View Full Version : How to verify your Chinese Partners, Suppliers or Buyers by yourself?

Feb 10, 2010, 12:32
Most of the Chinese Businessmen are good and trustworthy, but some frauds or liars do exist. A lot of foreigner businessmen, like me, are always confused by the business registration and credit status of Chinese Companies, and find it really difficult verifying information of them. Based on my 8+ years of business experience with our Chinese suppliers and partners, I have summarized some useful and practical tips as follows:

1. Check their contact information
In order to avoid being traced by law enforcement authorities, most scammers will not offer genuine registration information online. They will provide a false company address, telephone number and fax number or persuade buyers to contact them by mobile phone only.

You should be aware of the companies that only provide you with mobile phone number (such as 86-1580000 0000). Normally, business should use telephone instead of mobile phone number. Some Chinese friends told me that you can buy hundreds of mobile phone numbers if you like, and there are no restrictions or limitations. Thatfs why scammers always use mobile phone numbers instead of telephones. Take a standard China telephone number for example, such as 86 755 3333 3333, g86h is the country code of China, g755h area code, and g3333 3333h telephone number. Therefore, you can do some basic check of the location of the telephone number using garea codeh.

2. Check their company registration number and credit status
Legal companies in China have to register with the Chinese government authorities and obtain a unique company registration number. If your business partner cannot offer you a unique company registration number, it is risky to deal with them. To check the registration number your supplier provided, you need to visit their local administrative government website with the number they provided. However, you should be aware that most government websites in China are in written Chinese. You can also contact their local Bureau of Industry & Commerce, which is the only government organization responsible for the registration of legitimate companies or enterprises in China. You can ask friends in China to help you verify this company.

You can also use a third-party authentication service company in China to help you verify information, such as SMR, OrientCredit, Inter-credit, or some other credit reporting companies in China. (Sorry, I forget the names of the rest companies)

3. Incredibly low prices
Most Chinese scammers will lure buyers with very low prices. If the prices they offer are too good to be true, you should investigate why their prices are so low. Most scammers in China make a profit by selling replicas or fakes of branded goods to overseas buyers. This is very risky because the goods will be confiscated or detained by Chinese customs if they are considered illegal in China.

4. Payment and shipment terms
The scammers never accept L/C as a term of payment. They prefer Western Union, and T/T etc. They also never deliver goods through formal channels; preferring instead to deliver samples Express by Fedex, TNT, EMS to avoid examinations from Chinese customs.

5. Warranty and after-sales services
Scammers never guarantee their quality and after-sales services after your payment. However, they may promise you a lot before payment.

PS: During our years of business experience with our Chinese partners, we found that itfs very important to acquire the credit information of them at the first stage, and then you can determine whether you should resume the negotiation or not. Because you should not trust the information published by suppliers on B2B website and itfs always misleading. Some researched said (I am not sure about the data, because I am not a researcher.), only business condition of 53% of verified companies are as same as they described in B2B Website; 21% of them are overstated for their business condition; and 26% of those companies, even some Gold Members in Alibaba turned out to be a business scammer in China. Finally, there is an old saying, gAn ounce of prevention is worth a pound of cureh; you should always keep in mind!

nice gaijin
Feb 10, 2010, 14:20
kind of random thing to register just to post that, but I actually found it pretty informative. Thanks for sharing :)