Due Diligence is Non-Negotiable
Every year, international buyers lose millions to unverified Chinese suppliers. The good news? A systematic verification process can eliminate 90% of these risks. Here’s our proven framework.
Step 1: Business License Verification
Every legitimate Chinese company has a Business License (营业执煇). Ask for a clear copy and verify:
- Company name matches their website/letterhead
- Registered capital indicates financial capacity
- Business scope includes your product category
- Registration date — beware of companies less than 6 months old
You can cross-check via China’s National Enterprise Credit Information System (gsxt.gov.cn).
Step 2: Factory Visit or Virtual Audit
While on-site visits are ideal, virtual factory audits have become the norm. Request:
- Live video walkthrough of the production floor
- Photos of machinery with your product in production
- Quality control documentation (ISO certificates, QC reports)
- Third-party audit reports (SGS, Bureau Veritas, TÜV)
Step 3: Sample Testing
Never skip sample testing. Order pre-production samples before committing to bulk orders. Key checks:
- Material composition against specifications
- Dimensional accuracy
- Functionality testing
- Packaging quality
Step 4: Secure Payment Terms
This is where a sourcing partner like CSMG adds maximum value. We can structure LC credit sales that protect both buyer and supplier:
- Payment only after quality inspection
- Extended terms preserve your working capital
- Documentation handled by professionals
Step 5: Trade References
Ask for recent export documents (bill of lading, customs declarations) and contact their existing international clients. A legitimate supplier will readily provide references.