When most people look for suppliers these days, they start with Google. Yet the world of online suppliers can be a murky one and sadly, many budding entrepreneurs weigh in out of their depth with disastrous consequences. According to Simon Slade, manager for SaleHoo Product Sourcing, there are two very serious risks associated with sourcing on the internet:
- Inadvertently buying fake designer brands
- Fraudulent suppliers who take advantage of insecure payment methods to rip buyers off.
“Many of the sellers who turn to the internet to find suppliers do so because they are completely new to the industry and they don’t know where else to start,” says Slade. “They are not even aware of the potential dangers that exist – so they don’t even know they need advice in the first place.”
Slade believes that educating yourself on the market should be a top priority for anyone interested in buying wholesale. Knowing how to perform a background check on a supplier website is essential for anyone going solo and is something SaleHoo stresses to its members. “Sellers always need to be on the lookout for new sources, even when they’ve already found some great suppliers through SaleHoo. We actively encourage people to look around for themselves, but we also try to teach them how to go about it the right way,” Simon says.
He suggests starting with a DomainWhois search to check up on the background of the website. A simple URL search will bring back important information such as when the domain name was registered, who it was registered by and where it was registered. Slade believes that if the domain name of the wholesaler you wish to buy from has been registered for less than a year, the supplier is best avoided. “Scammers are constantly opening up new sites for a few months, grabbing buyers' money and either sending fakes or nothing at all. When things start to catch up on them, they close down the site and start up another under a different domain name. So if a site has been around for less than a year, we would advise staying well away.”
Other safety measures encouraged by SaleHoo include checking whether the registered address and the country of registration match up. “It’s a sure sign something’s not right if the registrant is in the USA but the technical contact address is in China.”
Slade says SaleHoo has a policy of only admitting suppliers that accept PayPal or credit card, as these are both secure payment methods. “Paying by PayPal or credit card means that if the worst happens, you can do a chargeback and recoup your money,” he says. And he admits that keeping your wits about you and using common sense is also important. “There is no such thing as something for nothing,” says Slade. “If a website looks a bit funny – quite often they’ll ‘borrow’ graphics and text from other legit sites – and if prices seem amazingly cheap, then it’s very likely to be a fraud. You’re going to get ripped off.”
SaleHoo provides further information on spotting the ‘crooks’ within their free resource area.