How to pay a new supplier safely on the first order
Most supplier losses are not sophisticated fraud: they are full prepayment sent to an unverified company. You cannot remove the risk of a first order, but you can structure it so a failure costs you a sample budget instead of the whole payment. Verify the company first, split the payment against milestones, use a traceable channel, and treat unusual payment requests as the red flag they are.
Verify the company before discussing terms
Payment safety starts before money is mentioned. Check the company against its national business registry, confirm the VAT or tax number is valid, confirm the website is real and matches the legal name, and confirm you are dealing with the company address, not a personal account. Every one of these checks is free and takes minutes, and together they filter out most of the actual scams.
Normal terms for a first order
A common and fair structure is a deposit between twenty and fifty percent to start production, with the balance paid against proof that the goods exist and match the spec: photos and videos of the finished batch, an inspection report, or shipping documents. Full prepayment for a first order from an unverified company is not a customary term, it is a concentration of all the risk on your side.
Pay through channels that leave a trail
A bank transfer to the company account in the company name keeps the money traceable and gives your bank something to work with if things go wrong. A card payment adds a dispute mechanism. Cash-like channels, personal accounts, crypto, and transfers to a different company name or a different country than the supplier's are the classic pattern of money that is never seen again.
Put the terms in one written document
One page is enough for a first order: exact spec, quantity, price, packaging, delivery term, dates, and what happens if the goods fail inspection. Attach it to the invoice. The point is not litigation, it is clarity: a supplier who resists writing down what you both agreed is telling you something before any money moves.
Watch for the payment red flags
The account name does not match the company. The bank country does not match the supplier country. The account changes at the last minute by email, which is the signature of invoice-hijack fraud, so confirm any change by phone on a number you found independently. A discount for skipping the deposit structure. Pressure to close today. Each of these alone is a reason to slow down; two together are a reason to stop.
Frequently asked questions
- Is a 100% deposit ever normal?
- For custom tooling or very small first runs some makers do ask for full prepayment. If so, the verification bar goes up accordingly: a confirmed registry record, a real production footprint, and references. For a stock product from an unverified company, full prepayment is simply the riskiest available option.
- What about escrow or letters of credit?
- A letter of credit is strong protection for larger orders but carries bank fees and paperwork that make it impractical for small ones. Platform escrow protects only while you stay inside the platform and its rules. For small first orders, milestone payments by traceable bank transfer are the realistic middle ground.
- The supplier asks me to pay a different company. Is that normal?
- It happens legitimately with group structures and export agents, but it removes your ability to connect the payment to the entity you verified, so treat it as unverified until proven otherwise: ask for the written relationship between the two entities and verify the receiving company in its own registry.
Check the company before you pay
Run a free check against registries, VAT and liveness data, no account needed. Or describe what you buy and we hand-pick up to 3 checked suppliers for you.