Ulinko · China Sourcing Intelligence

China Factory Sourcing
Red Flags Checklist

Use this before every factory engagement. If you check more than 3 boxes in any section, stop and investigate before committing money.

01 — Agent Red Flags

Your agent charges the factory a "service fee" or "introduction fee" Critical

This is the conflict of interest. The factory pays the agent, so the agent works for the factory.

Agent refuses to share the factory's direct invoice Critical

You should always see what the factory is actually charging. The gap between that and what you pay is the agent's hidden margin.

Agent cannot tell you which specific factory produced your last order Warning

Agent discourages you from doing an independent third-party inspection Critical

An honest agent welcomes independent eyes. Pushback on inspection means something to hide.

Agent has a financial stake in the trading company or factory they recommend Critical

Agent pushes you to pay full balance before inspection is done Warning

02 — Factory Red Flags

Factory refuses a video call or live factory tour before you place a sample order Critical

Any legitimate factory will walk you through the floor. Refusal usually means they're a middleman, not a manufacturer.

No valid business license or audit report available on request Critical

Quoted MOQ is 3–10x higher than industry average for this product category Warning

Inflated MOQs are used to lock in large orders they resell, or to push you toward a higher price tier.

Salesperson won't connect you directly with the production or engineering team Warning

Lead time changes significantly after the deposit is paid Critical

Factory cannot name their current or past export markets or clients Warning

03 — Contract Red Flags

No written spec sheet, tech pack, or product brief before sampling begins Critical

Without a spec, there's no baseline to hold anyone accountable against.

Payment terms require 100% upfront with no independent inspection clause Critical

No penalty clause for late delivery or missed milestones Warning

Quality standards are vague — "good quality" with no AQL level or inspection standard referenced Critical

AQL 2.5 or 1.0 must be specified in writing. "Good quality" is legally unenforceable.

No clause covering responsibility for rejected shipments or rework costs Warning

04 — Shipment & Quality Red Flags

No pre-shipment inspection was conducted on this order Critical

1 in 3 first shipments from a new factory has a measurable defect rate. Skipping inspection is how that becomes your problem.

Inspection was conducted by the factory itself — not an independent third party Critical

Carton count, weight, or dimensions don't match the packing list Warning

Product photos provided show different packaging or spec than what actually arrived Critical

No lab test certificates for regulated markets (CE, FCC, RoHS, CPSC, etc.) Critical

Selling non-compliant products in the US or EU can result in recalls, fines, and marketplace bans.

How to read your results

0–2

Proceed with normal diligence. Document everything.

3–5

Request answers in writing before sending money. Get an independent inspection.

Stop. Do not pay. This supplier or agent relationship has serious structural problems.

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