Supplier check before the deposit: a Chinese supplier verification checklist

VerificationSupplier check before the deposit: a Chinese supplier verification checklistArkadii VakhnovskyiJune 20, 2026 · 5 min read · Updated June 20, 2026The deposit is the point of no return. While the money is still with you, you have leverage: you can negotiate, set conditions, walk away. The moment the deposit is gone, that leverage almost disappears and the risk becomes yours.This checklist is built to be worked through point by point before you wire anything. Copy it, tick off every item. If even one of the red flags at the end is left unchecked, do not pay until you have cleared it up.Step 1. Legal vetting of the companyFirst, confirm the company actually exists and is what it presents itself to be.A scan of the business license (营业执照) has been obtainedThe full legal name (in Chinese) matches across the website, the invoice and the bank accountThe Unified Social Credit Code (18 characters) has been verified in the state registry gsxt.gov.cnThe company has been checked through Qichacha (企查查) or Tianyancha (天眼查) — history, owners, related legal entitiesThe registration date matches the claimed experience (not "15 years in the market" for a company registered six months ago)The registered capital is adequate to the scale of the promisesThere are no alarming statuses — lawsuits or an "abnormal" company status in the registryStep 2. Factory or intermediaryConfirm who you are actually dealing with — both your price and your control over quality depend on it.The license's scope of business (经营范围) contains manufacturing terms 生产 / 制造, not only 销售 / 贸易The product range is narrow and focused, not "steel + panels + furniture + electronics"Technical questions about the product get fast, specific answersThe address is a production site in an industrial zone that is visible on satellite mapsWe cover how to tell a manufacturer from a trader with confidence in a separate guide, Factory or intermediary: how to tell a manufacturer from a trader.Step 3. Product, quality and capacityVerify that the factory can make exactly your product at your volume.Production capacity backs your volume and lead time (number of lines, monthly output)Relevant certificates are in place (ISO 9001 plus product certificates — IEC/TÜV, CE/UL, mill certificate and so on) with a number that can be verified with the issuerA written specification has been agreed: material, dimensions, tolerances, markingA reference sample has been approved and sealed to check the batch againstThe MOQ and production lead time are fixed in writingStep 4. Physical verification (audit)Video and photos prove nothing. Only a fact on the ground confirms reality — and it must come before the balance payment.An on-site audit has been carried out or scheduled (in person or by a third-party inspector) before paying the 70% balanceThe factory address matches the address on the licenseIt is confirmed that the equipment belongs to the company and that production really is runningThe export history / customs data has been checked under the company's own nameWe lay out the full protocol for finding and verifying a factory in our foundational guide, How to find and verify a manufacturing factory in China.Step 5. Contract and documentsEverything agreed in words has to be on paper — otherwise it does not exist.A contract or proforma invoice (PI) with the full specification has been signedThe contract states the quality standard and the right to a pre-shipment inspection (PSI / AQL)The delivery terms are clearly stated (Incoterms — FOB / CIF / EXW)Penalties and the course of action for defects or delays are spelled outThe currency, payment method and payment schedule have been agreedStep 6. Payment and bank details — the most critical partMost financial losses when importing from China are not about defects, but about the payment going to the wrong place.The payment terms are reasonable (for example, a 30% deposit / 70% before shipment), not 100% prepaymentThe beneficiary name on the account matches the company's legal name on the license exactlyThe payment does not go to the director's personal account or to a sudden third-party / Hong Kong accountAny change of bank details ("our bank has changed") has been verified through a separate channel — a call to a known number, not a reply to the same emailThe details on the invoice have been reconciled against the business licenseRed flags: if even one applies, do not payThe company refuses to provide the business license or the factory addressThe price is noticeably below market ("too good to be true")Pressure for full prepayment or payment to a personal / third-party accountIt cannot answer technical questions about the productIt refuses a visit or an independent inspectionThe names on the license, the account, the website and the email domain do not matchOne such item is a reason to ask more questions. Two or more together are a reason to stop the payment.Who does this for youWorking through the whole checklist yourself is doable, but it takes the language, access to Chinese registries and a person who will physically walk into the factory before the deposit leaves. This is exactly what Silk Way Sourcing handles from Jinan: we read the license, reconcile the bank details, confirm the factory's status and inspect production on the ground, then run the deal end-to-end to Ukraine, the CIS, Africa and the Middle East.Written byArkadii VakhnovskyiFounder & CEOHow we write and check our guidesKeep readingRelated articlesVerificationFactory or middleman: how to tell a manufacturer from a traderWhy most "factories" in China are actually trading companies, what a middleman really costs you, and the signals that reveal a real manufacturer versus a trader before you ever pay a deposit.Arkadii Vakhnovskyi·Jun 20, 2026·6 min readRead articleVerificationHow to find and verify a manufacturing factory in China: a guide for wholesale importersA step-by-step guide: where to find real factories in China, how to tell a manufacturer from an intermediary, verify the business license, audit the factory, and pay for your order without fraud risk.Arkadii Vakhnovskyi·Jun 20, 2026·9 min readRead articleSourcing something from China?Put this into practice with a team on the ground in Jinan. 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