We all know that life can be a dirty game. I'm sure you can remember that cousin who cheated on family game night when no one was looking. But even now that we’re all grown up, it can still be surprising how many people are trying to take advantage of someone's good nature or lack of insight.
Scammers love to take advantage of unsuspecting retailers, and there are two methods in particular that they’ve used for a long time, and to great effect. Today I’ll go over the "hot deal" and "fake goods" scams that plague the Internet. I’ll let you know how the perpetrators pull the wool over your eyes, and how you can avoid getting fleeced.
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Scam #1: The hot deal
The hot deal scam occurs when retailers are surfing the Internet in search of hot wholesale deals. Before long, they will stumble across a website and that promises $15 iPads or $39 Rolex watches.
The scam operates pretty simply with the following format: You're attracted to the supplier's deals because of their incredible prices, you place an order and hand over your money — often paying via Western Union or wire transfer — and then your goods never arrive. You've been duped big time!
The fact that people fall victim to this scam really highlights a huge misunderstanding about wholesale purchasing. Wholesale rates are probably not as low as you think they are. Often, branded goods are bought from wholesalers at 10 percent to 40 percent off the retail price. If you see a deal for less than that, you might be dealing with a scammer.
Scam #2: The fake goods
This scam results in people buying fake goods from suppliers who claim they are real. This comes with serious consequences if you get caught, and rest assured, you will! Check out this website below that sells in-car DVD players.
The website looks pretty professional and trustworthy, right? Well it's not! This screenshot was taken from a well-known counterfeit goods website.
Now, let me be clear about something: Most suppliers of fake goods do not try to trick you into thinking their goods are genuine. They openly admit to selling fakes, and they will deliver you whatever product you order with no fuss and no scams.
Selling fake goods, in some respects, doesn't make you a scam artist. Many of these suppliers are based in China, where there are fewer regulations about trading in counterfeits. This means that they can slip through the cracks without getting into trouble with local authorities.
My point is, not all sellers of fake goods are "scammers." While they may be ripping off the original brand owners, such as Louis Vuitton and Gucci, many of them won't rip you off. It's the suppliers who claim their goods are "authentic" and "authorized" that you need to watch out for! Who knows what else they are lying about? Often, you will end up with cheap, low-quality copies of the original item. In some cases, your order might not show up at all.
Regardless of whether you buy fake goods from a trustworthy supplier, or a dodgy one, the consequences (which I have covered at length in previous lessons) are the same: You'll lose your eBay account, you'll get caught by customs when/if you import fake goods, and you might face legal action.
How to become totally un-scam-able!
It's a big mission of mine to keep good honest people like yourself safe from scams, and in turn, suffocate the scam artists' business by educating all their would-be customers about how to become un-scam-able.
Here's my checklist of how to protect yourself from disreputable wholesalers:
- Thoroughly vet your suppliers' contact details: Call them, enter their physical addresses into Google Maps and check that they actually exist, and be sure that their email addresses use the company domain, such as info@wholesalebiz.com, rather than a free email service, such as wholesalebiz@gmail.com.
- Order a sample before you hand over any serious cash.
- Search for them in the Scams, Ripoffs, Frauds and Complaints section of the SaleHoo forum and see whether any negative comments show up.
- Check their refund policy and if they don't have one, be wary!
- Always pay for your wholesale orders with safe payment options. These include PayPal or a credit card. Western Union and wire transfers are not safe to use. If a supplier tries to convince you to pay using either of these methods because it will save you PayPal or credit card fees, ignore them! It's true that there are fees involved with safe payment options, but the cost of getting ripped off is higher!
- Beware of free wholesale directories and supplier review websites. These often are made by scammers, or scammers pay the review site owners to place favorable reviews.
Be sure to bookmark this page so you can easily reference it next time you're searching for new suppliers. If you're serious about avoiding scams, join SaleHoo for just $67 a year and get instant access to suppliers who have been manually verified by our team of experts to keep you, and your money, safe.
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