Avoiding Fake Wholesale Scams
Before I even got my start selling on eBay when I was young, I was scammed two times. I thought I had it all figured out. I thought the payment methods were safe. I had an idea ingrained in my head that people were inherently good and there was no way somebody would try to steal my hard earned money. Well, I was wrong.
Finding quality wholesale and dropship sources is hard enough. Trying to sort through thousands and thousands of scams makes it even harder. We have come along way with regard to online transactions and these payment gateways are constantly looking for ways to protect buyers from fraud and scams online. Unfortunately they just can't keep up because there are always loopholes.
For instance, in my first transaction, I was purchasing overseas from China. I did a lot of research on the company before I sent them any money. I searched forums, spoke with people who had dealt with them, and they were even designated as an "Approved Supplier" on Alibaba. After all my research and some great conversations with the company, I felt confident enough making my purchase.
They encouraged me to use Western Union because apparently it's "difficult" to get access to their money in PayPal accounts in China. So I sent them my money through Western Union. The next day they sent me a tracking number for my order. I was so relieved to see this come through. Unfortunately, it wasn't my tracking number. It was a tracking number for another shipment to the US. For several weeks after I followed up with the supplier to no avail. Long story short, they never got back to me and I had no recourse whatsoever.
These guys do exist out there, foreign and domestic, and they can be very hard to spot.
My next order was from a supplier in the United States. As a shoe fanatic, my natural product of choice at this time was Nike shoes. I did even more research on my next supplier, spoke to individuals who had dealt with them, and spoke to the company several times. I felt more comfortable with this transaction since it was taking place over PayPal. I went ahead and placed the order.
I received my order within 4 days, I was so relieved to see it at my front door. However, when I sold my first pair on eBay I received a negative feedback rating and a "Trademark Infringement" email from eBay warning me to remove all active listings because my products were counterfeit. Turns out the "supplier" sent me fake shoes - even after I was assured several times that they were authentic.
I immediately called the supplier and told them my story. They told me that eBay must have been mistaken or I must have gotten my shoes from somewhere else because they only sell authentic shoes. I took to the internet to find out if they were indeed knock offs and they turned out to fit the bill for counterfeit shoes. I was out even more money and stuck with 10 pairs of fake, worthless shoes.
Although these guys are not quite as bad as the aforementioned Scammers and Fakers, The Posers can be the most difficult to identify and can string you along for years. In my words, posers are those who act as wholesalers or dropshippers of products and claim to be THE direct source in their industry. Unfortunately, many times these guys are nothing but middlemen who are acting as intermediaries between you and the real suppliers.
Don't get me wrong, sometimes you have to work with these guys. There are manufacturers and distributors out there who are so large that they will only work with middlemen and larger buyers to distribute their products to another layer of buyers. Consider companies like Sony or Samsung. Obviously it's safe to assume that retailers like Best Buy have direct contacts with these companies and get rock bottom prices when buying wholesale because they purchase such large quantities. However, do you think Sony or Samsung is going to sell to somebody like you and I who only want about 10-20 TVs at a time? No way. This is where middlemen come into the equation.
However, when you're not dealing with a situation like the one above, there is almost always middlemen out there who are unnecessarily standing between you and higher profits. They buy from the real sources and mark up the prices that they sell to you, collecting their share along the way. You will struggle to make any money online unless you wiggle your way through the posers and penetrate the direct source.
After constant battles and upsetting experiences with all three of the above types of "suppliers" I was very unsure of where to turn to find quality suppliers who I could trust and get good pricing from.
In my search for genuine suppliers I had come across "wholesale directories" who claimed to have thousands and thousands of legitimate wholesale and dropship sources. Unfortunately, they usually charged a hefty fee for this information. But I literally was at my wit's end and had no other options. So I decided to set aside a little more money and invest in a wholesale directory called Worldwide Brands. I paid $299 for a lifetime membership. The only thing that really encouraged me to buy was the fact that it included a 100% money back guarantee if I wasn't satisfied. If all else failed, I could just ask for my money back. Thankfully I never had to.
I've used this directory for the past 9 years to find reliable suppliers for all my businesses. They never fail to have a quality connection for any product I'm looking to source. What seemed like a large investment of $299 has been the most rewarding investment for me ever. If you want to learn more about this company I would encourage you to read a Worldwide Brands review. Also, Worldwide Brands has offered an exclusive $30 coupon to Dropship Critic readers so you can save on your order.
One last tip: Don't forget that because this is considered a business expense you can write this off come tax season!