How to Verify a Canton Fair Supplier Before Paying a Deposit

A booth at the Canton Fair is a good place to meet a supplier. It is a poor place to judge one. The sample on the table, the banner and the salesperson all look the same whether the company owns a factory, rents a corner of someone else’s, or is three people with a laptop.

None of that matters until the supplier asks for a deposit. Once the money is sent, getting it back from another country is slow, expensive and often impossible. So the time to check is the gap between the quotation and the payment.

This is the 7-step check I run for buyers. You can do most of it yourself. Where it needs someone who reads Chinese, I say so.

Step 1: Get the Chinese company name and the business licence

A Chinese company’s legal name is its Chinese name. The English name on the business card is a translation the company chose for itself. It can change from one catalogue to the next, and it is not what the government register records.

Ask the supplier for a photo or scan of the business licence. It is a one-page document and every legitimate company has one. A supplier who refuses, delays or sends a blurred copy has told you something already.

The licence shows the company name, an 18-character unified social credit code, the legal representative, the registered capital, the date the company was set up, the registered address and the business scope.

Step 2: Look the company up on the official register

China runs a public database called the National Enterprise Credit Information Publicity System. Search for the company by its Chinese name or its credit code. The site is free, and it is in Chinese only.

Check four things:

• The company exists and its status is active, not cancelled or revoked.
• The details match the licence you were sent.
• The date of establishment fits the story. A “20-year-old factory” registered last spring needs an explanation.
• Whether the company appears on the list of abnormal operations or has administrative penalties on record.

Step 3: Read the business scope

The business scope lists what the company is registered to do. This is the quickest way to tell a manufacturer from a trader.

A factory’s scope normally includes words for manufacturing, production or processing of a product category. A trading company’s scope talks about sales, wholesale, import and export.

Buying from a trading company is not wrong. Many are good, and for small or mixed orders they can be the better choice. The problem is paying a factory price to a company that told you it was the factory, and then finding nobody can answer a technical question.

Step 4: Match the three names

This is the check that matters most, and it needs no Chinese.

Put three documents side by side: the business licence, the proforma invoice and the bank details. The company on the licence, the seller on the invoice and the beneficiary of the bank account should be the same company.

If the money is to go to a different company, ask why and ask for the paperwork that links the two. Some exporters do use a related company or an export agent, and they can show you the relationship. If the money is to go to a personal account, stop. For a company-to-company order, that is the clearest warning sign there is.

Step 5: Check the address against the claim

Compare the registered address on the licence with the factory address the supplier gave you. A factory registered in an office tower in the city centre is probably an office. Look both addresses up on a map and see what is actually there.

Ask for a short live video call from the workshop. Ask the person to show the product you are buying, on the line or in the warehouse, and the company name at the gate. A real factory can do this the same day.

Step 6: Read the quotation for what is missing

A quotation is more than a price. Before you compare prices, check that each quotation states:

• Exact model and specification, not just a product name
• Price term (EXW, FOB or CIF) and the port
• Packing, and whether it is export packing
• Lead time, counted from what date
• Warranty, spare parts and who pays to ship them
• How long the price stays valid

A quotation that is 20% below everyone else with half of these missing is not cheaper. The gaps are where the extra charges come back.

Step 7: Look hard at the payment terms

For a first order, a deposit of around 30% with the balance before shipment or against shipping documents is common. A supplier who insists on 100% in advance for a large first order is asking you to carry all the risk.

Be careful with any change to bank details. If an email arrives saying the company has a “new account”, do not pay. Call the person you met at the fair, on a number you already have, and confirm. Fake bank-change emails are one of the most common ways buyers lose money.

What this check cannot tell you

A document check answers one question: is this company what it says it is, and is this quotation safe to act on? It does not replace a factory audit, and it does not tell you whether the goods will be good. For a large order, add an on-site verification before the deposit and an inspection before the balance.

If you would like me to do it

I am based in Hangzhou and I do this check for overseas buyers. You send me the supplier’s details and the quotation. I check the supplier, the licence and company name, the quotation, and the price, payment and delivery risks. You get a written answer in 2 working days: proceed, proceed with caution, or avoid. The fee is USD 99 for one supplier and one quotation.

• See what is included: Canton Fair Supplier Check
• See a sample report
• Not sure yet? Ask for a free first look

FAQ

Is a Canton Fair exhibitor automatically a verified supplier?

No. Exhibiting shows that a company registered and paid for a booth. Factories, trading companies and agents all exhibit. Treat the booth as an introduction and check the company the same way you would check any other supplier.

Can I verify a Chinese company myself for free?

Yes. The official register is free to search. You need the company’s Chinese name or credit code, and you need to read the results in Chinese or use a translation tool with care.

How long does a supplier check take?

The steps above take an experienced person a few hours when the supplier cooperates. My written report is delivered in 2 working days.

When should I do the check?

After you have a written quotation and before you send any money. That is usually the first two weeks after the fair.

Maggie Yue, Hangzhou Zhenbao Trading Co., Ltd. This service is independent and is not affiliated with the Canton Fair.