Profit is the ultimate objective of every business, undoubtedly. However, the profits depend on several factors including market competition, poor leadership, high expenditure, internal fraud, and weak links in the supply chains – particularly suppliers.

The reason why the sourcing industry emphasizes so much on vendor/supplier risk management and vetting processes is because many businesses have suffered huge losses in the past years due to lack of diligence.


A vendor that fails to deliver quality products on time is a rather known threat because their failure directly hurts your sales and clientele. It is important to ensure that your vendor is in a position to deliver your order to the expected quality standard on time. While this assurance can best come from past experience, there are other means through which one can determine a vendor’s reliability, including background checks, audits and referrals.

Financial Instability

Financially secure vendors are more likely to deliver effectively and on time, whereas vendors facing financial difficulties may have to overcome a set of challenges to meet your needs and you never want a supplier to compromise when fulfilling your order. A review of the vendor’s financial status and spending patterns can highlight negative financial factors about your vendor that can turn out hazardous if unnoticed.

Vendor-Employee Relationships

Fraudulent activities between vendors and their employees are common and they can create multiple challenges for your business. Vetting both the vendors and their employees is highly recommended.

Things to look out for include:

  • Pass-through schemes, an employee or contractor sets up a business, which supplies goods or services to clients.
  • Tender fraud, the manipulation of the bidding/tendering process between employees of the issuer of the bid and the bidding company lead to bribes and kickbacks.
  • Conflict of Interest occurs when an individual or organisation is involved in multiple interests, one of which could possibly corrupt the motivation for an act in the other.
  • Shell company schemes enable an entity that has no active business and usually exists only in name as a vehicle for another company’s business operations.

The best way to protect your business from unreliable and doubtful suppliers is to take precautionary measures and follow a strict vetting process, rather than having to carry out damage control. A solution that is extremely useful in the procurement process is hiring a sourcing company, that assists you with supplier vetting and supplier risk management, and facilitates the verification of suppliers to help identify possible conflicts of interest, pass-through schemes and shell companies. This is why at BlinkGlobal we offer our clients a complete sourcing solution for their business.

BlinkGlobal is your next Global Sourcing partner, no matter what you want to import and no matter where you want to import it from, we will do it for you. We offer complete sourcing solutions that guarantee uninterrupted global sourcing!

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