How to Vet Scrap Suppliers and Avoid Getting Scammed

Scrap trading can be profitable — but only if you know how to avoid getting scammed.

Most beginners lose money because they simply don't know how to verify a supplier.

I learned this the hard way, losing $21,000 to a fake supplier in China.

In this article, I'll give you the exact framework I developed afterward — a framework that would have saved me, and has since saved traders hundreds of thousands of dollars.

Let's get into it.

Why Scrap Scams Are So Common

Scrap is one of the easiest industries to scam because it has:

• high-value commodities
• fragmented supply chains
• little regulation
• international trade complexity
• beginner traders chasing deals
• fake directories full of "suppliers"

Scammers are not amateurs — many run organised operations with:

• rented warehouses
• fake SGS reports
• rehearsed sales teams
• fake BLs
• staged yard visits
• honey traps
• stolen shipment photos
• manipulated documents

This is why supplier vetting is not optional — it is essential.

STEP 1 — Check If the Country Realistically Exports That Scrap

This alone filters 70% of scams.

For example:

When I got scammed for aluminum wire scrap, I later discovered:

Meaning the deal was impossible from day one.

Always ask: "Is this country known for exporting this commodity?"

If the answer isn't a confident yes — walk away.

STEP 2 — Verify Shipment History (The #1 Most Important Step)

If a supplier claims:

• "We export 3,000 MT monthly"
• "We are a top exporter"
• "We ship globally"

…but has zero shipping records?

They are NOT an exporter.

Inside Vujis, you can:

• search the company name
• check all their shipments
• verify HS codes
• identify real buyers
• confirm repeated orders
• see port-to-port patterns

Shipment history is the single most reliable indicator of legitimacy.

If I had Vujis back then, I never would've sent money.

STEP 3 — Never Work With Suppliers Who Refuse Inspection

If a supplier refuses:

• SGS
• Intertek
• BV
• CCIC
• or ANY certified inspection…

Legitimate yards WANT inspection because:

• it increases their selling price
• it reduces disputes
• it proves quality to new buyers

Scammers avoid inspections because:

• the stock doesn't exist
• they don't control the yard
• they plan to switch the product later
• they're brokers pretending to be suppliers

This rule alone will save you years of mistakes.

STEP 4 — Analyse Payment Terms Like a Professional

The biggest red flags:

If you want to continue despite risk (not recommended):

You MUST fly to the yard and:

• watch loading
• witness testing
• confirm sealing of the container
• photograph container numbers
• verify BL issuance with the carrier

But even then — do NOT trust without shipment history.

STEP 5 — Understand Fake SGS Tactics (This Is Where Most Beginners Get Trapped)

This is how scammers fool even experienced traders:

Tactic 1: Fake or Recycled SGS Reports

Scammers take old SGS reports and edit:

• purity
• dates
• LOT numbers
• company names
• signatures

They look real until you zoom in.

Tactic 2: Real SGS for Fake Products

Some suppliers perform legitimate SGS tests…

…but on small batches of high-quality scrap they do NOT intend to ship.

SGS only tests what they are shown.

Not the actual container unless you control the sampling.

Tactic 3: Bribing SGS Staff

This happens more often than people want to believe.

A supplier may quietly pay:

• SGS technicians
• Intertek inspectors
• small local labs

You receive a real-looking certificate —

…but the material is NOT what was tested.

Tactic 4: Fake "Live Testing" at the Yard

Scammers stage tests:

• melt tests
• spark tests
• conductivity tests

They use good stock from the top layer,

…but load trash later.

This is exactly what happened in my $21,000 scam.

Tactic 5: The Only Real Protection — ORGANISE SGS YOURSELF

You MUST:

• contact SGS directly
• pay SGS yourself
• choose the inspector
• require random sampling
• demand sealed samples
• confirm the correct yard address

If the supplier refuses independent testing?

STEP 6 — Verify All Documentation Before Sending ANY Money

Ask for:

• past BLs
• packing lists
• commercial invoices
• export license
• yard photos with metadata
• original HS code declarations
• repeat shipment history

But remember:

Documentation is the easiest thing to fake.

Shipping records are NOT.

Cross-check everything with:

• HS code patterns
• known export lanes
• consistency of dates
• shipping volume logic

If ANYTHING looks strange, do not send money.

STEP 7 — Vet the Person, Not Just the Company

Scammers hide behind:

• rented offices
• borrowed warehouses
• fake employee IDs
• generic WhatsApp numbers

Real checks:

✔ Video call from INSIDE the yard

Not outside the gate.

✔ Show today's stock

Not old photos.

✔ Ask who the top 3 buyers are

Then verify these buyers in Vujis.

✔ Ask for unedited photos (no forwarding)

Metadata reveals the truth.

✔ Ask to speak to the yard owner

A scammer will avoid this.

Should You Use Credit Insurance for First Shipments?

Short answer: Yes — if available.

Credit insurers like:

• Coface
• Atradius
• Allianz Trade

…can protect you against buyer non-payment.

But here's what beginners don't realise:

1. They only insure reputable buyers

Smaller buyers often get rejected.

2. They may only insure part of the shipment

E.g., $20k out of $60k.

3. They rely heavily on buyer financials

If the buyer has no financial footprint, no insurance.

So credit insurance is great,

…but it is NOT a replacement for:

• supplier verification
• inspection
• shipping history checks

It is a supporting safety layer, not your foundation.

The 10 Most Common Scrap Scams Beginners Fall For

1. Half-price copper/aluminum/brass
2. "We export 3000 MT monthly" with zero records
3. Fake SGS
4. Fake BLs
5. Brokers posing as yards
6. WhatsApp "deals"
7. Honey-trap hospitality
8. Stage-managed warehouse visits
9. Payment urgency traps
10. Material switching after inspection

99% of these are avoidable when you verify shipment history.

Beginner's Pre-Payment Checklist

Before you send even $1:

If ANY answer is "no,"

Why Shipping Data Is the Most Powerful Fraud-Prevention Tool on Earth

Had I checked shipment data in 2020:

• I'd have known China doesn't export that scrap
• I'd have seen the supplier has ONE shipment record
• I'd have walked away instantly

Shipment history reveals:

• real exporters
• fake exporters
• HS-code truth
• trade lanes
• repeated buyers
• consistency
• legitimacy

This is why I built Vujis —

…to help traders avoid the loss I went through.

FAQs

Final Thoughts

Scrap trading is not dangerous —

ignorance is.

If you follow this framework,

you reduce your risk by 90%.

Verify first.

Trade second.

Profit third.

Read the Full Series