It’s not a secret that business owners, how new they are, are trying to make the smartest moves for their business. After all, who wouldn’t? For some businesses, they need to rely on other businesses, especially if they plan on selling a good. This could be a gift shop needing merchandise for their store, whether it be products, boxes, gift bags, or anything else involving gifts, or it could even be a business that needs supplies to make a product, such as someone needing fabric for making dresses, or someone needing candle wax to make their candles. 

You get the idea that, in general, suppliers or even manufacturers are just needed for other businesses. But with that said, you can’t just pick the first supplier you find. Sure, some businesses do that, such as buying products in bulk from Alibaba (such as dropshipping businesses), but some businesses cannot and should not do that (such as the dress-making business or the candle business examples already stated). In general, a bad supplier can quickly make your business go downhill, and that’s something no business owner wants. 

So, with that said, there are some red flags you need to be aware of when looking for suppliers. In fact, it’d be a good idea to have supplier risk assessment criteria so you know your standards. Truly, it’s important to not just instantly gain trust in a supplier because, to a degree, they hold weight over your business. So here are some red flags you absolutely need to look out for!

Outright Poor Quality and Services

This is hands-down the biggest red flag that you’ll have to look for! Are there consistently low-quality products or services? If samples or initial shipments don’t meet your standards, it’s likely a sign that the supplier lacks the necessary quality control measures. Of course, you’re not going to know that at first; for example, if you’re looking into suppliers, they’re probably only going to show you the best of the best until you’re signed on as a customer. 

But something else you could do is pay attention to any customer complaints or negative reviews regarding the supplier’s products or services, as they can indicate reliability issues. Sometimes Google reviews, LinkedIn, or even Trustpilot have reviews on these suppliers. Technically, on Alibaba, there are also reviewers for suppliers. 

Lack of Proper Documentation 

Some businesses will state they “don’t do business the usual way” or may even state “they’re more casual,” but you can’t fall for that! There needs to be clear, comprehensive contracts and documentation; this seriously can’t be negotiated at all! These are pretty much essential for protecting your interests and establishing clear expectations with suppliers. So, you really need to be aware of suppliers who are unwilling to provide contracts or agreements, as it may indicate a lack of commitment or accountability on their part.

What are the Ethics Like?

You will be held accountable if you’re using a supplier that’s unethical because it’s still on you, the business, to look into things like that. Is there any possible way that this supplier lacks ethics?

Are they complying with relevant laws, regulations, and industry standards? Some red flags, such as labor violations, environmental non-compliance, or involvement in illegal activities, can all happen. But what if this supplier is abroad, and what’s not ethical in your country? Is that fine there? Well, your customers live in your country, and if they find out, you’re still going to have a damaged reputation.