The most expensive sourcing mistake isn't a bad product — it's wiring money to a supplier you didn't verify, or to the right supplier's wrong account. A wire is final; there's no chargeback, no dispute button, no bank that will claw it back. By the time you realize the money went to a fraudster, it's gone. Due diligence is the cheap insurance you buy in the days before an irreversible payment — and the single most important piece of it is verifying where your money is actually going.

The Banking-Details Scam — and the $1 Wire That Stops It

Here's how good, careful buyers lose five and six figures: the salesperson you've been dealing with leaves the company, or goes rogue, or their email gets compromised — and you receive a perfectly normal-looking message with "updated banking details." You pay, on schedule, against a real invoice for a real order. The money lands in a fraudster's account, and the factory says it never got paid. It happens constantly, because the buyer trusted an email from a familiar name and never checked.

The defense is simple, and you should make it a hard rule:

  • Before any first payment — and any time banking details "change" — send a $1 test wire first. A single dollar to the exact account you're about to pay.
  • Confirm receipt through the supplier's accounting department, not your sales contact. You want a document from their finance/accounting team stating they received your test payment in that specific account — on company letterhead and stamped with the official company chop (the red company seal, which legally binds the company far more than a signature does). Back it up with the accounting department's own email address and a verbal confirmation on a call.
  • Only after that confirmed round-trip do you send the real money — to that verified account, and no other.
  • Treat any change in bank details as fraud until proven otherwise. New account number? Different beneficiary name? A switch to a Hong Kong or personal account? Stop, and re-verify from scratch through accounting — never accept new banking details on the word of the salesperson alone.

That $1 and one phone call prove two things at once: the account is real and controlled by the actual company, and you're dealing with the company's finance function, not a spoofed name in your inbox.

Make the Beneficiary Name Match the Company

On the wire itself, the beneficiary name must match the supplier's registered legal entity — the exact company name on their business license. Being asked to pay a personal name, a different "trading company," or an unrelated third party is one of the loudest red flags in sourcing. Sometimes it's a tax dodge; sometimes it's fraud; either way, your money is leaving your control on someone else's terms. If the name doesn't match, you don't pay until it's explained and verified.

Verify the Company Actually Exists

Before the first order, confirm the entity is real and is who they claim:

  • Get their business license and check the registered name, address, registered capital, and years in operation. In China, verify the unified social credit code; the legal entity name there is the name that belongs on your wire.
  • Confirm factory vs. trading company. A trading company isn't automatically bad, but you should know which you're dealing with, who actually makes the goods, and who you're really paying.
  • Verify certifications by number, not by PDF. A stamped certificate image is trivial to fake. Check the certificate number against the issuing body.

Verify the People and the Channel

Deals that live entirely inside one person's personal messaging app or a free email account are a risk. Look for a company-domain email, get a video call that shows the actual facility, and confirm your contact is authorized to speak for the company. If everything routes through a single individual who resists putting you in touch with anyone else — especially finance — treat that as a warning, not a convenience.

Structure the First Deal to Limit Exposure

Due diligence and payment terms work together. Never pay 100% up front to a new supplier. Use a sensible deposit/balance split, consider a letter of credit or platform trade-assurance for the first orders, and start with a smaller test order before you commit to volume. The goal is to keep your exposure small until the supplier has earned trust with delivered goods — not promised it in an email.

Keep the Paper Trail

Save the business license, the chop-stamped payment confirmation, the signed contract, and the email thread. If anything ever goes wrong, that documentation is the difference between a recoverable dispute and a total loss.

Vetting a supplier feels paranoid right up until the wire clears — and then it's the cheapest money you ever spent. Verify the company, verify the account with a $1 test wire and an accounting confirmation, and never let a "new bank account" email skip that step. The buyers who lose the money are almost always the ones who paid without checking.

Before you pay a new supplier, do you test-wire and verify the account through their accounting team — or has a "changed bank details" message ever caught you or someone you know? We'd like to hear how you verify before you send.