Reading Time: 12 minutes | Warning: This Could Save You $30,000+
Introduction: The $30,000 Lesson
“I should have known better.”
That’s what James told me when we first spoke. He’s a procurement manager for a mid-sized health food company in California. Six months earlier, he had sent $30,000 to an Indian supplier for a bulk order of organic turmeric powder.
The supplier had a professional-looking website. Great prices—40% below market rates. Quick responses to initial emails. Even claimed to have FSSAI and organic certifications.
The shipment never arrived.
By the time James realized something was wrong, the “supplier” had disappeared. Website down. Emails bouncing. WhatsApp number disconnected. $30,000 gone.
James isn’t alone.
According to a 2024 report by the International Trade Centre, approximately 12-15% of international trade transactions involve some form of fraud, with food and agricultural products being among the highest-risk categories. The average loss per incident? $35,000.
But here’s what’s even more troubling: Most of these scams were completely avoidable. The warning signs were there—victims just didn’t know what to look for.
I’ve been in the food export business for over 6 years. I’ve seen hundreds of importers get burned by unreliable suppliers. I’ve also seen how a simple due diligence checklist can prevent virtually all of these disasters.
Today, I’m sharing the 5 critical red flags that signal a supplier might disappoint you—or worse, scam you entirely.
This isn’t about us. This is about protecting YOU, whether you choose Regal Impex or any other supplier.
Let’s dive in.
🚩 RED FLAG #1: No Physical Address or Verifiable Facility
The Warning Sign
The supplier claims to be “based in Mumbai” or “operating from Delhi,” but:
- Won’t provide a specific street address
- Only lists a PO Box or virtual office location
- Refuses to do video calls from the facility
- Has no photos of their factory or warehouse
- Makes excuses when you ask to visit or send an inspector
- Google Maps shows no business at their claimed address
Why This Matters
Every legitimate export business operates from a physical location—whether it’s a factory, warehouse, or processing facility. This isn’t optional. Indian export regulations require businesses to have registered premises.
A supplier hiding their physical location is hiding something bigger.
The Reality Check
Case Study: In 2023, an Australian importer discovered that his “supplier” was actually operating from a residential apartment. The “factory photos” on their website? Stolen from another company. The “team photo”? Stock image from Shutterstock. The $18,000 advance payment? Gone forever.
How to Verify
✅ Google the address: Does it show up on Google Maps? Do street view images show a commercial/industrial facility?
✅ Request video call: Ask for a live video tour of their facility. Look for:
- Manufacturing or processing equipment
- Inventory and storage areas
- Quality control labs
- Staff and operations
✅ Check business registration: All Indian export businesses must be registered with Ministry of Corporate Affairs. You can verify this at www.mca.gov.in
✅ Third-party inspection: Services like SGS, Intertek, or Bureau Veritas can visit facilities and verify existence/capabilities.
What Legitimate Suppliers Do
At Regal Impex:
- Our physical address: [Full address], Pimpri-Chinchwad, Maharashtra, India
- GPS coordinates: [Coordinates] (searchable on Google Maps)
- Virtual factory tours: Available on request via video call
- Welcome inspections: Third-party audits, client visits anytime
- Government registrations: All publicly verifiable
Bottom line: If a supplier won’t show you where they operate, don’t send them money.
🚩 RED FLAG #2: Prices 30%+ Below Market Rate
The Warning Sign
You’ve gotten quotes from multiple suppliers:
- Supplier A: $12/kg
- Supplier B: $13/kg
- Supplier C: $14/kg
- Supplier D: $7/kg 🚩
Supplier D seems amazing! You could save thousands!
Stop. Right. There.
Why This Matters
Pricing in commodity exports follows market dynamics. While there’s some variation based on:
- Volume (bulk orders get discounts)
- Quality grade (premium costs more)
- Supplier efficiency (some operate leaner)
- Payment terms (advance payment might get 2-5% discount)
Legitimate variation is typically 10-15%, not 40-50%.
When prices are dramatically below market rates, it means one of three things:
- Inferior quality: Using cheaper, lower-grade raw materials, or adulterating products
- Bait and switch: Low price to get you hooked, then find reasons to increase costs later
- Outright scam: No intention of delivering anything
The Reality Check
How cheap suppliers operate:
Scenario 1 – Quality Substitution: You order “food grade” amla powder. They send “industrial grade” (non-food quality). By the time you discover this (through testing or customer complaints), you’ve paid and they’ve moved on.
Scenario 2 – Bait and Switch: Initial quote: $7/kg After you commit: “Oh, that price was for 100-ton orders. For your 5 tons, it’s $11/kg. Plus, there’s a $2,000 ‘processing fee’ we forgot to mention…”
Scenario 3 – The Scam: They never had any product. They’re collecting advances from multiple buyers, then disappearing.
Case Study: A German importer ordered 10 tons of red onions at $0.20/kg (market rate: $0.35/kg). Product arrived severely damaged, undersized, and with 30% wastage. By the time proper quality product was sourced elsewhere, the “savings” cost him an extra $8,000 plus 3 weeks of delays.
How to Verify
✅ Know market rates: Check platforms like Alibaba, IndiaMART, TradeIndia for benchmarks
✅ Ask why it’s cheaper: Legitimate suppliers can explain their pricing (e.g., “We own our processing facility, cutting out middlemen” or “We’re offering a promotional rate for new clients”)
✅ Request detailed breakdown: Ask for itemized costs:
- Raw material cost
- Processing cost
- Packaging cost
- Freight cost
- Profit margin
Scammers won’t provide this. Legitimate suppliers will.
✅ Sample before bulk: If the price seems good, order a small sample first. Test it thoroughly.
What Legitimate Suppliers Do
At Regal Impex:
- Our prices: Typically 8-12% higher than cheapest alternatives
- Why: We pay farmers premium prices for quality, own our processing facility, invest in quality control, maintain inventory buffers
- Transparency: We provide detailed cost breakdowns on request
- Honest about competition: If someone is legitimately cheaper with same quality, we’ll tell you why (and it’s usually worth investigating them carefully)
Bottom line: In exports, as in life, if it seems too good to be true, it probably is.
🚩 RED FLAG #3: Demands 100% Advance Payment with No Recourse
The Warning Sign
The supplier insists on:
- 100% payment before production or shipping
- Bank transfer only (no LC, escrow, or trade protection)
- No refund policy if product doesn’t match specifications
- Vague or no quality guarantee
- Resistance to using third-party payment protection services
Why This Matters
Legitimate international trade has evolved secure payment mechanisms precisely because of fraud risks.
Standard payment options for international trade:
- Letter of Credit (LC): Bank guarantees payment only when shipping documents prove delivery
- Escrow Services: Third party holds payment until buyer confirms receipt
- Trade Assurance: Platforms like Alibaba offer buyer protection
- Partial Payments: 30-50% advance, balance against shipping documents or after inspection
100% advance payment with no protection = all risk on buyer, zero risk on supplier.
The Reality Check
Think about it from a scammer’s perspective. Their goal is maximum money with minimum effort. Getting 100% payment upfront with no recourse is the perfect scenario. Once they have your money:
- No incentive to deliver quality product
- No incentive to deliver on time
- No incentive to deliver at all
Case Study: A UK-based wellness brand sent $52,000 (100% advance) for organic amla powder. Supplier went silent for weeks. When product finally arrived, it was:
- Wrong specification (60 mesh instead of 80 mesh)
- Expired (6 months past best-before date)
- No organic certification
The supplier refused refund or replacement. “All sales final” was buried in the fine print. Legal action in India from UK? Expensive and time-consuming.
How to Verify
✅ Insist on secure payment terms:
- Letter of Credit for large orders
- Escrow for medium orders
- Trade Assurance platforms for smaller orders
- At minimum: Partial payment (30-40% advance, balance against documents)
✅ Check their flexibility: Legitimate suppliers are willing to discuss payment terms, especially for new clients. Rigid “100% or nothing” is a red flag.
✅ Review contracts carefully: Look for:
- Clear quality specifications
- Refund/replacement policies
- Dispute resolution mechanisms
- Penalty clauses for non-compliance
What Legitimate Suppliers Do
At Regal Impex:
- We accept: Letter of Credit, Escrow, Trade Assurance
- Standard terms: 30% advance, 70% against shipping documents
- For established clients: Even better terms after trust is built
- Our guarantee: If product doesn’t match locked specifications, full refund or replacement (see our previous article on Quality Lock System)
- Why we’re flexible: We’re confident in our ability to deliver, so we’re comfortable with secure payment mechanisms
Bottom line: Never put yourself in a position where a supplier has all your money and no obligation. Use secure payment methods.
🚩 RED FLAG #4: Unverifiable or Fake Certifications
The Warning Sign
The supplier claims to have certifications but:
- Won’t share certificate numbers or copies
- Provides certificates that look unprofessional or edited
- Claims certifications but you can’t verify them on official websites
- Has expired certifications but claims they’re current
- Lists certifications that don’t apply to their business type
Why This Matters
In food export, certifications aren’t optional perks—they’re legal requirements. Indian food exporters need:
Mandatory:
- FSSAI License: Food Safety and Standards Authority of India (mandatory for all food businesses)
- APEDA Registration: Agricultural and Processed Food Products Export Development Authority (mandatory for most agricultural exports)
- Import Export Code (IEC): Required for export operations
Often Required:
- ISO 22000 / HACCP: Food safety management
- Organic Certifications: NPOP (India), USDA Organic (USA), EU Organic (Europe)
- Halal/Kosher: For specific markets
- GMP Certification: Good Manufacturing Practices
Here’s the key: All these certifications are publicly verifiable through government or certifying body websites.
If a supplier claims certifications but won’t let you verify them—they’re either fake or expired.
The Reality Check
How to spot fake certificates:
- Visual quality issues:
- Poor printing quality
- Spelling mistakes
- Unprofessional formatting
- No official seals or signatures
- Generic clip-art logos
- Red flag details:
- No certificate number
- No expiry date or validity period
- Vague issuing authority
- Address doesn’t match supplier’s claimed location
- Can’t be verified:
- Certificate number doesn’t exist in official database
- Issuing authority never heard of them
- Expired years ago
Case Study: A US importer accepted FSSAI and organic certificates from a supplier at face value. Three months after starting business, their own client ran an audit and discovered:
- FSSAI license number was fake (didn’t exist in government database)
- Organic certificate was expired by 2 years
- ISO certificate belonged to a completely different company
The importer lost their biggest client and faced legal issues for selling products as “organic” without valid certification.
How to Verify
✅ FSSAI Verification: Go to: www.fssai.gov.in → Click “License/Registration” → “Verify License” Enter license number. If legitimate, full details appear.
✅ APEDA Verification: Go to: www.apeda.gov.in → “Database” → “RCMC Holders” Search by company name or registration number.
✅ ISO/Organic Certifications: Contact the issuing body directly (e.g., SGS, TUV, Control Union) Provide certificate number for verification
✅ Request current copies: Certificates should have:
- Clear issue date and expiry date
- Unique certificate number
- Issuing authority contact details
- Scope of certification (what products/processes are covered)
✅ Independent verification: Hire a verification service (cost: $50-200) to check all certifications
What Legitimate Suppliers Do
At Regal Impex:
- All certifications listed on website with certificate numbers
- Downloadable copies of all certificates in PDF
- We WANT you to verify: Instructions provided for checking each certification independently
- Annual updates: Certifications renewed before expiry
- Scope transparency: Clear about what each certification covers
Our key certifications:
- FSSAI License: [Number] (Verify at fssai.gov.in)
- APEDA Registration: [Number] (Verify at apeda.gov.in)
- ISO 22000: [Number] – Issued by [Certifying Body]
- Organic Certifications: NPOP [Number], USDA [Number]
Bottom line: In the age of digital verification, there’s no excuse for unverifiable certifications. If they won’t let you verify, walk away.
🚩 RED FLAG #5: Poor Communication and Unprofessional Behavior
The Warning Sign
During initial interactions, the supplier:
- Takes 3-5+ days to respond to emails
- Gives vague answers to specific technical questions
- Avoids video calls or face-to-face conversations
- Provides inconsistent information
- Has unprofessional communication (excessive typos, poor grammar that impedes understanding)
- Pressures you to decide quickly
- Becomes defensive when you ask detailed questions
- Can’t provide technical specifications or data sheets
Why This Matters
Communication before the sale = Communication after the sale.
If a supplier is slow, vague, or unprofessional when they’re trying to WIN your business, imagine how they’ll behave when:
- There’s a quality issue
- A shipment is delayed
- You need urgent support
- Something goes wrong
They won’t suddenly become responsive and helpful after they have your money.
The Reality Check
Good communication isn’t just about being nice—it indicates:
1. Technical competence: Can they answer detailed questions about moisture content, mesh size, processing methods, shelf life? If not, they don’t understand their own product.
2. Organizational capacity: Response time reflects their operational efficiency. Slow responses suggest disorganization.
3. Commitment to service: Suppliers who care about customer relationships respond promptly and thoroughly.
4. Transparency: Willingness to answer tough questions shows they have nothing to hide.
Case Study: An Australian importer was working with a supplier who took 4-5 days to respond to routine emails. He thought, “Well, they’re busy, it’s fine.”
Then a problem occurred: A shipment was held at customs due to missing documentation. The importer needed urgent documentation from supplier.
Response time? 6 days. By then, demurrage charges had accumulated to $3,200.
The importer switched to a more responsive supplier. Problem solved.
How to Verify
✅ Test their response time:
- Send initial inquiry
- Note how long until first response
- Ask a follow-up technical question
- Note response quality and speed
Acceptable: 24-48 hours for first response, faster for subsequent Red flag: 3+ days consistently
✅ Ask specific technical questions:
- “What’s the moisture content range for your amla powder?”
- “What processing method do you use?”
- “Can you provide a Certificate of Analysis from your last batch?”
- “What’s your rejection rate?”
Good suppliers answer specifically. Bad suppliers give vague non-answers.
✅ Request video call: Legitimate suppliers are happy to jump on a call. Scammers avoid it.
✅ Test their knowledge: Ask about:
- Harvest seasons
- Processing techniques
- Quality parameters
- Regulatory requirements
Real exporters know this stuff. Middlemen and scammers don’t.
✅ Check consistency: Do they give the same answers when asked at different times? Legitimate suppliers are consistent because they’re telling the truth.
What Legitimate Suppliers Do
At Regal Impex:
- Response time: <2 hours guaranteed during business hours
- Dedicated account managers: Direct contact with person who knows your account
- Technical expertise: Our team includes food scientists and quality experts
- Communication channels: Email, WhatsApp, phone, video calls—whatever works for you
- Proactive updates: We inform you of progress without you having to chase us
- Professional documentation: Clear, detailed, properly formatted
Bottom line: Communication quality is product quality. Don’t compromise on either.
Your Complete Due Diligence Checklist
Before sending payment to ANY Indian supplier, complete this checklist:
Physical Verification (30 minutes)
☐ Google their address on Maps—does it show a real facility? ☐ Request video call from factory floor ☐ Check their business registration on MCA website ☐ Look for physical photos (not stock images) on their website/social media
Price Verification (15 minutes)
☐ Get quotes from 3-5 suppliers for comparison ☐ Understand market rate for your product ☐ Ask for detailed price breakdown if unusually low ☐ Calculate total landed cost (not just FOB price)
Payment Terms (20 minutes)
☐ Confirm they accept LC, escrow, or trade assurance ☐ Review contract for refund/replacement policies ☐ Check dispute resolution mechanisms ☐ Never agree to 100% advance with no protection
Certification Verification (45 minutes)
☐ Request certificate numbers for all claimed certifications ☐ Verify FSSAI license on fssai.gov.in ☐ Verify APEDA registration on apeda.gov.in ☐ Contact certifying bodies directly for ISO/Organic certs ☐ Check expiry dates on all certificates
Communication Assessment (Ongoing)
☐ Track response times to your inquiries ☐ Ask specific technical questions and evaluate answers ☐ Request and review technical data sheets ☐ Schedule video call to assess professionalism ☐ Ask for 3 client references and actually call them
Additional Due Diligence (Optional but Recommended)
☐ Run background check through credit agencies ☐ Check for online reviews/complaints ☐ Hire third-party inspection service ($200-500) ☐ Start with small trial order before bulk commitment ☐ Use trade assurance or escrow for first transaction
Time Investment: 2-3 hours Potential Savings: $30,000-50,000+ in avoided scams
What If You’ve Already Been Scammed?
If you’ve lost money to a fraudulent supplier:
Immediate Actions:
- Document everything: Save all emails, contracts, payment receipts, chat conversations
- Report to authorities:
- Indian Cyber Crime: www.cybercrime.gov.in
- Your local police/fraud department
- International Chamber of Commerce (ICC)
- Contact your bank: Some wire transfers can be reversed if caught quickly
- Report on trade platforms: If transaction was through Alibaba, IndiaMART, etc., report the seller
- Warn others: Post on relevant forums, review sites to prevent others from same fate
Legal Options:
- Consult international trade lawyer
- Small claims court (if amount qualifies)
- Arbitration through trade bodies
- Consider cost-benefit: Legal action can cost $5,000-20,000+
Learn and Move Forward:
- Complete the due diligence checklist for next supplier
- Start with smaller trial orders
- Use secure payment methods
- Build relationships slowly with new suppliers
Why Trust Regal Impex?
We wrote this article to help importers avoid bad suppliers—whether they choose us or not. But if you’re evaluating us, here’s how we stack up against these red flags:
✅ Physical Verification
- Address: [Full Address], Pimpri-Chinchwad, Maharashtra, India
- Virtual tours: Available on request via video call
- Client visits: Welcome anytime (schedule in advance)
- Third-party audits: We’ve passed SGS, Intertek inspections
✅ Transparent Pricing
- Our position: 8-12% higher than cheapest alternatives
- Why: Quality materials, owned facility, rigorous QC, inventory buffers
- Cost breakdown: Available on request
- No hidden fees: What you see is what you pay
✅ Secure Payments
- We accept: Letter of Credit, Escrow, Trade Assurance
- Standard terms: 30% advance, 70% against documents
- Guarantee: Full refund/replacement if quality doesn’t match
- New clients: Most flexible payment options available
✅ Verified Certifications
- FSSAI License: [Number] – Verify at fssai.gov.in
- APEDA Registration: [Number] – Verify at apeda.gov.in
- ISO 22000: [Number] – Contact [Certifying Body]
- Organic: NPOP [Number], USDA Organic [Number]
- All downloadable: Available on our website
✅ Professional Communication
- Response time: <2 hours during business hours
- Team: Dedicated account managers + technical experts
- Channels: Email, WhatsApp, phone, video calls
- Languages: English, Hindi, Marathi
- Proactive: We update you without you having to ask
✅ Proven Track Record
- Years in business: 6+ years
- Total shipments: 1,800+ successful deliveries
- Rejection rate: <1% (industry average: 8-12%)
- Client retention: 94% year-over-year
- Geographic reach: 12+ countries across 4 continents
✅ Client References
We’re happy to connect you with current clients in your region/industry. They’ll tell you what working with us is really like.
Take Action Now: Protect Yourself
Don’t become another statistic in the $35,000 average fraud loss.
