Chinese Factory Audit Checklist: What to Verify Before Your First Order

Of the four factories I almost ordered from in 2023, two turned out to be trading companies pretending to be factories, and one had three employees in a shared office. A pre-order audit caught all three before I wired money.

This is the checklist I run before placing any order over $3,000 with a new supplier — the remote-only version, plus when to escalate to a paid third-party audit.

Stage 1: paperwork audit (30 minutes, free)

Before any video call, verify the supplier exists on paper.

Business license check

Every legitimate Chinese company has a business license (营业执照) with a unified social credit code (统一社会信用代码, an 18-character ID). Ask the supplier to send a photo.

Then verify it on https://www.gsxt.gov.cn/ (the National Enterprise Credit Information Publicity System) — paste the social credit code. You should see:

• Registered company name (matches what’s on the license)
• Registered capital (实缴 / paid-up matters more than 注册 / registered)
• Business scope (经营范围) — should include manufacturing of your product category
• Date of establishment (>5 years old is a good signal)
• Legal representative name
• No abnormal operation status (经营异常)

Red flag: registered capital under RMB 100,000 (~$14,000) on a “factory” claiming 200 employees. Real factories have much higher capital.

Red flag: business scope is “trading” or “wholesale” only, with no “manufacturing” — this is a trading company, not a factory.

Export license

For exporters, also check that the company is registered with China customs. Ask for their customs registration certificate (海关注册登记证书) or a recent customs declaration form (报关单) from a past export. A factory that “only sells domestically” cannot legally ship internationally and is funneling through a third party.

Cross-check with Alibaba profile

The company name on the business license must match the company name on Alibaba. A common scam: the Alibaba storefront is registered under one company, the bank account they send you is in a different name. If those don’t match, refuse to pay.

Stage 2: video factory tour (45 minutes, free)

A video tour catches more than any document. Schedule via WeChat video, Tencent Meeting, or Zoom. Insist it’s live, not pre-recorded. Pre-recorded factory videos are a known scam vehicle.

What to ask them to show

Walk them through these stations in order. Watch for hesitation or “the camera is broken on that side”:

1. The front gate with the company name sign visible — confirms address matches license
2. The receptionist or office area — should have the company name on the wall
3. The production floor — workers actually working, not empty machines
4. Specifically, the line that makes your product — ask them to show the machine running on a similar SKU
5. QC station — should exist as a physical station with people
6. The warehouse / shipping area — packed cartons with shipping labels in English suggest real export experience
7. The R&D / sample room — for custom products, this should look organized, not theatrical

What I ask during the tour

• “Can you show me a product that’s currently in production on your line?” (Sees real output, not props)
• “Who’s your largest customer in [my country] right now?” (Tests their export market knowledge)
• “What’s your typical lead time for [my product] from PO to ship?” (Vague answers = no real experience)
• “Show me one defect from today’s QC rejection bin.” (Real factories have reject piles; fake ones don’t)

Red flags from the tour

• The “factory” is one floor of a small building with only office desks
• All machines are off mid-day
• Workers wear clean uniforms but no products are moving
• The sales rep avoids walking through certain doors
• The Wi-Fi signal name (visible on their laptop) is a different company

I declined one supplier in 2023 specifically because the Wi-Fi network shown on their video call had a different company name than the one on the business license. They were renting desk space in someone else’s building.

Stage 3: production-fit questions

These reveal whether the factory has actually made your kind of product before, vs. learning on your order.

• “What’s your monthly capacity for [my product]?” — should be a confident number with units (e.g. “30,000 pcs/month single line, 60,000 with second shift”)
• “What’s the lead time for the first run of 1,000 pcs?” — should distinguish first-run vs. repeat (first runs always take longer)
• “What raw materials do you stock vs. order in?” — factories stock common materials; trading companies don’t
• “Can you send me one mass-production sample, not a hand-made prototype?” — handmade samples look great and prove nothing about production capability
• “Do you do third-party inspection before shipping?” — answer should be “yes, we work with SGS / BV / TUV / etc.”

Stage 4: reference check

Ask for two existing customers from your country or region the supplier currently ships to. Most refuse on confidentiality grounds — that’s fine, a hard “no” is more honest than a list of fake references.

If they provide references, look up the customer’s business and verify they actually exist. A LinkedIn profile of a “buyer” with no other history is fabricated.

Stage 5: when to pay for a third-party audit

For orders over $20,000 or for any custom-tooled product, a paid third-party factory audit is worth it. Three providers I’ve used or seen recommended:

Provider	Audit type	Typical cost	Turnaround
SGS	Basic factory audit	$400-800	5-10 days
Bureau Veritas (BV)	Social + technical	$500-1,000	7-14 days
TUV / Intertek	Technical capability	$600-1,200	7-14 days
Independent freelance inspector (sourced via AsiaInspection / QIMA)	Walk-through with photos	$250-500	3-5 days

An audit report covers: company registration, production capacity, equipment list, QC procedures, social compliance (BSCI / SEDEX), and a 100-200 photo dossier of the actual facility. Worth every dollar before a $50k tooling commitment.

For orders under $5k, skip the paid audit. The remote checklist + a $250 pre-shipment inspection (separate step, on finished goods) covers the realistic risk.

My personal go/no-go rule

I’ll place a first order if:

• Business license verified on gsxt.gov.cn, manufacturing scope, 5+ years old
• Live video tour completed, visible production line for my product category
• At least one customer reference matches a real business
• Sample arrives matching my specs within agreed timeline
• Pricing is no more than 15% below the median quote from 5 suppliers (suspiciously low = problem)

I’ll skip if any one of those fails. The cost of finding another supplier is hours; the cost of recovering from a bad one is weeks and dollars. See Alibaba supplier went silent recovery for the math on why prevention beats cure.

Related reading

• How to verify Alibaba suppliers: red flags and green flags
• China product inspection guide
• NNN agreement with Chinese suppliers
• Communicating with Chinese suppliers