5 Red Flags of Fake Suppliers You Must Watch Out For

Why This Matters

Every year, thousands of B2B businesses in Indonesia get scammed by fake suppliers. Losses can reach:

• IDR 10-500 million per case
• Wasted time finding new suppliers
• Damaged reputation from unfulfilled client promises
• Production halted because raw materials didn’t arrive

This article helps you recognize red flags before it’s too late.

🚩 Red Flag #1: Prices Too Low

Signs:

• Prices 30-50% below market rate
• Won’t explain why it’s so cheap
• Illogical reasons (“direct from factory”, “project leftover stock”)

Why It’s Dangerous:

Prices too low usually mean:

• Counterfeit products — quality far below standards
• Very low quality — doesn’t match specifications
• Pure scam — money transferred, goods never shipped
• Not real supplier — just a broker with no stock

How to Check:

1. Compare with 3-5 other suppliers
2. If difference > 20%, ask why
3. Request samples before large orders
4. Check raw material prices — if selling price is below raw material cost, something’s wrong

🚩 Red Flag #2: Refuse to Send Samples

Signs:

• Various excuses (“no sample stock”, “shipping too expensive”)
• Charge very high prices for samples
• Only willing to send photos, not physical samples

Why It’s Dangerous:

Suppliers who actually have products can always send samples. If they refuse, likely:

• Product doesn’t match description
• They don’t own/manage the stock
• Something is being hidden

How to Check:

1. Be firm: “I plan to order large, but need samples first”
2. Offer to pay for samples + shipping (this is normal)
3. If they still refuse, find another supplier

🚩 Red Flag #3: Request Transfer to Personal Account

Signs:

• Account in someone’s name (not company)
• Request transfer to e-wallets (GoPay, OVO, DANA)
• Request transfer to bank account different from company name
• Request payment in crypto

Why It’s Dangerous:

Legitimate companies have accounts in the business entity’s name. Personal accounts:

• Can’t be tracked legally
• Owner can disappear anytime
• No consumer protection

How to Check:

1. Request company NPWP (tax ID) photo
2. Match account name with company name
3. If different, request official explanation (power of attorney)
4. Safer: use company account

🚩 Red Flag #4: No Clear Physical Address

Signs:

• Address only says “Java” or “Indonesia”
• Won’t share Google Maps location
• Address on Google Maps doesn’t match (residential house, boarding house)
• No photos of office/warehouse/factory

Why It’s Dangerous:

Suppliers without clear physical addresses:

• Hard to track if problems arise
• Can’t be visited for audits
• Likely fictitious

How to Check:

1. Request full address + building photos
2. Check on Google Maps / Street View
3. If possible, visit in person
4. Check if listed on Google Business Profile

🚩 Red Flag #5: Unprofessional Communication

Signs:

• Very slow response (> 24 hours for simple questions)
• Inconsistent answers (different story each time asked)
• Won’t answer technical questions about products
• Too aggressive requesting down payment/transfer

Why It’s Dangerous:

Poor communication early on = bigger problems later:

• If hard to reach before deal, imagine after transfer
• Inconsistent answers = likely lying
• Doesn’t understand product = not direct manufacturer

How to Check:

1. Ask specific technical questions about the product
2. Request explanation of production process
3. Check answer consistency over time
4. Rate responsiveness: < 2 hours = good, > 24 hours = beware

Supplier Verification Checklist

Before dealing with a new supplier, ensure:

Minimum 6 of 8 items must be met before ordering.

Safe Transaction Methods

1. Use Escrow for Large Orders

Escrow services hold money until goods are received. Examples:

• Joint account
• B2B platform with payment protection

2. Pay in Stages

• 30% down payment when ordering
• 70% settlement after goods received and checked

3. Complete Documents

Always request:

• Official invoice
• Delivery note
• Transfer receipt
• Written warranty

4. Record All Communication

• Save all WhatsApp chats
• Screenshot supplier promises
• Record phone calls (with permission)

Conclusion

Fake suppliers are getting more sophisticated, but the red flags above can help you avoid them. Most importantly:

Don’t rush. Suppliers who truly have products won’t refuse verification. If they refuse, find another.

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