Four tools teach you to verify Chinese companies
Most SMEs purchasing from China do not know how to collect information about potential companies. In addition, because the company has not been verified in any way, scammers have multiplied and the targets are all inexperienced importers.
In fact, there are many ways to verify. In China, there are many tools to verify potential companies.
1. Verify the public method of Chinese companies
1.1 The easiest way to verify companies/factories is to visit them. Is it a one-person company? Is this a large manufacturing company? Interestingly, you can make educated guesses by observing their reactions. Legitimate companies will welcome visitors, and fraudsters will try to avoid them.
If you can visit by yourself, many quality assurance agencies including China can visit most of China's coastal areas for less than US$300.
They let you know:
Where are they? What does this building look like? How many people work there?
Do they usually produce the kind of product you want to buy, or do they produce a completely different product?
What is their internal process?
Can they show their official business license or other official documents? Do they match the company name shown in the email signature?
1.2 Factory audit
A more structured review of the factory's quality management system and processes will generate useful insights, including:
Do they look reliable, or are they running without a system? Where is the biggest risk?
What is their ability (rough estimate)?
And all other elements listed earlier
2. Secret methods to verify Chinese companies
2.1 Some official information can be retrieved on the Internet:
Official registration (Chinese)
Various online resources (buyers can usually do this by searching for company names, phone numbers, etc.)
In addition, you can call the company contact anonymously and ask the buyer a few questions. A legitimate company will say some facts that do not constitute a trade secret, while a shady company does not want to disclose any information and is often aggressive on the phone.
2.2 Credit rating
Factory closures seem to be more and more common. You might do business with a legal company, and they went bankrupt as soon as they finished your production. guess. You may never see the product.
Obtaining financial statements of Chinese companies is quite difficult. However, a credit rating report can be purchased to assess the financial risks associated with the company.
This is particularly interesting because an unprofitable company is more likely to think in a short period of time and compete fiercely with its customers.