5 things you should note in checking Chinese suppliers

Some companies, including Alibaba Gold members, can be scammers. If you do business with illegitimate companies or source products sold illegally, there will be no law to protect you, this is why it is very important to verify that your provider is legitimate and that it has the ability to supply products you need.

Below are five things you should keep in mind when you check by yourself a supplier from China or any country in Asia. If you have any doubt due to language barrier, you can consult our Chinese business translation services.

checking chinese supplier

We in China generally use the following sites to check Chinese suppliers:

www.yp.net.cn
www.chinaeall.com
www.cnaic.org.cn
www.114win.com

Unfortunately there is no English version of these websites, you might need our additional value-added service to guide you through the process, it also happens that some companies, although they are very serious, are not registered in these sites, therefore you need to go a bit deeper in the verification:

The best way to verify a supplier is to visit it by yourself or instruct an agent of inspection and verification who will do an audit on your behalf. You can also validate their legal registration data in China. During this journey, you might need our professional Chinese interpreting services.

Some important points to check are:

1. Contact data

Most ghost companies provide a direction that is not consistent with the location / office where they do business. When you call some of them, they will not answer the phone or just give a number of mobile (cellular) or home phone. All the above are bad signs.

2. Legal registration numbers and registration on the web

Most of hosted websites in China must have a number of ICP (Internet Cache protocol) representing the company that registered the website, the name must match that of the company which sends you a quote and the bank account name in which the company will receive the payment.

Each Chinese company must be registered and possess a unique registration number or license to operate and do business. If the company which wants to do business refuses to give you this license or gives you a license that is clearly different from the purpose of the enterprise (e.g. a company claiming to sell original PS3 when the license says it is engaged in agriculture) must be scammers.

It is always advisable to give a call to local authorities with the number provided. The “Bureau of Industry & Commerce” is the only authorized orgnization in mainland China to legally register companies. For example, any company legally registered in Shenzhen may be verified by calling the local office of industry and commerce: http://www.szmqs.gov.cn/ Tel: 86-0755-12315,12358,12365,12330,12331, the only problem is that your query should be directly in Chinese language, as local government officials will not necessarily be able to assist you in English.

3. Ridiculously cheap prices

Unfortunately we have seen dozens of entrepreneurs ripped off with this, especially in the electronics sector.

If prices are too low to be true, chances are they are not true. If the price you have been quoted is too low, you will have to further investigate to find out why prices are so low. Some Chinese companies are profiting from the lack of care of foreign buyers in specifications, Nokia is not the same as Nubia or Nukia, for example. Likewise, each specification must be explained and understood fully as misunderstandings are common and very costly.

You must at all times explain in detail the specifications to the supplier from whom you want to buy and request a pro forma invoice or formal quotation describing without errors or omissions quantities and specifications and payment data. All information on the pro forma invoice must be consistent with the data from the company you verified.

4. Payment and shipping

Scammers will never accept formal means of payment such as telegraphic transfer T / T or letters of credit. You should be aware that payment is always made to an account of the same company that sent you the quote. It is also warning signals if the supplier requests payment via Western Union or Paypal.

Here I do not mean that payments via WU or Paypal are surely scams, but you need to be cautious and know well the supplier before committing a prepayment using these payment methods, the best way to meet a supplier is pre-verifying it.

5. After you have made the order in China

Once you have selected a supplier that meets your requirements and is trained to export to your country then you need to pay an advance of no more than 30% of the value of the purchase, once this is done the supplier will prepare your order in previously agreed time and it is recommended that you hire an agency for inspection before releasing 70% of the remaining payment.