Why you verify before you pay, not after
A telegraphic transfer (T/T) to China is, for practical purposes, final. There's no chargeback, no buyer-protection button, and rarely a realistic way to sue a small factory from another country over a five-figure order. That's the entire reason verification has to happen up front. Every check below costs you a few hours and the price of a sample, trivial next to the deposit you're about to send. Run them in sequence and stop the moment one fails. The goal isn't to collect documents; it's to answer one question before money moves: do I actually know who I'm paying, and can they make this.
Step 1: Prove the company legally exists
Ask for the supplier's business license (营业执照). Every registered Chinese company has one, carrying an 18-digit Unified Social Credit Code. Don't trust the photo; verify it against the source. China's National Enterprise Credit Information Publicity System at gsxt.gov.cn is the government registry every legitimate company appears in. Enter the registered Chinese name or the credit code and confirm the legal name, the status (should read 存续, "existing"), the registered capital, and the business scope all match what you were told. A company that simply isn't there, or whose details don't line up with the license photo, ends the conversation. The site is in Chinese and sometimes throws a slider check; a translation tool or a partner on the ground gets you past it.
Step 2: Prove they make what you're buying
A clean license proves registration, not production. Read the business scope (经营范围): a manufacturer's includes 生产 / 制造 / 加工 (manufacturing, production, processing) tied to your product; a trader's reads 贸易 / 批发 / 进出口 (trade, wholesale, import & export) with no making. Then see the floor. Ask, with no notice, for a live video call that walks from the front gate to the machine running your product. A real factory just walks; a middleman stalls or sends a pre-recorded clip. For a sizeable first order, pay a third-party firm (SGS, TÜV, Bureau Veritas, or QIMA) to visit the registered address and report what's physically there: machines, workers, the name on the gate. One trap to skip: an ISO 9001 certificate proves none of this. A trader can hold one, and they're routinely forged or borrowed. (Full breakdown: how to tell a real factory from a trading company.)
Step 3: Vet the payment before you wire
This is where careful importers still lose money. Confirm the deposit bank account is in the same legal name as the business license. An account in a personal name, a Hong Kong shell, or a company you were never quoted by is the single most common scam pattern, so pause and ask why before you send anything. On terms, the standard is a 30% deposit and 70% before shipment against a copy of the bill of lading; resist paying the full amount up front. For a large first order, a letter of credit or a milestone schedule protects you far better than a straight T/T. And know the limit of platform cover: Alibaba Trade Assurance only applies to orders placed and paid through Alibaba. The moment you move to a direct wire, that protection is gone.
Step 4: Put it in a bilingual contract before money moves
WeChat messages and a pro-forma invoice are not a contract you can enforce. Before the deposit, sign an agreement in English and Chinese covering specifications, price, lead time, payment milestones, and the remedy if quality fails. If your product can be copied, and most can, add an NNN agreement (Non-disclosure, Non-use, Non-circumvention) governed by Chinese law and drafted so a Chinese court will actually enforce it. A Western-style NDA in English alone is close to worthless here, because the court that matters is in China. Get this signed before you hand over drawings, tooling files, or your supplier list, not after.
Step 5: Prove the product, then inspect before it ships
Verification ends at the goods, not the paperwork. Order and pay for a sample, approve it in writing, and keep it as the reference for the entire run. Then, before you release the balance, book a pre-shipment inspection: an inspector pulls a random sample from the finished, packed goods and checks it against your spec using AQL sampling, the ANSI/ASQ Z1.4 / ISO 2859-1 standard, commonly AQL 2.5 for general consumer goods. You sign off on that report before the final 70% leaves your account. Sampling first and inspecting against the approved sample is what stops a production run quietly drifting from the thing you said yes to.
Red flags that should stop you
- The deposit bank account is in a different name than the registered company, or a personal account.
- The supplier won't share a business license, or the name on it doesn't match who you've been talking to.
- An unannounced video call is always "not convenient," yet polished photos arrive within minutes.
- Quotes that sit far below everyone else's: the classic setup for a deposit that vanishes.
- Pressure to pay 100% up front, or to keep everything in platform chat and off a signed contract.
Where Mila Sourcing fits
This is the exact sequence we run before you wire anything. License pulled and cross-checked on gsxt.gov.cn, manufacturing scope confirmed, the floor seen on a GPS-stamped video audit, bank name matched, a bilingual NNN signed, sample approved, and a pre-shipment inspection booked, all inside one WhatsApp thread you watch in real time. That's the core of Sourcing Activation and Full Production Management.
Related, if you're vetting a supplier right now: