When you’re in charge of verifying small businesses, it can be challenging to know who to trust.
A contract with the wrong vendor, customer, or partner could cost you significantly. Small businesses that serve as suppliers for others face similar risks.
Many greeting card companies learned this lesson the hard way in the spring of 2021. Paper Source, a stationery chain with 158 locations across the United States, began placing larger orders with its vendors. A few months later, Paper Source filed for Chapter 11 bankruptcy protection from its creditors.
Now, payments to these suppliers (many of whom are female-owned small businesses) are on hold. Some suppliers are at risk of not getting paid at all. The bankruptcy court will restructure the company’s $100 million in debt and decide when (and if) to pay the past-due invoices.
To avoid supply-related risks or working with an unverified company Markaaz provides services designed to allow businesses of all sizes to check their suppliers, customers, and partner businesses for compliance, business health, and business intelligence data. Some companies spend 40 hours or more on supplier verification efforts.
Many small businesses turn to search engines like Google, and web directories, like Yelp when they need to research potential suppliers and business partners. Unfortunately, these online search solutions fall short and can leave your business exposed.
Markaaz can dramatically shrink that time to verification with its Enterprise Services.
The shortcomings of search engines for supplier verification
Search engines and web directories can be speedy and convenient. They are also free to use. For this reason, they are a popular choice for business owners and managers who need to vet potential vendors, customers, and partners.
A sizable 40% of small businesses verify suppliers via this sort of desktop research. Yet, these online tools are unreliable where supplier verification and risk assessment are concerned. They provide little to no actual insight into a potential supplier’s legitimacy, its likelihood of failure, the effectiveness of its service, or its financial stability.
When you rely on Google and Yelp searches, it can hinder your vendor validation efforts in four meaningful ways.
1. Missing information
Search engines and web directories can reveal significant information about a business, its owners, and its brand reputation. Yet when you rely on these tools as your sole sources for supplier or partner research, it’s easy to miss critical details or red flags.
You can only access certain publicly available information via these desktop resources, and you likely will not uncover valuable risk assessment data, such as:
- Business Risk Scores
- Identity Verification of Owners
- Know Your Customer (KYC) Checks
- Know Your Business (KYB) Checks
- Anti-Money Laundering (AML) Checks
- Tax Information
- Business Licenses, Permits, Bonds, etc.
2. Irrelevant information
When you or someone from your team needs to research a potential supplier, too much information can be nearly as problematic as a lack of details. Search engine results on potential suppliers can overwhelm you with irrelevant information. This data overload can lead to a confusing, time-consuming supplier verification process that offers little in the way of protection.
3. False sense of trust
Businesses commonly conduct online searches to try to uncover negative news or bad reviews about potential business partners. But a lack of negative search results does not translate to a reliable supplier or customer. When you work under the assumption that it does, you could develop a false sense of trust that exposes your business to:
- Supplier fraud and scams
- Suppliers that require payment upfront but fail to fulfill orders
- Unpaid invoices
- Financially unstable vendors or customers who go out of business
- Suppliers that fail to comply with government regulations
- Poor quality of goods and services
4. Lack of future monitoring
Conducting a thorough verification process before onboarding a new supplier is a critical step that small businesses can’t afford to skip. But that initial research will only protect you so much. Business risk changes over time, which makes ongoing supplier monitoring critical to the long-term success of your business.
Google and Yelp searches have significant shortcomings in this area. Many businesses that rely on search engine verification fail to keep an eye on the health of their supplier relationships after the initial research phase.
Markaaz: A better way to verify suppliers , customers, and partners
Markaaz offers an innovative solution for businesses needing a better supplier verification system. Through Markaaz, you can make well-informed decisions with confidence.
Markaaz provides users with unlimited access to:
- The world’s largest repository of small businesses: Markaaz features over 300 million businesses in its Directory.
- Business risk scores: With scoring and supplier risk assessment powered by Equifax, it’s easier to manage the supply chain and customer onboarding risks.
- Supplier monitoring: Markaaz can notify users whenever a supplier, customer, or other business partner experiences a relevant status change. For example, negative news, sanctions, or a change in credit risk would trigger an alert.
- Markaaz also allows you to verify your own business free of charge. When you activate your company on the Markaaz Dashboard, it can provide your brand with added credibility. You may also become more visible to potential customers and business partners searching for your business’s products and services.
The bottom line
When you rely on do-it-yourself online research or data from large traditional data providers, you expose your business to risk and a host of other potential problems. A supplier verification process that depends on tedious searches can cost your business in multiple ways. Missed opportunities, fewer sales, and reputation damage are just a few of the risks you face when you contract with an untrustworthy business partner.
Markaaz offers a better way to help your business build a robust supply chain and customer network. Best of all, the platform is affordable. So, costs won’t prohibit small businesses from taking advantage of its game-changing technology. Sign up for free today.
Hany Fam, Founder and CEO, Markaaz
About the author: Hany Fam is the founder and CEO of Markaaz and a transformational leader with a track record of building global platforms and businesses. He is an Official Member of the Forbes Business Council and a Member of The World Economic Forum’s Global Innovators. Fam is focused on creating a positive and sustainable impact for small business owners through the world’s first global platform to verify and connect small businesses and the network of partners that support them. Before founding Markaaz, Fam held global leadership roles in business transformation, value creation, and technology, gaining depth of experience in payments, B2B platforms, enterprise partnerships, and SaaS. He served as CEO of AXA Global Enterprise & Partnerships, Founder & President of Mastercard Enterprise Partnerships, and President of Mastercard UK & Ireland Markets. He also held roles in Applied Technology, including as the CTO of Toshiba International’s Heavy Industrial business in Australasia. Under Fam’s leadership, Mastercard Track was launched, the first and only global trading platform connecting every supplier and buyer on the planet to simplify and automate the exchange of payments and related data.
