Audit of China's Supplier Verification from Sandra Brown's blog

How to identify and apprehend trading companies and middlemen

The vast majority of importers prefer to work directly with factories rather than through a trading company or middleman to fulfill their orders. However, almost all Chinese suppliers, including Alibaba suppliers , falsely claim to be factories when, in reality, they are commercial enterprises or of lower quality; they are con artists quality inspection china. There are numerous articles and guidelines available to teach importers how to conduct a supplier verification, but the majority of the solutions they recommend do not actually solve the problem in the real world.

In this article, we will discuss the proper methods for determining what or who your service provider is really like.

Methods for determining whether or not your supplier is a factory

1. Confirm the existence of a business license.

When verifying the commercial license of a supplier, the most important part is to look for the company's business scope. This is the quickest and most direct method of ensuring that your provider cannot deceive you about the quality of the service. The scope of a factory's business must include one of these Chinese characters, whose meaning in English is (manufacture or producer), whereas the scope of a trading company's business will not include such words.

If you are not confident in your ability to conduct supplier verification quality on your own, you can always send the supplier's business license to a trusted friend who speaks Chinese fluently to conduct the supplier verification quality, or you can hire an independent professional to do the translation for you.

If you need more information, please see the following illustration:

2. Verify the minimum order quantity (MOQ) of the supplier.

While the minimum order quantity for factories tends to be greater than those of traders, it is almost common sense in the quality of trade transactions. As a result, you can check the reliability of your suppliers by asking them to sell you products in smaller quantities.

For example, if you are looking for a supplier to purchase 10,000 ceramic plates, you can tell the supplier that you are only purchasing 250 pieces to test the quality and that if the quality is satisfactory, you will place a larger order in the future. If it is a factory, the expected response is no because the minimum order quantity (MOQ) will not be less than 1,000 units. A trading company, on the other hand, can accept small orders pre shipment inspection china. As a result, when conducting supplier verification, the minimum order quantity (MOQ) is considered to be one of the most important elements.

3. During the supplier verification audit, make sure to check the value added tax (VAT) on your supplier's invoice.

The Chinese government provides refunds for a wide range of exports in order to stimulate manufacturing and improve the overall quality of export activity. However, in order to do so, a VAT invoice is required, and a VAT invoice can only be issued by a manufacturing facility.

Inquire with your factory contact about issuing an invoice with 17% VAT added on. The supplier is likely to be a commercial enterprise or a scammer if he or she refuses to accept or hesitates to accept quality.

You can also ask for a high-resolution scan of the VAT invoice quality, and then check that the company name in Chinese matches the company name on the supplier's business license, if they agree to issue you a VAT-inclusive invoice.