How to Verify a Supplier Before Sending Money

Advance payments are normal in trade, and they are also where most supplier losses happen. If you are about to send an advance to someone you have not met, work through this list first.

Confirm who is really behind the supplier

Ask for the full business name, the owner or manager's name, an address and a working phone number. Confirm that the person who talks to you has authority to take your order.

Test the story with simple questions

• How long have they supplied this item?
• Where is the stock held right now?
• Who else buys from them, and can you speak to one of them?
• What happens if the goods are late or not as agreed?

See the stock or sample

Pictures can be copied from another seller. Ask for a live video that shows the goods, the place and a note with today's date written on it. For a large order, ask someone independent to see the goods in person.

Agree the order in writing

Write down the item, model, quantity, price, delivery date, delivery address and what happens if the goods do not match. Keep the conversation on one channel so there is a record.

Protect the payment

• Split the payment where possible: a part now and the balance on delivery or inspection.
• Pay to an account name that matches the supplier.
• Be careful when asked to pay to a personal account for a company order.
• Do not let urgency push you. "Pay now or lose the price" is a pressure tactic.

If the amount is significant and the supplier is in another state, a physical supplier verification gives you evidence before you pay.