How to check an overseas supplier before you send money
Why this matters
Most trouble with a new supplier isn't an elaborate scam. It's usually something ordinary: a trading company presenting itself as a factory, goods that don't match the sample, or bank details that change by email just before payment. A few hours of checking prevents most of it.
1. Confirm the company exists
Ask for the company's registration number and check it against an official source, not a document they send you.
- India: check the GSTIN on the GST portal and the IEC (Importer Exporter Code) on the DGFT website.
- China: the business licence carries an 18-character Unified Social Credit Code. Check it on the National Enterprise Credit Information Publicity System.
- Elsewhere: use the national company registry. Most countries have one online.
The legal name, address and directors should match what the supplier told you. Small differences are worth a question.
2. Check what they have actually shipped
Search the company name in shipment data. A genuine exporter of your product will usually show repeat shipments under the expected HS code. Look at:
- how often they ship, and whether that's steady or one-off
- which countries and which buyers they ship to
- typical quantities per shipment, which tell you whether they can handle your order size
Watch for a "factory with ten years of export experience" that shows no shipments at all, or shipments of unrelated products. Bear in mind that some countries hide company names in their data, so a missing record isn't proof of fraud. If you can't find them, ask for two export references you can contact yourself.
3. Factory or trader?
Trading companies aren't a problem in themselves, and some offer better service than factories. But you should know which one you're dealing with, because it affects price, lead time and quality control. Ask for a live video walk-through of the production line, not a pre-recorded tour. If shipment records list a different company as the exporter of their goods, ask why.
4. Read the paperwork closely
- The pro forma invoice should carry the same legal name, address and registration number you verified.
- The HS code on their documents should fit the product.
- Their email domain should match their website. A large "manufacturer" using a free email address deserves a second look.
5. Sample first, then a small order
Pay for a sample and judge it against your specification, not against photos. For the first real order, consider a third-party pre-shipment inspection. Firms such as SGS, Bureau Veritas and Intertek check goods at the factory for a fee before they're shipped. Keep the first order small enough that a problem won't hurt the business.
6. Pay in a way that protects you
Avoid paying 100% in advance on a first order. A common middle ground is a deposit, with the balance paid against a copy of the bill of lading. For larger orders, a letter of credit protects both sides. Our guide to trade payment terms compares the options.
One rule matters more than any other: if bank details change by email, call the supplier on a number you already had and confirm before paying. The account name should match the company you verified.
Quick checklist
- Registration checked on an official site
- Shipment history found, or references contacted
- Live video of the facility
- Documents match the verified company
- Paid sample approved
- Inspection booked for the first order
- Payment terms that don't leave you fully exposed