When making an online purchase, we always strive to find those elusive "verified" vendors. But what does it really mean for them to be "verified"? How does it impact our transactions, and why is it so important for government buyers? Across all social media platforms, verification (that little checkmark next to the username) is synonymous with validation, acceptance, and recognition. It signifies that the person is who they claim to be. The same applies to vendors. In this blog post, we explore why opting for verified vendors is of utmost importance and shed light on the consequences when this step is overlooked.

The verification of a vendor depends on the factors considered relevant. For instance, in a commercial marketplace where transactions are B2B or B2C, vendor verification may involve the submission of official documents such as an ID for individuals or a constitution document for businesses. However, when selling to the government, a government marketplace (B2G transactions) must verify compliance with additional factors to ensure that transactions and the parties involved are as transparent and secure as possible.

For example, Amazon, the world's largest commercial marketplace, requests a series of documents from its new vendors to assess whether they qualify as verified vendors. This typically includes providing proof of business (e.g., Secretary of State registration, SAM.gov registration, business license, W9, or other government-issued forms to demonstrate the business's existence). However, government marketplaces like Glass Commerce (GCommerce) not only verify the same documentation but also its accuracy by cross-referencing it with their own specific databases (e.g., United Nations Black List, SAM Excluded List, and Department of Commerce List). When dealing with transactions between governments and the private sector, conducting this dual verification is crucial because failing to do so could have severe consequences.

In addition, we've identified 4 reasons why it's important not only to choose verified vendors (for instance, if you buy from an ecommerce business) but also to buy from marketplaces, whether they're commercial or government-oriented, that prioritize vendor verification.

1. Risk Mitigation: Safeguarding Your Purchases

Choosing verified vendors serves as a robust risk mitigation strategy. By conducting thorough background checks and due diligence, buyers can identify potential red flags, ensuring that they engage with vendors who uphold ethical business practices. This proactive approach minimizes the risks associated with fraud, substandard products, and other detrimental factors that could jeopardize the integrity of the transaction.

This point becomes even more significant when we consider the scenario where a government buyer wants to make a purchase through a government marketplace. The government buyer is entrusted with safeguarding public interest and managing public resources, making each transaction a matter of importance. It's not just about the transaction amount; it also pertains to who and how they decide to carry out that transaction. 

2. Quality Assurance: Elevating Product and Service Standards

Verified vendors often adhere to stringent quality standards and industry regulations. By aligning with such vendors, buyers can ensure that the goods or services they receive meet the expected benchmarks. This commitment to quality not only safeguards the business's reputation but also enhances customer satisfaction, fostering long-term relationships and repeat business.

The quality of products and services is a factor every buyer considers, but even more so for government buyers. Resources are limited, and in the government's case, they are not only limited but also public. Every purchase must adhere to the fundamental principle of efficiency –the ability to accomplish a task or achieve a goal with the optimal use of resources, minimizing waste and maximizing output. Purchasing goods and services from unverified vendors may lead to acquiring low-quality goods that do not meet the standards and needs of the public sector, inevitably resulting in a waste of public funds.

3. Efficient Supply Chain Management: Streamlining Operations

Vendor verification is integral to maintaining a streamlined and efficient supply chain. Verified vendors are more likely to have robust processes and systems in place, facilitating smoother transactions and minimizing disruptions. This, in turn, contributes to enhanced operational efficiency and agility, crucial elements in today's fast-paced business environment.

This point is crucial whether you're making a purchase through an ecommerce platform or a marketplace. When buying from a verified ecommerce store or a marketplace with verified vendors, you can be confident that the vendor has undergone a certain procedure to prove they operate a business effectively, significantly reducing the likelihood of encountering any issues in your transactions.

The need for swift, unhindered transactions is even more important for government buyers. Once again, it's particularly relevant for them to make their purchases through verified vendors. Failure to do so poses the risk of delays or obstacles in their transactions.

4. Reputation Management: Building Trust and Credibility

It's important to make a distinction between vendor verification and reputation. Verification occurs when it's confirmed that the vendor meets certain requirements related to commercial and legal keypoints (ensuring the vendor is who they claim to be, their business complies with local and federal regulations, not subject to disqualifications, etc.) Reputation is built through sales, as it's the buyers themselves who define the vendor's reputation. Vendor verification doesn't make them good or bad; it makes them reliable and compliant with standards.

There are multiple possible scenarios: verified vendors with bad reputations, verified vendors with good reputations, unverified vendors with bad reputations, and unverified vendors with good reputations. Ideally, it's best to buy from verified vendors with good reputations and avoid unverified vendors with bad reputations.

While many marketplaces offer the option to check the reputation of vendors (e.g. MercadoLibre, the largest marketplace in Latin America, assigns a percentage to each vendor reflecting their reputation based on their performance), a simple way to find out their reputation is by checking reviews from other buyers. It is said that 93% of consumers read online reviews before making a purchase and 94% say an online review has convinced them to avoid a business. 

We believe that verification and reputation go hand in hand. That's why executing the double verification we mentioned earlier, aiming for a comprehensive check, is so important. E-commerce businesses must comply with all the legal requirements necessary to operate a business, and provide the best possible service to garner positive reviews. Marketplaces should not only carry out the traditional verification of all vendors on their platform but also assess their performance, rate them, and make that information available to potential buyers.

This also streamlines the buying decision. If a buyer accesses an ecommerce platform or a marketplace and quickly sees that the vendor they want to buy from is verified and has good reviews, they are likely to complete the transaction easily. This becomes even more evident when dealing with a government buyer.  While a traditional buyer might take a few minutes to ponder the convenience of purchasing from an unverified vendor or one with poor reviews, the government buyer doesn't hesitate. In a fraction of a second, they've abandoned the cart and are on the lookout for a reliable vendor. That's why the government buyer should choose to make purchases through government marketplaces, where none of these issues could arise because these platforms were designed and created taking into account all the specific concerns of the public sector.

We believe that the journey towards a seamless online transaction involves meticulous vendor verification. For both traditional and government buyers, this process is not just a precautionary measure but a fundamental strategy to ensure transparency, efficiency, and trust in the ever-evolving landscape of online commerce. As we navigate this digital era, prioritizing verified vendors and embracing the principles of trust and transparency will continue to shape the future of online transactions.

This blog was written by Gisela Montes, GovTech Community Lead at Glass.