Sourcing scams in China: how to spot and avoid them

Two scenarios dominate. The first: a company claims to manufacture a product it has never produced, embellishes a catalog borrowed elsewhere, and disappears after the deposit. The second is more insidious: you deal with a real supplier, but someone intercepts their email or usurps their domain, then sends an invoice with different bank details. The transfer goes to a third-party account, and the factory then demands a payment you have already made.

The common point of these two cases is simple: the money leaves before any verification. The remedy is equally simple. Verify the legal existence of the company, ask for its registration number, check that its domain name matches the company's name, and above all, validate the bank account through an independent channel. A video call or phone call made to a number you found yourself, never to a number written in the email containing the bank details.

Certain payment requests should trigger an immediate alarm. A transfer to an account in an individual's name, a request for payment via Western Union or cryptocurrencies, a one hundred percent deposit before production: in all these cases, you lose all trace of the transaction and any recourse. A serious factory invoices in the name of its legal entity, to a company account, with an official invoice.

The payment structure matters as much as the channel. Typical terms in the industry are a deposit before production, then the balance before shipment or against a copy of the bill of lading. A supplier demanding an excessive deposit, or requesting the balance very early, gains an unfair advantage over you. If you do not know the company, reduce the risk: start with a modest pilot order and use an instrument that leaves a documented trail rather than an informal transfer.

Alibaba is a legitimate marketplace, used daily by thousands of serious buyers. But the volume also attracts fake profiles. Classic signs: a new company profile with an encyclopedic catalog, photos that come from elsewhere, a seller who pushes you to WhatsApp or an external channel from the very first exchanges, and prices consistently below everyone else for an identical product.

An unusually low price is the most reliable warning signal. If a product trades everywhere around a certain level and a seller offers much less, the question is not how they do it, but what they will not do: quality, quantity, delivery, or simply returning your money. Platforms offer protections, like Trade Assurance on Alibaba, but they cover documented situations within specific deadlines. Leaving the platform means leaving the protection.

A rarer but costly scam: an intermediary without a workshop presents itself as a manufacturer, sub-treats in the shadows without control, and delivers whatever it finds at the best price. You think you are signing with the factory, but you are actually signing with an extra layer. In case of problems, this layer turns back to the real producer and leaves you stuck in between.

Control comes from the field. A basic check involves requesting the exact workshop address, the business license and the official scope of activity from the license, then cross-referencing these with Chinese public sources. A factory visit or an audit settles the question in a day: you see the machines, the lines, the staff. Remotely, a live video call requested at the production site, without a pre-arranged setup, already gives a good indication.

The proforma invoice is not a trivial document: it is often what triggers the first payment. A sloppy proforma, without a full legal name, without consistent bank details, without a precise description of the goods, is a breeding ground for scams. Another variant: the seller demands high sample and shipping fees, then disappears, or drags things out until you give up.

The healthy reflex is to treat the proforma as a mini-contract. It must name the legal entity, describe the product and quantities, indicate the price and delivery terms, and propose a clear payment schedule. Sample fees exist and are often refunded on order, but they must remain proportional to the real cost of a sample and its shipping. An excessive, unjustified amount is a reason for doubt.

Our trading and sourcing company works every day with Chinese factories, and our Sinophone team in Guangzhou verifies suppliers directly: legal existence, license, workshop, consistency of bank details. We do not speak Chinese ourselves, and that is precisely why this team exists: it detects inconsistencies that a foreign buyer cannot see, attends factory visits in Guangdong and checks the goods before containers leave.

In most cases, you pay no fees: you open a file, we negotiate the goods for you and we take a commission on their ex-works value. The checks described in this article are part of the standard process, from the first introduction to the pre-shipment inspection.