Paying an advance to a supplier you have never met is the biggest risk in wholesale sourcing. A few simple checks, done before the first payment, remove most of that risk.
1. Check the GST number
Anyone can check a GSTIN on the official GST portal using "Search Taxpayer". The result shows the legal name and trade name, whether the registration is active, suspended or cancelled, the date of registration, the state and type of business (proprietorship, partnership or company), and the activities declared. Match the legal name with the name on the quotation and the bank account. A manufacturer asking for large advances should have an active registration; a GSTIN that belongs to a different business, or a cancelled one, is a serious warning sign.
2. Check the address
Is there a real factory or workshop address? Does it appear consistently on their invoices, website and business listings? A map listing with photos helps but is not proof on its own.
3. Ask for a workshop video call
A live video walk-through of casting, plating, setting and packing areas is the fastest way to tell a manufacturer from a trader. Ask to see work in progress, not only finished stock.
4. Ask for a sample with a change
Ask for a sample of a catalogue design with one change: a different stone colour or finish. A manufacturer can do it. A trader reselling someone else's stock usually cannot.
5. Check how long they have been in business
Years in business, founding date and consistent history across platforms all count. Ask how long they have supplied the styles you want.
6. Ask for trade references
Established suppliers can usually connect you with an existing buyer, or at least describe the kind of businesses they supply. Be cautious if the answer is vague. When you speak to a reference, ask:
- How long have you bought from this supplier?
- Do deliveries arrive when promised?
- Do bulk goods match the approved samples?
- How are problems handled when they happen?
- Would you give them a large order again?
The last two answers tell you the most. Every supplier has problems sometimes; what matters is how they are resolved.
7. Read their terms in writing
MOQ, payment structure, lead time, approval process, dispatch method, and what happens if goods do not match the sample. If terms are unclear before you pay, they will be less clear after.
8. Pay to a business account
Pay advances to an account in the business name that matches the GST registration. Avoid personal accounts for large payments.
9. Start with a manageable first order
Your first order tests the relationship. Size it so a problem would hurt but not sink you.
Red flags
- Prices far below everyone else's
- Pressure to pay immediately
- No GST invoice or reluctance to share GSTIN
- Refusal of video calls
- Catalogue photos copied from other brands' sites
- "Real gold" claims on imitation products
About us
Jagruti Imitation Jewellery has manufactured in Kandivali East, Mumbai since 2005, founded by Bahadur Chauhan. We invoice with GST, show our workshop on video, make samples to your changes, and show ready stock on a video call before you pay the balance. See about us.
Checking the Udyam (MSME) registration
Many small manufacturers register as MSMEs on the government's Udyam portal. A Udyam certificate shows the enterprise's name, type (micro, small or medium) and the activity declared, such as manufacturing. It does not prove quality, but it helps confirm the business is what it says it is, and whether it is registered as a manufacturer or a trader.
Putting it together
No single check proves a supplier is good. Together, a matching GSTIN, a real address, a live workshop video, a sample made to your change and a reference or two build a clear picture. The whole process takes a few days and can save a season's worth of trouble.
Keep verifying after the first order
Verification is not a one-time task. Re-check the GST status once a year, keep an eye on how consistently bulk goods match samples, and note whether lead times hold. Good suppliers stay good; problems usually show early.