Question 1

What is a supplier risk assessment?

Accepted Answer

A supplier risk assessment is a structured check of a supplier before you pay them, scored across four dimensions: legal entity (is the company real and registered), factory substance (does it actually make the product), quality system (how defects are controlled and inspected) and transaction safety (how money moves and what protects you). Each dimension is scored, and the weakest one is where your order is most likely to fail.

Question 2

How do I check if a Chinese supplier is legitimate?

Accepted Answer

Ask for the business licence, then verify the unified social credit code in China's National Enterprise Credit Information Publicity System — it shows registration status, legal representative and registered capital. Confirm the bank account name matches the licensed company name, and video-call the production floor rather than accepting a catalogue. A legitimate supplier can produce all of these within a day; a reseller posing as a factory usually cannot.

Question 3

What are the biggest risks when buying from a new Chinese supplier?

Accepted Answer

The four that consistently cost buyers money: (1) paying a trading company that pretends to be a factory, so you pay factory prices for a middle layer; (2) material substitution after the deposit — the sample was correct, the bulk run is not; (3) no independent inspection, so defects are discovered at the destination; (4) paying 100% up front with no inspection and no written payment trigger. All four are checkable before you transfer money.

Question 4

Should I pay a deposit to a supplier I have not visited?

Accepted Answer

Yes, if the verification steps are done: licence verified, factory video-toured live, factory invoice seen, a paid sample checked against spec, and a pre-shipment inspection written into the PO with the balance released only after it passes. The deposit itself is normal (30% is standard); what is risky is paying a deposit before any independent verification.

Question 5

How is supplier risk scored?

Accepted Answer

This assessment scores 12 questions across four dimensions — legal entity, factory substance, quality system and transaction safety — each answer worth 0 to 3 points. Your total is shown as a percentage with a risk band (low, moderate or high), plus a per-dimension breakdown so you can see exactly which area needs work before you place the order.

Question 6

Is a video factory tour enough to verify a supplier?

Accepted Answer

No, but it removes the most common fraud. A live video call where you direct the camera — from reception to the production floor, machines running, raw material and finished goods — is much harder to fake than a pre-recorded tour. Combine it with the business licence check and a factory invoice, and you have filtered out most resellers and outright frauds.

Question 7

What should I do if my supplier scores high risk?

Accepted Answer

Do not simply walk away — convert the gaps into conditions: get the licence before any payment, arrange a third-party inspection before the balance, start with a small trial order, and require the factory invoice. If a supplier refuses the verification itself rather than the fix, that refusal is the answer. If you want a local team to check the factory and inspect the first order in China, that is exactly what we do.

Supplier Risk Assessment

Where supplier risk actually lives

Legal entity

Factory substance

Quality system

Transaction safety

Your score by dimension

What to fix before you pay

Get a quote for your next order

The cheapest audit is before the deposit

An invisible markup inside the unit price

A rejected container

Payment with no trigger

Supplier risk questions

Verify, then inspect

Inspection Report Template (Excel)

AQL Sampling Table (Excel)

China Factory Audit: The Complete Guide