Supplier due diligence: a buyer's checklist
Verify the company behind the quotation before you compare prices — legal, financial, technical and reference checks.
Short answer
What legal checks come first?
Confirm the supplier is a real, registered business that can legally sign your contract. Ask for the company registration certificate, tax identification, and the names of authorized signatories.
- Company registration number and incorporation date
- Registered address vs. factory address — they should make sense together
- Export licenses or product certifications required in your market
- Any ongoing litigation or sanctions exposure
How do you check financial stability?
A supplier that fails mid-project costs far more than a higher price. Review available financial statements, credit reports where accessible, and the proportion of their business your order would represent.
- Two to three years of financial statements or a credit report
- Payment terms that match their cash flow reality — heavy upfront demands can signal stress
- Bank references for cross-border transactions
How do you verify technical capability?
Nameplate claims are not evidence. Ask for reference installations with products similar to yours, factory audit reports, quality certifications such as ISO 9001, and a clear list of what they manufacture in-house versus subcontract.
- Reference projects with contactable buyers in comparable industries
- Factory audit — your own, or a recent third-party report
- In-house engineering, testing facilities and spare parts support
- Documented FAT procedures and acceptance criteria
Which red flags should stop a deal?
Walk away when a supplier refuses a factory visit or audit, cannot provide verifiable references, changes company names or bank accounts mid-negotiation, or pressures for full prepayment to a personal or third-party account.
Quick questions
Is a video call factory tour enough?+
It is a useful first filter, but for significant orders it does not replace an independent audit or an in-person visit.
How many references should I check?+
At least two, ideally in your region or industry, and contact them directly rather than accepting written testimonials.
Who should run due diligence?+
The buyer's team can run basic checks; for large projects, an independent partner can coordinate audits and verification before any commitment.
Summary
- Verify legal standing, finances and technical capability before comparing prices
- Contact references directly and audit the factory for significant orders
- Treat refusals and last-minute changes as red flags, not paperwork issues
Global B2B Group is an independent, human-reviewed procurement channel — not a manufacturer, contractor or lender. Figures and methods here are general guidance; confirm project-specific details with qualified advisers.
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