Suppliers
Seven checks before you pay a factory
What to establish about a supplier while the money is still yours.
Проверено
A deposit to a Chinese company you do not know is the moment after which almost no leverage remains. Everything that can be established should be established before the transfer — and almost all of it takes only a few days.
The minimum set
- 1Company registration: does the legal entity exist, how old is it, who owns it.
- 2Export rights: not every maker is allowed to ship abroad on its own account.
- 3Factory or trading company — the most common misrepresentation, and correspondence never reveals it.
- 4Whether the registered address matches actual production.
- 5Line of business: does the company make your category of goods, or is this its first attempt.
- 6Capacity: can it handle your volume within your deadline.
- 7Payment terms: is the supplier insisting on payment in full up front.
CarefulFull prepayment is not proof of fraud in itself, but it is a term that leaves you with no leverage at all once the money has gone. The norm is a partial deposit with the balance after the finished batch has been inspected.
The first five can be checked against documents and public registries. The sixth — and the factory-versus-agent question — is only settled reliably by a site visit: a website, a catalogue and a quick-replying sales rep are equally available to a trading company reselling someone else’s output at a markup.
TipAsk for a video call from the production floor, not from a meeting room. A refusal, or endless rescheduling, is an answer in itself.
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Suppliers and factories
Finding, comparing, negotiating and vetting the company before you pay.