Although there are many good wholesalers you must be aware of the wholesale scam that is just out to take your eBay business’s hard earned money. Although I don’t agree with or recommend selling fake goods there are some legitimate wholesalers from China that sell fake products. As long as you know what you are getting that is not a problem. Also, although this may raise a red flag, just because a wholesaler doesn’t take credit cards doesn’t necessarily make them a wholesale scam. In fact in many third world countries it is very hard to process credit cards so the only payment methods they can take is wire transfers or similar. When order from a company that only takes wire transfers always start out slow so you can test the company and the quality of their products. The wholesale scam that I am talking about are the so called companies that present themselves as wholesalers but provide no products at all. Many of these scammers have websites that make them look like a true company but that is just a front. There is really no company behind the site and no products.
Signs of a True Wholesaler
Here are some ways to make sure you are dealing with a true wholesaler and not a wholesale scam:
- Provide contact information - A real wholesaler will list their contact information on their website. Name, address, telephone, fax and email address.
- Answer phone professionally - They answer the phone like a business and don’t just say hello, howdy etc.. If they are a real business they will answer the phone by stating their full name and ask how they can help you.
- Want your business or resale license - True wholesalers only want to do business with true retailers. If when taking your order they don’t ask for your resale license, tax id number or business license you may be dealing with a wholesale scam.
- Are willing to give you samples - Once they have confirmed you are a true business most will be willing to send you product samples. If they hesitate or get shifty when you ask for samples this may raise a red flag.
- Answer their email - True wholesalers will normally always answer their emails. If they don’t answer their emails or all of a sudden stop answering their emails this may be a sign of a scam.
- Have products in stock – Although occasionally a product may be on back order the majority of the time they will have the products in stock. If the company you are dealing with says the items are on back order and you will not get them for x number of days/weeks but still wants you to pay. Think twice.
- Take credit cards - Although it is true that some wholesalers from third world countries cannot take credit cards most wholesalers within the USA will take them. Especially be wary of the switch. This is when a company tells you that they take credit cards but then when you go to order something is wrong with the machine or they cannot process your card and ask you to wire the money to them. This is a tactic that is often used in the wholesale scam.
- Website has original content - A real wholesalers website will have original pictures and text. If you find that they are using the same warehouse pictures and text as other websites on the web you may be dealing with a scammer.
The above should be used as a general guideline. If a company fails to meet one or more of the above criterial it doesn’t necessarily mean they are a wholesale scam but just that you should use precaution.
Steps you can take to protect your eBay business from the wholesale scam
- Fly before you buy: Take a trip to look at the the wholesalers offices, warehouses etc. True wholesalers are usually happy to have you come tour their operation. If you are planning on making a big order it is worth the ticket.
- Use Google earth to check address: Check the address of their business on Google maps or Google earth to make sure the address of the wholesaler is located in a business district and not a residential area.
- Ask for references: They may or may not provide you with references but it doesn’t hurt to ask.
- Order with a credit card: Use a secure method of payment. This way if there are any problems the credit card company may be able to get your money back.
- Copy website text into Google: Copy some the the text on their website into Yahoo or Google to see if it is just a copy website or an original.
- Call them: You should always call them before doing business. Never just order over the web.
- Check out the website on whoIs: Use the whoIs service to find out who owns the website and how long they have had the website. The website should be registered under the company name not an individual and will normally not be a brand new site.
- Get your wholesalers from a legitimate wholesale directory: Go through a legitimate wholesale directory like WorldWide Brands or Salehoo which double check the legitimacy of the wholesalers before listing them in their directory.
This is part 4 of a series of articles dealing with eBay wholesale. In Part 5 I will tell you how to get wholesale companies to want to do business with eBay sellers.
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