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5 Red Flags to Watch Out for When Vetting Suppliers

Protect your business by identifying warning signs early in the supplier selection process

November 10, 2025
5 min read
BG

Bluglo Team

Risk Management Experts

Finding the right supplier can make or break your business. Whether you're sourcing electronics, homeware, apparel, or raw materials from China, Vietnam, Thailand, or any other manufacturing market, the goal is always the same:

Find reliable suppliers who deliver consistent quality, fair pricing, and on-time production.

But not all suppliers meet these standards.

Spotting red flags early can save you from costly mistakes. Here are the five most important warning signs to watch for.

RED FLAG #1

Lack of Transparency

Trustworthy suppliers are open from day one.

Warning Signs:

  • ✗ Avoiding direct questions
  • ✗ Refusing to share business license
  • ✗ Won't provide factory photos/videos
  • ✗ "Trust me" without proof

What to Do:

Request business registration, factory location, certifications, video calls, or third-party audits

RED FLAG #2

Unrealistic Pricing

"Too good to be true" usually is.

Warning Signs:

  • ✗ Pricing 20-40% lower than competitors
  • ✗ Claims "factory-direct" but refuses proof
  • ✗ Unrealistic cost savings
Often means: Inferior materials, zero QC, counterfeit components, or cutting compliance corners

What to Do:

Compare specs (not just price), request samples, ask for bill of materials, verify they're not traders

RED FLAG #3

Poor Communication

If supplier is slow/inconsistent at the start, it never gets better.

Warning Signs:

  • ✗ Long delays in replying
  • ✗ Misunderstanding simple questions
  • ✗ Frequent excuses
  • ✗ Overly pushy behavior
Leads to: Misaligned expectations, production mistakes, incorrect packaging, unfixable delays

What to Do:

Evaluate communication during vetting, keep written records, test their understanding

RED FLAG #4

No Quality Control

A supplier without QC will deliver inconsistent quality.

Warning Signs:

  • ✗ Refuses third-party inspections
  • ✗ Can't explain their QC process
  • ✗ Won't share QC reports
  • ✗ Pushes back on pre-shipment inspections
Remember: Reliable factories understand inspections protect both parties. Poor factories avoid them because they have something to hide.

What to Do:

Insist on PSI, ask who performs internal QC, request QC station photos, avoid resistant factories

RED FLAG #5

Risky Payment Terms

Payment terms reveal a lot about trustworthiness.

Warning Signs:

  • ✗ Demands 100% upfront
  • ✗ Only accepts Western Union
  • ✗ Bank details don't match company
  • ✗ Payment terms constantly change

Common Signs of:

  • • Scams
  • • Poor financial stability
  • • Middlemen posing as factories
  • • High-risk suppliers

What to Do:

  • ✓ Use 30/70 payment terms
  • ✓ Pay only to company bank accounts
  • ✓ Use escrow for risky suppliers
  • ✓ Request contracts & invoices
100% upfront = STOP

Trust Your Process, Not Promises

By identifying these five red flags early, you dramatically reduce your chances of receiving poor quality goods, losing money, or damaging your brand.

Transparency

Pricing

Communication

Quality Control

Payment Terms

5

Payment Terms That Increase Your Risk

Payment terms reveal a lot about a supplier's trustworthiness.

Red Flags:

  • 100% upfront payment demands
  • Only accepts Western Union or personal accounts
  • Bank details don't match company name

What to Do:

  • Use 30% deposit / 70% before shipment terms
  • Pay only to company bank accounts
  • Use escrow for high-risk suppliers
Supplier Vetting Support

Need Help Vetting Suppliers in Asia?

BluGlo specialises in:

Factory verification
Supplier audits
Background checks
Price benchmarking
Pre-shipment inspections
Negotiation & relationship management

Our Asia and South Africa teams work together to find trustworthy, high-quality suppliers so you can import confidently.

Contact us for supplier vetting support

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