I thought I would add this post to help newbies avoid getting scammed.
The two major mistakes I see newbie online business people make is:
1. Sending money to companies or people they don't know or haven't investigated thoroughly.
It is relatively OK to send money wires to businesses you know and or have gleaned from this forum and others that they are legit companies. You still want to do your due diligence There is always a risk though.
The absolute safest way is to visit them personally and hand them money with your product in sight or in your hand. This in my opinion would be the only way to do business,especially the first time, with overseas suppliers.
Please, for your sake, DO NOT send money blindly. Your risk increases exponentially x100 when you do this.
I have seen 3 posts from members here, this week, crying after they have made this major blunder.
2. Money wires are very treacherous. You must have a high level of trust to do this. There are companies you can do this with but please! you have to have a high level of trust with the company. There are companies your can do this with at minimal risk. Evertek and geeks ( The same company) would be one of them. They allow you to dropship in this manner. There are many others but you must do you due diligence.
If you are pre-selling. Selling on eBay without the product in hand is a surefire way to get yourself in trouble. You can do this but its tricky with the timing.
I sold 40,000 dollars worth of processors last year in this fashion, but I was nervous a lot of the time and almost got myself in trouble with a buyer from the UK. This happened because my seller ran out of stock a few times.
I mention this because I think one of the people here who got into trouble was doing this and got desperate so ordered from a shady seller.
Its better to back out of an eBay transaction and apologize profusely to your buyer. I have even sent them 5 dollars for their trouble which kept me from getting a neg and even gave me some positives(feedback).
If you have been scammed and have lost 1,2 or 3 thousand dollars; chalk it off as a loss. Make a ton of money and write it off your taxes. I am pretty sure you can write it off over 3 years so you will benefit from it for that time on your tax bill.