A Guide For First-Time Buyers

How to verify a Chinese supplier before you pay.

If this is your first time sourcing from China, the questions below are the ones that actually matter — before you wire a deposit to someone you've never met.

Is your "manufacturer" actually a manufacturer?

The single most common mistake first-time buyers make is assuming the company that replied to their inquiry on Alibaba or a trade show is the factory itself. A large share of "manufacturers" contacting Indian buyers are trading companies — a middleman adding a markup, with no factory floor of their own, no direct control over quality, and no ability to fix a production problem.

The check itself is simple: does the business licence's registered scope of business include manufacturing, or only trading and import/export? A $50 remote check against the company's business licence and scope of business answers this in about 48 hours — see Remote Verification.

Never pay 100% upfront — structure it in stages

Chinese suppliers commonly ask for 30% deposit, 70% before shipment. That is not unusual, but it does mean 100% of your money is gone before you've seen the goods. The buyers who get burned are the ones who never adjust the split, never inspect before the final payment, and never build a document trail that gives them leverage if something goes wrong.

Two free ways to fix this without changing your relationship with the supplier: add an inspection-certificate clause to your purchase order (see our free PO Clause Kit), and have an independent person physically check the goods before you release the balance.

Get on the ground before the goods ship

A photo over WeChat or a video call proves almost nothing — both can be staged, and neither shows you the full production run. The only real way to know an order is right is a physical, independent visit: someone counting the goods, checking them against your specification, and photographing the result with a timestamp and location attached.

This is what on-site factory inspection does, starting at $200/day. See what one actually produces in our sample inspection report.

Red flags worth taking seriously

  • The company can't or won't share a business licence when asked directly.
  • Every production update is a photo with no date, location, or way to verify it was taken recently.
  • Pressure to wire the full balance before shipment, with no room to negotiate a split.
  • No fixed address you can find independently — only a WeChat contact.
  • Refusal to allow a third party to visit before the balance is paid.

A short glossary

FOB (Free on Board)
The supplier's price covers the goods loaded onto the ship at a Chinese port; you arrange and pay for shipping from there.
CIF (Cost, Insurance, Freight)
The supplier's price includes shipping and insurance to your destination port.
T/T (Telegraphic Transfer)
A standard international bank wire — the usual way deposits and balances are paid in China-India trade.
L/C (Letter of Credit)
A bank-mediated payment instrument that only releases funds once specified documents are presented. Many smaller Chinese factories resist L/Cs — see our PO Clause Kit for a practical alternative.
MOQ (Minimum Order Quantity)
The smallest quantity a factory will produce per order — negotiable more often than buyers assume.

Not sure where your order stands right now?

Tell us what you're sourcing and we'll tell you honestly what to check first.

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