How to verify a Chinese factory before you send a deposit

Most first orders fail in the boring middle: the price looked right, the sample was fine, and the deposit went to an account nobody verified. These are the checks we run before money moves, in the order we run them.

1. Match the legal entity to the factory floor

Ask for the business licence (营业执照) and read three fields: the company name, the registered address, and the scope of business. A trading company will show a scope that includes sales or import-export, not manufacturing, and its address will be an office, not a workshop.

The licence number should also let you check for abnormal-operation records. A company that has been listed as “unable to be contacted” within the last two years is a stop signal, regardless of how good the sample was.

2. Confirm the factory exists where it says it does

A live video call while someone walks the floor takes fifteen minutes and settles more questions than a PDF brochure. Ask to see the loading bay, the machine hall and the QC bench in that order. Then ask them to hold the phone in front of the licence displayed on the wall — Chinese factories are required to post it.

3. Ask for the export record, not the certificate

Certificates are easy to buy or borrow. Export records are not. Ask which markets the factory ships to, which customers it has served for more than three years, and whether it can show a redacted bill of lading from the last twelve months. Reluctance here is more informative than a glossy catalogue.

4. Verify the bank account by phone, not by email

Payment fraud in Chinese sourcing usually involves a genuine invoice with a substituted bank account. Call the factory on a number you obtained independently — the one on the licence or on the company website, not the one in the email thread — and read the account name and number back to them.

5. Test the quality system with a specific question

“Do you have QC?” produces a yes. “How many QC staff do you have, at which process steps do they inspect, and can I see last month’s defect log?” produces an answer you can evaluate. A factory with no in-process inspection is relying on the final check to catch problems that were cheaper to prevent.

6. Look at who else depends on them

A factory with 80% of its revenue from one buyer has no capacity to protect your deadline when that buyer pushes. Ask about customer concentration and current capacity utilisation. If the answer is “we are very busy”, ask what that means in weeks of backlog.

What good looks like

A real factory answers all six questions within a day, sends documents without being chased twice, and does not mind a video walkthrough. The ones that stall are not necessarily fraudulent — but they are telling you how the order will be handled.

The cheapest way to avoid a bad deposit is to spend two days before sending it.