What is the main risk for purchasing from unknown suppliers?

Warranty, Counterfeit products, service issues.

Purchasing from new suppliers means, they would be asking for advance payment - risk of them fleeing away with the money.

Unkown suppliers would not be the right person / dealer for the mentioned product or service, hence prices would be high and NO Warranty

Risk of having weak after sales service.

Quality of Product

Lead Time

Warranty

After Sale Service

  : To transfer the risk you can follow the following

1-  referring to your company rules and policies ,Evaluate the supplier with other competitors

2- Visit the supplier and check the actual capabilities ( finance,technical ,organization,capabilities ........) the will help you in such evaluation.

3- Get the the supplier reference list and you can visit those dealers and check the historical performance with  such supplier.

4- it is perfered to selected the supplier have the same experience in the same subject you need even if it is high offer and you can refer to your offers evaluation policy.

5- any advance payment must be against letter of credit (  Bank of L/C)

5- sign a contract with clear penalties for any delays or quality deviations or you can clear

such points in you PO

6- you can deduct a certain amount10 % as warranty by L/G bank letter

7- You can use FCC fixed cost contract to avoid any risk in prices but be careful in price reasonability

There are many other precaution ,but from my point of view the a.m points will be enough.

In procurement we always take supplier qualifications ver seriously,we qualify suppliers based on  their reputation,quality,delivery punctuality,and market presence.

Buying from unknown and unqualified suppliers put you at risk which should me metigated carefully,you must qualify suppliers before attempting to enter into business relationship with them.

Manny problems could arise such as below acceptable quality,wrong items supplied,long lead times....etc.

It might be More Expensive and Low Quality  Goods  , It might be  Of Low Quality goods

Every thing has pros and cons. First of all, when you are attempting to start business with a new party there should be some certain causes like low costs, longer warranty, fair terms of payment and delivery etc., otherwise no one signs a contract with a new party. Here, a new party refers to an unknown supplier. Hence, these attractive sides might turn into risk or uncertainty, it would be proven only as time passes.

1. Guarantee.

2. Warranty.

3. Post service.

1. Financial distress
2. Quality
3. Guarantee / Warranty

1-Timely Delivery

2-Quality of Item/Service

3-Warranty

4-After Sale services,, etc..

1- You may not Take the Required goods with the Required Materials .

2- You may have Problems in Returning or making stock rotation with the unknown supplier 

3-You may find difficulties in After sales Services ( IF Retail )

4- Never to proceed with payment in advance to take your order  other wide you may be Scammed .

5- you may be cheated in quality of the products .