How to Verify a Chinese Supplier Before You Pay

The moment a deposit leaves a Kenyan bank account for China, your leverage is gone. Chasing a US$6,000 loss through a Chinese court from Nairobi is not realistic, and no amount of angry WhatsApp messages recovers a wire. That is why you verify a Chinese supplier before you pay, not after something goes wrong. Most of the checks below take under an hour, cost nothing, and eliminate the great majority of bad counterparties. Experienced buyers use exactly these steps to verify Chinese supplier claims before any money moves.

Start with the business licence, not the website

Ask for a photo or scan of the business licence (营业执照). Every registered Chinese company has one, and any legitimate supplier will send it within minutes. It carries the information that matters:

• The Unified Social Credit Code, an 18-character alphanumeric identifier
• The registered Chinese legal name, which is the only name with legal standing; the English trading name on the website means nothing
• The legal representative, registration date, registered address and status
• The business scope (经营范围), which states what the company is permitted to do
• Registered capital, which may be subscribed rather than actually paid in

Cross-check the code and name on the National Enterprise Credit Information Publicity System at gsxt.gov.cn, the official government registry. It is free and Chinese-only, so run it through a translator, or use a commercial database such as Qichacha or Tianyancha, which also show litigation history, shareholder changes and operating abnormality flags.

Three things should match exactly: the name on the licence, the name on the proforma invoice, and the beneficiary on the bank details. Where they do not, there is sometimes an innocent explanation, because many small factories lack import and export rights and legitimately ship through an export agent. Fine, but make them state it in writing and confirm which entity you are contracting with.

Factory or trading company, and how to tell

Neither is inherently better. A trading company is genuinely useful when you are combining several product lines, want a lower MOQ, or need someone who answers email at Kenyan hours. What you must not do is pay factory-direct prices while unknowingly funding a middleman margin of 3 to 10%, or lose the ability to fix a quality problem because you cannot reach the people making the goods.

Ways to tell:

• Read the business scope. Manufacturing companies list production or processing activities; pure traders list wholesale and import/export.
• Ask a production question a trader cannot answer offhand: what tonnage of injection moulding machine runs this part, what is the cycle time, how many sewing lines, what is the tooling cost and who owns the mould.
• Ask for the mould or tooling ownership in writing if you are paying for it.
• Check the registered address on satellite imagery. An industrial park is a good sign; a unit in a downtown office tower means a trading office.
• Compare the licence address with the address on the test reports and the shipper name on past bills of lading.

Audit reports, certificates and what "verified" really means

Marketplace badges are frequently misread. Gold Supplier and similar tiers are paid subscriptions, not audits. What has substance is a third-party assessed supplier report issued by SGS, TÜV, Bureau Veritas or Intertek. Ask for the full PDF rather than the summary page, then check the report number directly with the issuing body.

Apply the same scepticism to product certificates. On any ISO 9001, BSCI, CE, RoHS or FCC document, look at four things: the issuing body, the certificate number, the exact scope of what was certified, and the validity dates. Then confirm the certified entity is the same legal name as on the licence. A certificate held by an affiliated company, or covering a different product family, protects you from nothing. Reputable issuers keep online verification databases; use them.

For Kenya specifically, ask whether the supplier has exported to East Africa before and whether they can support KEBS Pre-Export Verification of Conformity. A factory that already holds test reports to the relevant standards will save you weeks and a destination-inspection penalty at Mombasa. Suppliers listed on Shopbuddy have had their licence and trading history checked before they appear, which removes this first layer of work.

Verify a Chinese supplier with a live video call and an inspection

Book an unscripted video call during Chinese working hours and ask them to walk you through the premises: the sign at the gate, the licence on the office wall, the production line running, the raw material store, the finished goods warehouse. Ask them to pan slowly and to hold the camera on the machine nameplates. A real factory manager finds this mildly tedious; a fraudster finds a reason to postpone.

For anything above roughly US$5,000 in order value, pay for independent eyes on the ground:

• A pre-shipment inspection typically costs US$250 to US$400 per man-day and is carried out at AQL 2.5 for major defects and 4.0 for minor, the standard for consumer goods.
• A factory audit runs roughly US$500 to US$1,200 and covers equipment, capacity, quality systems and workforce.

Make the inspection a contractual condition of the balance payment. Suppliers who know an inspector is coming behave differently during production.

Order a sample and treat it as a test

A sample tells you about the product and about the company. Pay for it, and note how they handle the process: response time, whether they answer technical questions directly or deflect, whether the sample matches the specification you sent or something close enough.

Send a written one-page specification first, then keep the approved unit as a signed golden sample and reference it in the purchase order. Where samples come from a different production run than your order will, ask for pre-production samples from your own materials before mass production starts.

Structure the payment so a bad outcome is survivable

Verification reduces risk; payment structure caps it.

• Standard terms are 30% deposit, 70% against a copy of the bill of lading. A three-way split of 30% deposit, 40% after inspection and 30% before shipment is stronger still.
• Never pay 100% in advance to a supplier you have not worked with.
• Pay to a corporate bank account matching the licence name. Never to a personal account, personal Alipay or WeChat.
• For orders above about US$50,000, use a letter of credit at sight and accept the bank charges.
• If you use escrow, whether Trade Assurance on a marketplace or Shopbuddy's buyer protection, keep the entire transaction inside it. Protection only applies to payments that went through the system.
• Guard against invoice fraud. If an email arrives mid-order announcing new bank details, assume the mailbox is compromised until you have confirmed the change on a video call using contact details you already held.

Red flags that should stop the order

• A price far below every other quote you received for the same specification
• Pressure to pay today for a "price valid until Friday" or a fake stock shortage
• Bank details in a personal name, or a beneficiary in a third country introduced late
• Refusal to do a live video walkthrough of the premises
• A registered address that is residential or a small office with no plant
• A company registered only months ago claiming twenty years of experience and large export volumes
• Vagueness in writing: no specification, no lead time, no defect remedy in the proforma invoice
• Website images that reverse-image-search to another company's factory

One weak signal on its own means little. Free email domains such as 163.com or qq.com are normal for genuine Chinese factories. Two or three red flags together mean walk away.

A verification routine you can actually run

Get the licence and check the code on the government registry. Confirm licence name, invoice name and bank beneficiary all match. Establish factory or trader from the business scope and two technical questions. Verify any certificate directly with its issuer. Do a live video walkthrough. Buy and test a sample against a written specification. Book a pre-shipment inspection. Pay in stages to a corporate account, through escrow where possible.

That is a couple of hours of work spread over a week, and it is the difference between an import business and an expensive experiment. Do it once per supplier, keep the file, and every reorder afterwards is fast.