Protecting Yourself from Illegitimate Wholesale Suppliers

While many fantastic wholesale sources can be found online, there are also a huge number of sites developed specifically to scam sellers looking for a good deal.

So how do you tell whether you are dealing with a real wholesale supplier?

First of all:

A supplier may be selling fakes of big name brands but this doesn't necessarily mean he is out to scam you. There are many suppliers in China and other countries selling fakes, but as long as you realize what you are buying, that is not a problem in itself.
The supplier may say they can only accept Western union and wire transfers as payment. These are insecure payment methods, but for Chinese suppliers, these are often the only two options available as credit cards (and therefore Paypal) are almost impossible to get. You should always take the precaution of ordering only a small amount when dealing with a supplier who only takes Western Union and wire transfer for the first time, but many legitimate manufacturers and wholesalers use these methods out of necessity rather than because they are illegitimate.

The Warning Signs

Warning bells should start ringing if you come across any of the following:

Fake address - either it doesn't exist or it exists in a poor or residential area.
No contact details listed on the website.
When you call, the telephone is answered by an individual who does not identify himself on picking up the phone.
You are not asked for a business or tax number.
The company suddenly stop replying to your emails.
Parts of the text or images on their site are copies from other websites.
When you place an order, the company claims they do not have any stock, but want to receive the money before ordering any in.
Your contact becomes shifty when you ask for a product sample

Steps to Protecting Yourself

To find out whether you are dealing with a scammer, try these tips:

Copy and paste some text into Google. If it is copied from another site, you'll soon discover it in the search results.
Check that the website gives a full business name and a registration number.
Ring them to verify the phone number given is good, but don't accept a mobile phone number as enough, all companies should have a land line number.
As for a photograph of the stock with the company logo in the background. Go to www.coolwhois.com and search for the name of the website. A legitimate company will have been operating for over a year (at least!) and their expiration date will be for several years time. Most legitimate companies reserve their domain names for 3-5 years or more at a time.
Use secure payment methods such as Escrow, Cod and Paypal Verified whenever possible.
Ask other sellers what their experiences have been with the company on forums.

About the Author: SaleHoo is one of the fastest growing product sourcing portals on the internet. It contains a database of drop ship, wholesale, closeout and manufacturing suppliers offering thousands of product suppliers to consumers! Located at http://www.salehoo.com, visitors are allowed to sign up for unlimited and lifetime access to the completely searchable database of products and suppliers. The database is regularly updated, ensuring that the latest retail products are always available for purchase and SaleHoo carries the BBB Reliability Seal!

Join SaleHoo Today for their Special Startup Offer!

Recommended Resources

SaleHoo Free Resources
Not sure what to sell? Fretting over customs duties and shipping costs? Having trouble getting traffic to your eBay listings? Wondering whether you need a tax ID? The answers are all right here.
How to Make Money on eBay eBook
Sky High Auctions Selling on eBay Course

Selling on eBay