How to vet a medical supply vendor in ten minutes

I have been on both sides of this. I have bought from vendors I had never heard of, and I have been the vendor a buyer had never heard of. The buyers who did the checks below in the first ten minutes saved themselves months of grief. The ones who skipped them sometimes paid for product that never arrived, or arrived and could not be sold.

None of this requires a subscription or a consultant. Most of it is a browser and a phone.

1. Look them up on SAM.gov. The federal System for Award Management is free to search, and a vendor that sells to any government buyer should be there with an active registration and no exclusions. A clean SAM record does not make a vendor good, but an exclusion makes them a hard no.

2. Check FDA establishment registration and device listing. Masks, respirators, test kits and most of what sits in a supply closet are medical devices, and the facility that makes them has to be registered with FDA and have the product listed. If the vendor cannot point you to the registration number of the factory behind the box, they may not know who made it either.

3. Ask for the 510(k) or EUA number. Most consumables in the categories that matter are FDA-cleared or authorized, and the clearance belongs to a specific manufacturer and product. Ask for the number, then look it up yourself in FDA's public database and confirm the name on the clearance matches the name on the box.

4. Ask for a certificate of analysis and a lot number. A real manufacturer tests each lot and issues a certificate. A vendor who can produce a certificate for a specific lot, with the lot number printed on the carton you will receive, is selling product they actually control.

5. Ask for the factory name. Not the brand, the factory. A broker who will not name the factory is either protecting a margin they do not want you to see or does not have a direct line to the source. Either one is a reason to slow down.

6. Ask for the case and pallet configuration. How many boxes in a case, how many cases on a pallet, how many pallets on a truck. A vendor who answers in seconds has shipped this product before. A vendor who has to get back to you is quoting from a spreadsheet someone else sent them.

7. Compare landed cost, not headline price. Get the freight, the fuel surcharge, the lift gate fee and anything else that will appear on the invoice, then divide the total by the number of cases. The cheapest quote on the first page is often the most expensive one on the last page.

8. Call a reference, and pick the reference yourself. Ask for three customers, then ask for the one who buys the most of the product you are buying. A vendor's chosen reference will always be happy. The one you pick is the one that tells you something.

9. Read the payment terms as a signal. A vendor that asks for 100 percent wired up front from a new customer, with no escrow and no inspection, is asking you to carry all of the risk. Established suppliers ask for a deposit and take the balance on delivery or on terms, because they expect to see you again.

10. Match the name on the invoice to everything else. The entity on the quote, the entity on the invoice, the entity on the bank wire instructions and the entity on SAM.gov should all be the same. When they drift, ask why before the money moves.

Where this goes wrong

Most of the vendors I have had problems with would have passed three or four of these checks. Very few would have passed all ten. The checks are cheap. The problems are not.

The second place it goes wrong is urgency. Every bad deal I have seen came with a reason the buyer had to decide today. A legitimate vendor with real inventory does not need you to skip the lot number.

The one question I always ask

After all of the above, I ask: where is the product right now?

Not where it will ship from, not where it is being produced. Where is it, physically, today, and can I send someone to look at it?

A vendor with product in a warehouse will give you an address. A vendor with a relationship to someone who might have product will give you a story. The answer to that one question has saved me more money than any contract I have signed.