Why This Matters
After 15+ years in chemical exports, I've seen too many overseas buyers lose money simply because they skipped the basics. The goal isn't finding a perfect supplier — it's eliminating the unreliable ones. This is my personal approach to verifying trading companies. The lessons here are hard-earned.
1. First, Verify the Company Is Real
Business License
Request a clear scan of the unified social credit code certificate. Check: company name, U.S.C.C. number, date of establishment — companies less than 2 years old need tighter scrutiny. If the product is a hazardous chemical, the license must explicitly list "hazardous chemicals" — ask if it's missing.
National Credit Information Publicity System (gsxt.gov.cn)
Accessible from overseas via VPN or a local contact. Check: operating status ("存续" = active), administrative penalties, abnormal operations, and serious violations. If the site returns an error from your IP, ask your freight forwarder or local partner to check it for you.
Tianyancha / Qichacha / Qixinbao
These platforms reveal a Chinese company's real profile. Key metrics:
- Paid-in capital: Chemical trading requires real capital — a company with 50M registered but 0 paid-in is a shell
- Social security contributors: 0–1 employees is a major red flag
- Risk records: contract disputes, quality complaints, environmental violations as a defendant
- Litigation history: especially cases where they were the defendant
2. Export Qualifications
Customs Registration Record
Every legitimate exporter has this. Request it and verify the company name matches the business license exactly. Any mismatch needs an explanation.
Corporate Bank Account — The Most Critical Payment Rule
All payments must go to a corporate bank account in the exact same name as the business license. Never pay to a personal account — not even the legal representative's personal account. Never pay to an offshore account that doesn't match the registered company name.
I have seen buyers wire to the supplier owner's personal account and never hear from them again.
You can request the supplier's bank account info and verify independently via the bank's official public phone number — do NOT use contact details the supplier gives you, those can be fake too.
Bank Reference Letter
Request a letter of good standing from the supplier's bank. Call the bank directly using the number from the bank's official website — not the number the supplier provides.
3. Chemical-Specific Documentation
MSDS (Material Safety Data Sheet)
Both Chinese and English versions required. Check: manufacturer name matches the actual supplier, CAS numbers match the product composition, and emergency procedures are complete. If the format is sloppy or CAS numbers contradict each other between documents, be suspicious.
COA (Certificate of Analysis)
Request a recent batch COA. Contact the testing lab listed on the COA to verify the report number — fraud is cheap, and verification is cheap too. Don't skip this step.
Market-Specific Compliance Certificates
Depending on your market: EU requires REACH registration or SCIP notification; the US requires TSCA compliance declaration. If a supplier can't provide the compliance documentation your market requires, that's a problem before you even place an order.
4. Trading Company Specifics — Find Out Who's Behind Them
Proof of Upstream Factory Relationship
Trading companies don't manufacture — they need a real factory behind them. Good trading companies will proactively tell you who their upstream is, where the factory is located, and what products they handle.
If a trading company won't share any upstream information at all, that doesn't automatically mean fraud — some genuinely protect their supplier relationships. But you can ask for documents that verify the relationship: shipping records, invoice summaries (prices blanked), or a video call directly with the factory.
Customs Declaration Verification
For first-time orders, request the supplier's export declarations from the past 12 months (prices can be redacted). Check whether the "producer/seller" field shows the actual factory name. If the declaration only shows the trading company's name with no factory, request a factory supply commitment letter with official stamp.
Alibaba / Made-in-China Profile
Check the supplier's platform profile: years of presence (longer is better), verification badges (Gold Supplier, etc.), and customer reviews. English reviews carry more weight than machine-translated Chinese ones.
5. Payment Terms
My Recommendation
Best: Irrevocable L/C at sight via a major Chinese bank (Bank of China, etc.)
Acceptable: DP (documents against payment) — payment on delivery of documents at destination port
Prepayment terms vary by relationship length, transaction size, and trust level — no fixed percentage applies universally. What matters more than the number is that the payment method matches the level of due diligence you've done.
6. Red Flags to Watch For
- Sloppy MSDS/COA, contradictory CAS numbers — likely fabricated or copied
- Price significantly below market (>20%) — classic fraud signal
- Refuses video calls, or video shows fixed/staged footage — possible shell company
- Pushes for full prepayment, refuses any third-party inspection — very high risk, stop here
- License details don't match reality — fundamental integrity problem
7. Execution Order — What to Do First
Recommended Due Diligence Sequence
A practical note: Many real, reliable Chinese suppliers don't have ISO certification, don't exhibit at trade shows, and don't have polished websites. That's okay. Due diligence helps you avoid obvious traps — it doesn't find you a perfect supplier. The real quality of a business relationship depends on the people, the communication, and the trust you build over time.
Key Takeaways — Trading Companies
Must be in the exact same name as the business license. No personal accounts, no offshore accounts with different names.
Ask for proof: shipping records, video call with the factory, or a factory supply commitment letter on official stamp.
Cross-check CAS numbers, contact the testing lab on the COA, and flag any inconsistencies before ordering.