As an online retailer, one of the first things that you need to learn about is how to keep yourself safe from scammers who are posing as suppliers. In this lesson we will cover some of the signs to watch out for to ensure that you are always dealing with legitimate suppliers.
Keep in mind that if you are using suppliers from inside the SaleHoo supplier directory, you won’t need to run background checks or worry about whether your supplier is trustworthy – we have already done all the leg work for you. But if you aren’t a SaleHoo member, or you want to use a supplier that is not listed on our directory, this lesson is essential for you!
We're all afraid of losing money to wholesalers who turn out not to be the real deal. The horror stories can certainly be very off putting – especially to those just getting started. The trick is to spot it and stop it before it's too late!
The 6 signs you are dealing with a crook
1. The wholesaler doesn't sound business-like or professional when answering the phone. For example, he or she will answer with a plain 'Yes?' or 'Hello?' without identifying themselves or the business name.
2. The wholesaler doesn't request your business license or Sales Tax ID during the initial contacts. Most true wholesalers will require one of these. But keep in mind that a Tax ID is only necessary for US sellers who wish to buy from US wholesalers. If you live outside of the US, you will not need a Tax ID.
3. The wholesaler gets shifty when you request a product sample. Most wholesalers are only too happy to offer a sample of their product (though you will need to pay for it) so if they do not offer this be careful and question their reasons for not offering one.
4. The wholesaler claims to take a secure form of payment (such as credit card or PayPal) but later turns around and says they only accept wire transfer or Western Union which are not safe payment options for you. Not all wholesalers that take Western Union and wire transfer are scammers, but this is the most common way scammers operate and you should always steer on the side of caution if you are asked to pay by these methods when not having dealt with or knowing the person first.
5. Their website offers no physical address or contact phone for you to get hold of them. Be blunt, ask them for a contact address and phone number and if it is ok if you come in and have a look around their offices. If they are serious this will be no problem at all for them.
6. They claim they don't currently have stock in and still expect you to pay up front. To get around this problem, you can ask for photographic evidence of the supplier's stock, taken with that day's newspaper in the background. This doesn't always work, but it's worth a try!
Although these are not hard and fast rules, you should certainly proceed with caution if one or more of these points apply to a new wholesale contact you have made.
Need help?
That’s it for this lesson. Remember, if you are ever unsure about a supplier, post about them on the Community Forum and see if any other SaleHoo members have used them and have some feedback for you. Our support staff can also run a quick background check on the supplier for you.
If you want to eliminate the guess work from wholesale sourcing, join the SaleHoo Wholesale Directory and get instant access to 8000 of the most trusted suppliers on the web.