A must-read for foreign trade novices! A complete guide to customer background checks from entry level to mastery!

Foreign trade customer background check: the key to building a trust chain

In the fiercely competitive foreign trade market, building trust with customers is the core of facilitating transactions. As an important part of building a trust chain, the importance of foreign trade customer background checks is self-evident.

1. Why is background check of foreign trade customers important?

Background checks on foreign trade clients are like understanding the destination and partners before sailing. Data shows that about 70% of foreign trade companies have encountered transaction risks due to insufficient understanding of their clients, such as overdue payments and product quality disputes. Through background checks, we can gain in-depth information about clients’ credit status, operating strength, market reputation, and other information. For example, through background checks, we found that an American client has a good reputation and stable sales channels in the local market, which will make us more confident in cooperation and help us avoid possible risks in advance.

2. Where should a foreign trade novice start when doing background checks on clients?

For foreign trade novices, customer background checks can be a complicated task.

First of all, you can start with the customer’s basic information, such as company registration information, contact information, etc.

You can also use Internet search tools to check the customer's comments and dynamics on industry forums and social media. For example, you can learn about the customer's professional background and personal connections on LinkedIn.

In addition, some professional background check agencies and platforms are also good choices, as they can provide more comprehensive and accurate information.

3. How does AB customer help clients conduct comprehensive background checks?

As a professional foreign trade service platform, AB Customer has three core advantages in customer background checks:

Data penetration MAX

Relying on the global customs data + corporate information database accumulated by the platform, key data such as the target customer's purchase record, business status, and contract performance can be retrieved with one click. For example, the system will automatically mark risk points such as "the customer's purchase volume has fluctuated by more than 50% in the past three years", which is much more practical than simply checking the company's registration information.

Intelligent early warning radar

Combined with AI algorithms, credit scores are assigned to customers, and risk changes are monitored in real time. A user once discovered through system warnings that the ESG score of a long-term customer suddenly plummeted. After in-depth investigation, it was found that the other party was in environmental protection litigation, and the million-dollar order was frozen in time.

Visualization of the entire background check process

From information capture → risk labeling → decision-making recommendations, a complete chain of evidence is formed, and each step generates a record with a timestamp. A machinery exporter used this function to prove the customer's qualifications to the bank and successfully applied for better letter of credit terms.

[Real case: Avoiding pitfalls in a lighting factory]

When Mr. Wang from a lighting factory in Wenzhou checked the background of American customers through AB customer, the system popped up a window to prompt three abnormalities:

① Customs data: The customer's import volume has dropped by 80% in the past six months

② Litigation record: involving 3 supplier payment disputes

③ Social media sentiment: LinkedIn shows that the purchasing director has resigned

The AB customer consultant team further retrieved the customer's D&B report through the VIP channel and found that its credit limit had been frozen. Mr. Wang immediately changed the payment method from DP to LC. In the end, the customer's payment was overdue, but because of the risk control measures in place, the company suffered no loss.

The entire background check process took only 20 minutes. The system automatically generated the Chinese and English versions of the "Customer Risk Assessment Report", with screenshots of the original data and risk control recommendations. Later, this report became the key material for Mr. Wang to apply for export credit insurance.

4. Guide to Avoiding Pitfalls in Background Checks for Foreign Trade Customers (Precautions)

There are also some things to pay attention to when conducting background checks on customers.

First, the source of information should be reliable, and avoid using unconfirmed rumors.

The second is to protect customer privacy and comply with relevant laws and regulations.

Third, you cannot rely solely on a single background check result, but must make a comprehensive judgment based on information from multiple aspects. For example, you cannot just look at the client's financial statements, but must also understand its actual operating conditions and market competitiveness.

Foreign trade customer background check is an indispensable part of foreign trade business. Through comprehensive and accurate background check, we can better understand customers, build a trust chain, and reduce transaction risks. If you want to learn more about the methods and techniques of foreign trade customer background check, please contact us immediately to start your worry-free foreign trade journey!