Many people think due diligence requires detective skills or access to special databases. While these qualities certainly help, I want to de-mystify the process of vetting a new partner and show some basic skills and techniques that anyone with an internet access can do in a short time. Therefore PPE Consultants is launching a series of articles over the coming days to teach you how to make a killer due diligence on future partners. However I must emphasize that these techniques only work if they are carried out with the right mindset. The greatest enemy you face is your own wishful thinking that can blind you and make you ignore hard facts. So please, if you implement the techniques I will write about, always try to be as impartial and objective as possible.
Additional practices to work with
Pick up the phone
If somebody comes to you posing as a distributor, government official, allocation holder, or anything that is verifiable, run the extra mile, and verify him. Let’s say someone claims to be a distributor for Kimberly-Clark. Ask for their companies name, and go ahead, call KC’s headquarter if this company is indeed affiliated with them or not. Many fraudulent activities can be dodged by a simple phonecall, yet many people do not do this.
Follow the trail of the money
Websites like D&B or the Companies House in the UK are goldmines in verifying your partner. If somebody offers you stock or even an allocation, always check if they have sufficient revenue they could have invested into buying products. I know that many companies use financiers or have a parent company, however always try to follow the trail of the money. If there is any product, someone had to pay for it. Find the company that could have issued the payment and figure out their relationship – if they have no verifiable relationship, leave.
Tiny bits of verifiable information
Talking about the weather seems like a boring topic, right? However, it is my standard practice if I want to verify where somebody is located. I complain a little bit about the weather in Budapest, and ask them how it is over there. After they tell me, I check it on my computer. Seems stalkerish? You bet it is, but since scammers usually lie about their nationalities and whereabouts, it is an excellent trick to see if they are indeed located where they claim to be.
Email > Whatsapp
Have you ever wondered why most scammers seem to prefer Whatsapp? It is indeed convenient and easy to use, but emails are way more informative. First of all, the lack of a corporate email address is already a huge red flag. Secondly, emails contain lots of valuable metadata, that can be used to further verify any new contact. If it comes to business I usually have this rule of thumb: if I have to send any official document or correspondence I use email. If I just want to make a quick check-in, I use Whatsapp.
Domain names and backlinks
Today most companies have some kind of an online presence in form of a website. This is a very good thing because these can be easily investigated on the internet. For example if I come across a new company, I usually run a simple check on them. First, I check the age of their domain name – scammers usually use fresh domains that either mimick existing brands or try to be overly pompous and attention seeking. Secondly, I check how many backlinks their domain name has (a backlink is a link on a different site to this address.) Real companies usually have several backlinks pointing to their sites from partner companies, online presence etc. You can check backlinks for free here.
And the most important of all: common sense
Let’s face the harsh reality: there is no free meal in this industry. If an offer seems too good to be true, it probably isn’t. Every day you receive spam promising you instant riches and you ignore them. Do the same with PPE offers too. If I come now to you and say, I would like to give you 10 million USD, you would probably wonder, where the catch is. This is literally the same thing. If a company that has allegedly enormous quantities ready to be sold and would like to give you 1%, ask yourself the following. Why would a billion-dollar company work with a random guy from the internet? And this is something that smashes dreams and it is indeed a bitter pill to swallow. But you have to work yourself up from the bottom. You have to establish connections, find your own supply channels and own clientele. Which requires lot of work. But it is rewarding in the end. As said, no free meal here.
Conclusion
These practices aren’t witchcraft, anyone can do them. Scammers usually cannot dodge these because they don’t expect you to actually pick up the phone or check a fake domain name. After all, the most common trick scammers do is to convince you that you don’t need to conduct your own research. And this brings us to the fourth part of these articles, which is a subject lot of people miss when it comes to PPE fraud and due diligence: psychology. Stay tuned, we’ll continue.
