Alibaba Supplier Vetting Checklist: How to Verify a Real Factory vs. a Trading Company

A polished Alibaba storefront does not tell you who actually makes the product. Trading companies buy from factories, add their margin, and present themselves as the manufacturer — so the price you negotiate, the quality you receive, and who is accountable when something goes wrong all depend on a check most buyers skip. This guide walks through the checks used in our Factory Vetting Checklist, in the order to run them.

Check 1: Read the Business License Scope, Not the Storefront

Ask the supplier for a clear photo or scan of their Chinese business license (营业执照) showing the 18-digit Unified Social Credit Code and the official registered Chinese company name. Then read the business scope field (经营范围):

• Manufacturing signal: the scope includes terms for production / manufacturing or processing (生产, 制造, or 加工).
• Trading signal: the scope lists only wholesale, sales, trade, or import/export activity (批发, 销售, 贸易, or 进出口) with no production activity.
• Name match: the licensed company name should match the name on the quotation, the proforma invoice, and the bank beneficiary. A mismatch means you are paying a different company than the one you vetted.

No single field is proof on its own — a license shows what a company is registered to do. That is why the checklist treats it as the first of several checks, not the only one.

Check 2: Does the Catalog Fit One Factory?

Real factories specialize. Their catalog clusters around one or two material processes — for example injection molding, CNC machining, or cut-and-sew. A catalog spanning dozens of unrelated product categories is a pattern more consistent with a trading company reselling many factories' output. Ask which items are made in-house and which are outsourced, and write the answer down.

Check 3: Address, Video, and Technical Answers

• Registered address: an industrial zone, plant, or workshop address is a better sign than a suite in a downtown office tower — though either can have exceptions, so treat it as a signal, not a verdict.
• Live video call: ask for a short, live walk from the entrance onto the production floor showing raw materials and tooling. A showroom-only tour or a pre-recorded promo video answers a different question than the one you asked.
• Technical questions: ask about tooling ownership, tolerances, and material grades. Factories can usually answer from their own floor; intermediaries often need days to relay the same questions to someone else.

Check 4: Payment Terms Tell You Who Holds the Risk

A common structure for a first order is a deposit with the balance due after a passed third-party inspection, before shipment. Demands for full payment upfront, especially by methods with no buyer protection, shift all of the risk to you. The checklist ranks payment methods from safest to riskiest so you can compare any supplier's terms against that order.

Factory Signals vs. Trading-Company Signals

Score It Instead of Guessing

Signals only help if they add up to a decision. The checklist turns 18 questions and 8 red flags into a 100-point score with a clear verdict: 80–100 order samples, 50–79 verify the weak spots, below 50 walk away. You can try 4 of the checks free in the Supplier Risk Scorer on our homepage.