How to Verify a China Supplier Before Paying a Deposit

You found a supplier on Alibaba. The price is right, the photos look great, MOQ is doable. You're about to pay a 30% deposit.

Stop. That deposit is the moment 90% of sourcing scams happen.

Here's the 15-minute vetting routine I run before any deposit leaves my account. It's saved me from at least one fake factory — and it's the same routine I packaged into templates for importers managing 3-20 suppliers.

Red Flag 1: The company that registers under a different name

Every Chinese company has a business registration. Two free databases check it:

tianyancha.com / qcc.com (both have English interfaces)

Search the supplier's name. Then check: does the name on the storefront match the registered entity?

If the Alibaba store says "Shenzhen Xinyuan Electronics" but the registration says "Shenzhen Yucheng Trading Co." — that's a trading company, not a factory. Walk away or renegotiate the price down 40%.

Red Flag 2: The "500-employee factory" with 4 insured workers

This is the single best trick in China sourcing. Chinese law requires factories to pay social insurance for employees.

On tianyancha/qcc, look at the social insurance participation count (参保人数).

A factory claiming 500 workers but showing 4 insured employees is a shell company. The real factory has insurance counts that roughly match their claimed size.

Red Flag 3: The product photo that doesn't exist on 1688

1688.com is China's domestic wholesale site — same factories, domestic prices. Do a reverse image search of the supplier's product photos.

Photo found on 1688 with a domestic price 40% lower → you found the real factory. Buy from them instead.
Photo not found anywhere → the "factory" is a trading company reselling someone else's products.

Red Flag 4: The payment account that doesn't match

Legitimate Chinese suppliers have corporate bank accounts in the registered company name.

Personal bank account? Walk.
"Sister company" invoice? Walk.
Payment to a third party "for tax reasons"? Walk.

If the name on the bank account doesn't match the registered business entity, your deposit is gone.

Red Flag 5: No video call, or a video call in a dark room

Real factories do video calls. Ask to see:

The production floor (not the showroom)
The specific machine that makes your product
Workers doing their actual tasks

A factory that "can't do video calls" or shows you a dark, empty room is hiding something.

Red Flag 6: The price that's too good to be true

Use 1688 to benchmark. If a supplier quotes you 30% below every other factory for the same product, you're not getting a deal — you're getting a downgrade. They'll cut quality, use cheaper materials, or disappear with your deposit.