A new supplier approaches with competitive pricing and complete documentation: certificate of incorporation, tax registration, bank letter, references. The paperwork is tidy. The first order is fulfilled correctly. The second, larger order is paid in advance and never arrives.
Why documents prove less than they appear to
Certificates are easy to forge and easier still to copy from a genuine company. The registration number may belong to a real, unrelated business. What matters is verification at source: entering the registration number into the official companies registry yourself and confirming that the name, address and directors match what you were given.
The first-order technique
Delivering the first small order correctly is a deliberate investment. It establishes the supplier as reliable and clears the way for prepayment on a larger order. Treat a sudden increase in order value as a point to re-verify rather than a sign of a maturing relationship.
Checks that catch most of it
- Look up the registration number in the official registry, not a document supplied to you.
- Call the switchboard number listed in the registry or on an independently found website.
- Check that the bank account name matches the registered company name exactly — mismatches are the strongest single signal.
- Contact trade references on numbers you find independently, not those supplied.
- Visit or verify the physical address. Serviced-office addresses shared by many shell entities are worth questioning.
Structural protections
Avoid full prepayment with a new supplier. Stage payments against delivery. Set a ceiling on the value of orders to any supplier within its first year. And keep onboarding separate from purchasing, so the person who benefits from the deal is not the person approving the vendor.