| As I wrote in a previous article, the dismal economy | | | | them. If and when you do get someone on, ask |
| has led more people to look into perhaps making a | | | | them some industry related questions. For example, |
| living as an online retailer. This is not exactly a brand | | | | being in the computer business, I might ask a |
| new concept, as countless companies and individuals | | | | potential supplier if they had any motherboards which |
| have established successful internet businesses by | | | | took ddr3 and an Intel core i7 processor. If they |
| selling on eBay, Amazon, bid-and/or their own | | | | hesitated and didn't know what I was talking about, I |
| independent web store. Again, however, building a | | | | would worry. Or, better yet, I might ask if they had |
| successful online enterprise which is profitable is not | | | | any notebooks that featured an AMD Athlon II Core |
| the easy "make millions in your underwear" operation | | | | i4 processor. If they said yes, I would hang up |
| that some claim that it is. Running an online business is | | | | because there is no such animal! |
| hard work. It requires constant attention to detail, | | | | 4. Research their Physical Address |
| organization, and relentless research efforts. One of | | | | Take their address and put it into a search browser |
| the most common routes to e-business failure is lack | | | | or Google Maps. I did this once recently when I |
| of research and fact finding at all stages of business | | | | suspected credit card fraud from a customer. The |
| development. Whether the task is determining prices, | | | | address they gave me was for a children's center in |
| choosing a merchant credit card processor, or simply | | | | San Francisco. When I put it into Google Maps and |
| deciding what the logo will look like, successful | | | | the search engine, it came up as a Hotel. This was a |
| businesses research and investigate options prior to | | | | scam all the way. It saved me $500.00 for the |
| making their final decisions. | | | | computer I would have been out on. |
| While important in all decisions, perhaps the most | | | | 5. Ask about small sample order-and build from there |
| important area in which to perform exhaustive | | | | While it is common for wholesalers to have order |
| investigations is when choosing suppliers from whom | | | | minimums, most will allow you an initial trial order and |
| to buy your product (s). Many a business has been | | | | then build from there. The last thing you want to do |
| destroyed before even getting off the ground as a | | | | is put down your entire net worth down on a supplier |
| result of its founder believing that all suppliers with a | | | | you have never bought from before-no matter how |
| web presence are legitimate. Really, it is the other | | | | much all the other signs tell you they are legit. |
| way around. Many experts estimate that 70-80% of | | | | 6. Call the manufacturers |
| so called wholesale suppliers aren't 100% legitimate. | | | | This is probably the most for sure method of legit |
| While a good many are outright scammers who will | | | | suppliers. The manufacturer will know the distributors |
| not deliver any goods what-so-ever, many more are | | | | they sell to. |
| scammers of a slightly different type. With the latter, | | | | RED Flags-While not 100% proof that you are dealing |
| you will get a shipment of goods, but your order will | | | | with a scammer, the following are pretty common |
| contain inferior, replica, or broken products, or may | | | | among those less than reputable suppliers |
| be a partial order of what you THOUGHT you were | | | | 1. "We accept Wire transfer payment only" |
| getting. | | | | Be cautious of those who only except wire transfer |
| With so much fraud surrounding wholesale suppliers, | | | | payments. While there may be a few legitimate |
| you may be thinking, "If 80% of suppliers are | | | | suppliers that do not accept credit cards, not doing |
| scammers, how did all the successful online sellers | | | | so should send up the red flag. With wire transfer, it |
| avoid this trap when starting out?" The good thing is | | | | is difficult if not impossible to track it. Thus, if |
| that there are several things you can do to minimize | | | | someone rips you off or sends you less than what |
| - maybe even eliminate - the possibility you will fall | | | | you ordered, you basically have no recourse. In my |
| victim to the scams and dishonesty amongst these | | | | 2.5 years as an online seller, I have never-and will |
| companies. We will examine several techniques which | | | | never-deal with a company that is wire transfer only. |
| are used by business owners-myself included-to | | | | I would rather lose out on the chance of possible |
| weed out the good suppliers from the bad and the | | | | profits than lose a part of my operating capital. I deal |
| ugly. Keep in mind that the tips below are not meant | | | | with 5 suppliers currently-all of which are authorized |
| to supplement overall good judgment. Also, these tips | | | | distributors-all of which take credit card. |
| should be used as part as an overall strategy. One or | | | | 2. "Merchandise AS IS/ No Returns" |
| a couple of checks does not prove the legitimacy or | | | | Again, there is a reason why they are saying this. |
| illegitimacy of a potential supplier. However, when | | | | Now, there are some decent salvage dealers that |
| used together as a part of your evaluation strategy, | | | | have this policy. However, with salvage buying, you |
| you can reduce your risk to almost nothing. | | | | are buying customer returns and thus assume that a |
| Here are a few basic things to do to investigate | | | | certain portion of items will be defective. However, |
| potential suppliers... | | | | as a general rule I never buy from any company that |
| 1. Do a check to see where the domain is registered. | | | | has an AS IS/No Return Policy. When I was starting |
| Now, you will also usually get a name, but that really | | | | out, I did buy from one company that had this, but I |
| doesn't mean anything. The thing to look at is just to | | | | actually flew to visit them and inspect merchandise |
| verify that the company's domain is listed in the | | | | prior to buying. These days, I don't do much of any |
| same country as the business. You would be | | | | of this type of business anymore, because it creates |
| surprised how many fake companies are set up to | | | | too many customer headaches down the road. |
| look like a U.S. company, but are really located | | | | 3. "We can make you a ton of money on eBay" |
| somewhere else, like Nigeria or Ghana (Ghana is | | | | Beware of those companies advertising how much |
| becoming the new Nigeria in terms of scammers, | | | | money they can make you. This is almost always the |
| BTW) | | | | work of marketers who prey on well-meaning |
| 2. "Rip-off Report" | | | | beginning online sellers to get them to plunk down a |
| It's not scientific, but type the companies name into | | | | lot of money for a one-time sale. Companies such as |
| a browser, followed by "scam, or rip-off" and see | | | | this-if they send you anything at all-will often used |
| what you find i.e.: Chippies chips rip off. Or, use the | | | | bait and switch, charge you too much, and/or short |
| site to check a business. It is natural for a company | | | | you on your order. Real legitimate wholesalers will |
| to have a few negative things written about them, | | | | never make claims like this, because they know that |
| but check what the complaints are. If the comments | | | | a successful business is much more than just getting |
| refer to things like "didn't call me back," or "shipping | | | | products at a certain price. A vast majority of |
| took a while" then it is usually just a few hard to | | | | wholesalers really don't like to sell to eBay sellers |
| please customer. Obviously, though, if comments | | | | anyway. There are many reasons for this, but for |
| refer to not getting merchandise or inferior | | | | right now I will just say that legit wholesalers will not |
| merchandise, then it is a red flag. Still, be sure to use | | | | ever make any guarantee or even insinuate how |
| this along with other forms, because competing | | | | wealthy you will be. |
| companies have been known to use these services | | | | 4. "Buy from China @ unbelievable prices" |
| to try to slander their competitors. | | | | Never buy from a Chinese company unless you know |
| 3. Call them | | | | for sure they are legit. There are some good buys in |
| Call and talk to someone. Many scam sites will have a | | | | China, there is no question. But, for every legit |
| phony number-if they have one at all. Or, you may | | | | supplier there are 100 scams. People know this is a |
| get someone answering the phone that says "Hello?" | | | | common lure, so this is an extremely popular ruse. |
| If this happens, hang up and never do business with | | | | 5. |