit) sampling. Ask:

• What AQL standards do you use? (2.5/4.0 is industry standard)
• Who inspects production?
• Can you provide sample inspection reports from recent shipments?

Factories without familiar AQL processes may not actually do meaningful quality inspection.

24. Compliance documentation

For products with regulatory requirements:

• Test reports for required certifications (CE, FCC, FDA, CPSIA, etc.)
• Material declarations (RoHS, REACH, Prop 65)
• Country-specific compliance documentation

Verify test reports:

• Issued by recognized labs (TUV, Intertek, SGS, Bureau Veritas, UL)
• Recent (within 1-2 years for most products)
• Match your specific product specifications
• Verifiable by contacting the issuing lab

Counterfeit test reports are common — particularly for electronics with FCC/CE requirements. Direct verification with the lab is the only definitive check.

25. Production traceability

Ask about traceability systems:

• Can production batches be traced back to material lots?
• Are quality issues investigated systematically?
• What's the protocol for quality complaints from customers?

Mature manufacturers have documented systems for traceability and corrective action. Lack of these systems indicates immature operations and ongoing quality risk.

Category 5: Red flags and final checks (points 26-30)

26. Communication patterns

How a supplier communicates predicts how they'll behave throughout the relationship:

Red flags:

• Pressure tactics to commit before due diligence
• Unwillingness to put commitments in writing
• Inconsistent answers to the same question over time
• Multiple people providing conflicting information
• Major language/communication issues that may impact production
• Reluctance to discuss problems or limitations honestly

Good signs:

• Detailed technical answers to detailed questions
• Honest acknowledgment of capabilities and limitations
• Patient through due diligence process
• Clear, consistent communication
• Multiple team members (sales, technical, quality) accessible

27. Pricing reasonableness

Pricing far below market average is the single most reliable scam indicator:

• 30%+ below median competitive quotes: highly suspect
• Lowest quote among 5+ suppliers: typically the trader, the corner-cutter, or the desperate factory
• Best practice: target 20-40th percentile pricing among reasonable quotes (not lowest)

Combine pricing analysis with verification. Reasonable pricing combined with strong verification indicates genuine factory; suspiciously low pricing despite weak verification indicates scam risk.

28. Payment terms reasonableness

Standard Chinese factory payment terms:

• 30% deposit on PO confirmation
• 70% balance before shipment (against B/L copy or after PSI passes)
• Some flexibility on first-order risk reduction (lower deposits, milestone payments)

Red flags:

• Demanding 100% payment before any production
• Aggressive deposit terms (50-100% upfront) for first-time relationship
• Refusing any buyer protection (Trade Assurance, escrow, LC)
• Asking for personal account payments

Reasonable factories accept reasonable payment terms. Unreasonable demands indicate either inexperience or scam intent.

29. Contract and documentation completeness

A real factory provides comprehensive documentation:

• Detailed proforma invoice with itemized specifications
• Sales contract covering production, payment, shipping, quality terms
• Pre-shipment inspection acceptance
• Commercial invoice and packing list at shipment
• Bill of lading or air waybill
• Country of origin certificate
• Required compliance certificates

Suppliers reluctant to provide written contracts or documentation are operating informally — risky regardless of intent.

30. Trust your gut

After the technical verification, the meta-question: does the entire picture make sense?

Real factories present coherent stories — registered for years, located in appropriate cluster, employing appropriate workforce, equipped with appropriate machinery, providing appropriate documentation, communicating with appropriate professionalism. Things hang together.

Suppliers with inconsistencies, gaps, or cognitive dissonance — even if individual checks pass — often turn out to be problems. The 30-point verification reveals technical reality, but synthesizing the whole picture matters too.

If multiple aspects feel "off" even when checks technically pass, walk away. The opportunity cost of one passed-up supplier is small; the cost of one bad supplier choice can be enormous.

How to use this checklist

For new supplier evaluation, work through all 30 points before placing orders above $5K-10K. The 4-8 hour investment prevents nearly all major sourcing failures.

For larger orders (above $50K), invest more deeply: in-person or third-party factory visit, comprehensive testing of samples, formal contracts with clear quality and recourse terms.

For ongoing supplier relationships, periodic re-verification (every 12-24 months) catches changes:

• Has the factory been sold or restructured?
• Are certifications still current?
• Have any litigation or compliance issues emerged?
• Is the relationship structure still as represented?

We run this 30-point verification on every supplier our clients work with. The investment of time prevents the categorically larger investment in failed orders.

Free downloadable checklist

Use the Supplier Verification Checklist tool to track your verification progress for any specific supplier. The interactive version generates a risk score and lets you email yourself the completed checklist.

For higher-stakes verification or when you can't verify in person, our supplier verification service provides comprehensive third-party verification including in-person factory visits in China — typically $250-450 per supplier with 5-7 day turnaround.

The single highest-leverage thing most importers can do is verify suppliers thoroughly before committing volume. The work is unglamorous but prevents the disasters that destroy importing businesses. Start with this checklist for every new supplier.