Paying a deposit to a Chinese supplier is a trust decision backed by money. You are not just buying a product; you are betting that a company you may never visit will use your funds to make what you ordered. Many deposit losses do not start with a sophisticated scam. They start with a company name that was never checked, a bank account that belonged to someone else, or a factory that was really a trading office. The checks below focus on evidence you can verify before money leaves your account.
Start with the legal entity, not the website
Ask for the full Chinese company name, the unified social credit code, and a copy of the business license. These three items should match the name on the proforma invoice, the contract, and the bank account. A mismatch is not a paperwork problem. It is a reason to pause.
Look up the company on China's National Enterprise Credit Information Publicity System. The site is free and in Chinese, so use a browser translation tool or a local contact. Check four things: whether the company is active, when it was established, its registered capital, and its business scope. The business scope matters. If it says sales of hardware but not manufacturing, you are probably dealing with a trader. A trader can be useful, but you should know that the production is outsourced and that responsibility for quality sits with someone else.
Check for abnormal operation listings, legal disputes, and frequent changes of address or legal representative. A young company is not automatically risky. A young company with no export history, a residential address, and pressure for a large deposit is a different story.
Check whether the factory is a factory
Factory photos are easy to copy. Ask for the address of the production site, not the sales office. Then ask for a live video call. The person should walk through the production line, show the machines running, show raw material and finished goods, and show the QC area. A five-minute call from a showroom tells you little. A call that moves through the workshop tells you more.
Compare the production address with the business license address. Many suppliers are trading companies that work with partner factories. That is common. The problem is when a trader claims to own a factory, charges factory-level prices, and cannot control delivery. If ownership matters to you, ask for the lease or property documents and have someone local visit.
If you cannot travel, hire a local inspector for a factory visit. A visit costs far less than a lost deposit. The inspector should confirm the sign at the gate, the address, the production equipment, the staff count, and the warehouse. Satellite maps can help, but they do not replace a visit.
Verify the bank account before you send the deposit
This is where many buyers lose money. The beneficiary name on the bank account must match the legal company name on the business license and contract. Be very careful with personal accounts, accounts in another company's name, and Hong Kong accounts that are not explained in writing. A supplier may say the factory account is inconvenient, so please pay to a personal account. That is a stop sign.
Ask for bank details on company letterhead with the company chop. Then confirm those details through a second channel. Do not confirm them only by replying to the same email thread. Email accounts get hacked, and fraudsters can send a realistic message with new bank details just before payment. Call a known number, use a video call, or ask your local contact to check.
Use a bank transfer that leaves a record. Avoid crypto and cash. For a first order, a small test payment can make sense, but confirm the fees and the account name before you send it. No legitimate supplier should refuse to put bank details in the contract.
Use public records and export clues
Beyond the business license, check commercial databases for legal cases, pledged assets, and abnormal operations. These records are not always complete, but they save time. If a company has many contract disputes or a history of changing names, ask why.
Ask for the customs registration code and recent export documents. A bill of lading, customs declaration, or export invoice with sensitive details removed can show that the company actually exports the kind of product you are buying. Match the product description and the destination. Do not accept a generic certificate pack with no company name.
Certifications deserve their own check. CE, RoHS, FDA, ISO, and similar documents are easy to fake. Look up the certificate number on the issuing body's website. Check that the company name, product model, and standard match. A test report with no model number and no supplier name proves little.
Test the supplier's technical fit
A supplier that cannot answer technical questions is a risk, even if the price is good. Ask about material grade, tolerances, packaging, lead time, and QC checkpoints. Ask for the engineer or QC contact, not only the salesperson. If every answer is vague or copied from a catalog, you have not verified the capability.
Language is a real barrier. A good factory may have weak English, and a smooth sales office may have no factory. That does not mean every weak English reply is a scam. It means you need a Chinese-speaking person to ask the right questions. Ask for photos of similar orders and a simple process flow. A supplier that makes the product should be able to explain how it is made.
Sample first, then inspect production
Ask for a sample from normal production, not a special golden sample. Compare it with your specification and keep photos and measurements. Pay for the sample through a traceable method. If the sample is poor, the mass production will not be better.
For the bulk order, book a third-party pre-shipment inspection before you release the balance. Define the inspection standard and the AQL level in the contract. The inspector should check quantity, function, appearance, packaging, labels, and carton marks. If the supplier refuses third-party inspection, treat that as a serious warning. A factory with nothing to hide should accept a standard inspection.
Structure the deposit and contract to limit exposure
A deposit is normal. Losing control of it is not. Put the product specification, quantity, price, lead time, packaging, QC standard, deposit amount, balance trigger, and warranty in the contract. Add a clause for late delivery and a clause for failed inspection. Keep the proforma invoice with the company chop and the bank details attached.
A 30 percent deposit is common, but it is not a rule. For a first order, negotiate a lower deposit or a milestone payment. Avoid paying 100 percent upfront. For larger orders, ask your bank about a letter of credit or use an escrow service if the supplier accepts it. The goal is not to make the contract complicated. The goal is to make each payment depend on a documented step.
Red flags worth stopping for
| Red flag | Why it matters | What to do |
|---|---|---|
| Personal bank account | Money may not reach the company | Ask for a company account or walk away |
| Company name mismatch | The entity may not be the one you checked | Match license, contract, invoice, and bank name |
| Bank details changed by email | Common fraud pattern | Confirm by phone or video with a known contact |
| Refuses video or visit | Factory may not exist as described | Use a local inspector before paying |
| Price far below market | Could be bait or lower materials | Compare specs, not just price |
| Certificate with no verifiable number | Document may be fake | Check with the issuing body |
| Pressure to pay today | Reduces your time to verify | Slow down and complete checks |
| No export documents | May not have export experience | Ask for redacted customs or shipping records |
A practical verification sequence
- Collect the business license, Chinese company name, credit code, and bank details.
- Check the company on the national credit system and a commercial database.
- Confirm the production address and request a live video walk-through.
- Match the bank account name to the legal company name.
- Order a production sample and test it against your spec.
- Put specs, inspection, delivery, and payment terms in the contract.
- Book a pre-shipment inspection before releasing the balance.
No single check proves a supplier is safe. The pattern matters. A company with a clean license, a real workshop, a matching bank account, a good sample, and a willingness to accept inspection is a very different risk from a company that hides its address and asks for a personal transfer.
If you need a local team in China to check the license, visit the factory, confirm the bank account, and inspect before you release funds, Globesino can handle that on the ground.