If you make money with a work-at-home retail business, you know that foreign wholesale manufacturers offer products and supplies at cheap prices. You should also know that some of these companies--particularly if located in China--may not be legitimate. If you want to import products for your home business, you must perform some basic verification before putting your money at risk.
Google the company name and address. Search the results for discrepancies in addresses and phone numbers and information related to fraud or non-delivery of products. Go to the Alibaba wholesale trade directory listed in the Resources section to see if the company is registered and has been verified by a credit agency. While verification does mean they are legitimate, it does not guarantee a successful business transaction--you must still continue with step two.
Call the company and ask for information on product specifications, delivery times and methods, and quality control. Ask them to mail you a catalog or a company report, along with a map to the factory location. The purpose of calling the company is to see if they avoid answering or give indirect answers to your questions---legitimate manufacturers will answer your questions directly.
Ask for the business registration number or tax identification number if you couldn't verify the company on Alibaba. Verify it through the foreign country's government tax or business registration website. If you need help, go to the Alibaba forum and ask how to verify a company in that particular country.
Ask for references in the U.S. or other developed nations and call them. This is a good idea even when dealing with legitimate suppliers, as you can ask for advice in dealing with the company.
Arrange to visit the factory. If you are not able to visit, you might consider hiring a company in that same country that will visit and verify the business for you.
Warning
If you receive questionable responses to any of the above steps, it is probably safest to assume that even if they are a legitimate company it is best not to trade with them.
