How to verify a factory in China before you pay
By Martín Novoa, Founder of Dinasty Partners · Updated · 6 min read
Short answer
To verify a factory in China, ask for its business license and look it up in China's official company registry, confirm its business scope includes making your product, visit or audit it, approve a physical sample, pay a deposit with the balance against inspection, and inspect production before it ships.
Is it a factory or a middleman?
Many suppliers that present themselves as factories are trading companies. That isn't always bad, but they add margin and put distance between you and whoever actually makes the product. How to tell them apart:
| Signal | Factory | Trading company |
|---|---|---|
| Catalog | Few product lines, highly specialized | Hundreds of products across unrelated categories |
| Business license | Business scope includes manufacturing | Business scope says trading or import-export |
| Visit or video call | Shows its own production lines | Avoids showing the plant, or shows someone else's |
| Technical questions | Answers on materials and processes | Has to check and takes time |
The 6 checks before you pay
- Business license: ask for a photo of the document and note the Unified Social Credit Code (18 characters).
- Official registry: look up that code in China's National Enterprise Credit Information Publicity System and compare name, address, registered capital and business scope.
- Visit or audit: someone you trust at the plant, or a third-party audit.
- Physical sample: approved in writing, with photos and measurements, before production.
- Staged payment: the norm is a 30% deposit and 70% against inspection or shipping documents.
- Pre-shipment inspection: check the finished goods with AQL sampling before the container is closed.
A verified-supplier badge on a marketplace doesn't replace these checks: it certifies that the company exists, not that it will make your product well.
Red flags
- They ask for 100% upfront or change the bank account at the last minute.
- The payment account is in the name of an individual or a different company.
- A price far below every other quote.
- They refuse to make a sample, or charge a disproportionate price for it.
- They don't want an inspector on site before shipment.