Factory Verification Steps Before Paying Deposits

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So you’ve found a manufacturer—maybe through Alibaba, referrals, or trade shows—and they’re offering unbeatable prices. But before you hit that deposit button, let me stop you right there. As someone who’s helped over 200 brands source from Asia, I can’t tell you how many horror stories start with: "I paid the deposit and never saw the goods again."

Why Factory Verification Is Non-Negotiable

According to a 2023 ImportYeti report, nearly 37% of first-time importers face supply chain fraud, with fake factories topping the list. That’s why smart buyers always verify—before paying a single dollar.

The 5-Step Factory Check (Used by Pros)

  1. Confirm Business Legitimacy: Ask for their business license (US $10–$30 via third-party tools like Panjiva or ImportGenius). Cross-check registration numbers with government databases.
  2. Request a Video Call Audit: Skip static photos. Demand a live walkthrough of production lines, storage, and QC stations. If they refuse? Red flag.
  3. Check Export History: Use freight data platforms to see if they’ve actually shipped similar products. No shipping record? They might be brokers posing as manufacturers.
  4. Ask for Client References: Real factories have real clients. Contact 2–3 references and ask about payment terms, quality consistency, and delivery reliability.
  5. Hire a Third-Party Inspector: Firms like SGS or QIMA charge $300–$600 for on-site audits. It’s worth every penny.

Spot Fake vs Real: What to Look For

Here’s a quick comparison table:

Factor Fake Factory Verified Manufacturer
Business License Missing or unverifiable Provided & cross-checked
Production Footage Stock videos or photos Live video tour with your items in process
Export Record No past shipments Multiple LCL/FCL exports
Client Feedback None or vague testimonials Direct contactable clients

Real Talk: The Deposit Trap

Many so-called “factories” demand 30–50% deposits upfront. But verified suppliers often accept 10–30%, especially with new partners. If they won’t budge? Walk away.

I once had a client lose $48,000 because they skipped verification. The “factory” vanished after receiving payment. Don’t be that person.

Final Tip: Use Escrow When Possible

Platforms like Alibaba Trade Assurance protect your deposit until delivery. It’s not perfect—but it’s better than wire transfers to unknown accounts.

In short: Always verify before paying deposits. It saves time, money, and heartache. Need help vetting a supplier? Let’s talk.