The Wholesale Forums

[morepower]

The scam has been around since man realized that there were greedy, not informed, not schooled, other human beings that were looking for something for nothing. We hear about email scams, lottery scams, and business scams. What is the single most thing that entices people to respond to these scams? MONEY - In the form of something for nothing or almost nothing.

Rule of thumb - If its to good to be true, IT IS.

Every product made has a minimum cost to produce. If you don't have a clue about a product or service you want to buy how can you make an informed decision?

EXAMPLE: Apple has been successful for many years. They come out with the iPod it costs X amount of dollars to produce. However to make money they must mass produce the item. They mark up the item a certain % for sale on their own sites which becomes the MSRP. However, in order to market them around the world they sell them to authorized distributors for a smaller % discount on the MSRP mark-up and to retailers for a less % who in turn sells them to you. I personally have worked with apple products for years long before the ipod or itunes. The only ipod with any mark up of more then a few $$$ is the iPod touch and the classic. Even then the markup is not allot. The shuffle has no more then a $3-$4 markup. Retailers sell these because its not the iPods themselves they make a ton on its the accessories and it brings in business.
If you follow this progression of formula's you would find that a retailer would be making about 7USD on the ipod nano and about $15-$20 on the Classic and Touch for each one sold. Here again they are not making vast amounts of money from selling 1 or 2 but because they are selling hundreds.

This process is followed by all companies with Brand names that have no self distribution. Therefore if you see Name Brand items advertised for more than 15-30% off MSRP price you need to be highly suspect of the seller and exhaust all avenues in completing "Due Diligence". If you are not sure then check out before you just accept what someone says.

You can not buy brand name electronics cheaper from China! There is a set price on every item that no one is allowed to sell under that price.
STOPPING THEM

1.) Eliminate the greed in yourself.
2.) Be informed, know the product.
3.) Think before you jump. If you have a seller who is saying come to our warehouse we have the product vs someone saying i heard there was product in this country or in this state go pick it up. Use your mind and common sense here who has product? the person saying they HEARD it was in some place or the person saying come to our place.
4.) Exhaust the available resources for confirming trade partners. Talk with Authorized dealers, distributors. do your own research
5.) Never do first time deals via the internet alone. Any legit company or broker should have no reason to let you meet in person, even if they do not have a warehouse as many brokers do not they should have no reason to deny meeting in person and confirming they have done transactions with the company they are buying from now in the past.
6.) Get a pre-shippment inspection done by a reputable service unless the company is offering you to come to a OWNED warehouse not a FF warehouse and has sent you POS before hand and the deal is no payment of any sort until inspection.

Rule of thumb if there are no Picts of stock or if the seller says you have to put a deposit down before seeing the POS or says they want to know you are really serious before sending it out or any other excuse as to why they can not provide POS then it does not exist.
7.) Don't pay until you recieve the inspection. If they want 30% in advance tell them you need a factory audit first. If they refuse then the stock does not exist.

Inspections are honored by real suppliers and manufacturer's it also sends them a signal that you are a serious buyer. Lastly understand that you can not buy a branded product from anyone other than the manufacturer or factory authorized distributors and VAR's. Sure brokers sell mobile phones but remember that the only place they can get them is from a Authorized distributor or VAR.
Some brokers you want to stay away from others are great. for instance I know a couple brokers who work direct with a Nokia distributor and they have worked out a deal with them for good pricing because they are bringing all their customers and customers customers to the distributor or VAR and therefor get better pricing then someone alone might get because the pricing they are getting is based upon all the customers coming as one giant customer. And even then they do not get some wild cheap pricing.

Be very cautious of anyone asking for money up front without allowing you to see proof of stock. Also i cant say on other companies but i do know with Nokia and Apple if you want production runs on phones or computers full payment is required upfront and they do not accept bank LC or escrow for payment. So this should tell you anyone saying they can do production run phones and saying they accept bank LC or escrow then i would question it.

Again only the authorized distributor of a brand name product can do what are called production runs.

1 Last thing i would say is be sure that you do not just take anyones word. Just the other day i had a customer who was trying to sell to me and the only basis for claim he has was that the supplier was going to accept Bank LC. But would not show me any proof of anything else. I have had this happen before people say well its fly and buy or its escrow or it is bank lc so it must be safe and legit. If there is no proof it is not there.

I hope that this helps weed out some of the scammers and save some of you from getting hurt by these scammers. If we keep the scammers at bay they will eveintally die out one by one.

Thank you for reading this post i hope it was imformative and that it helps someone.

[Anthony]

morepower - Do you own the copyright to this article?

[morepower]

What do you mean? this article is not copyrighted and i wrote some of it along with my partner.

[Anthony]

Originally Posted by morepower

What do you mean? this article is not copyrighted and i wrote some of it along with my partner.

I ask because it is published elsewhere on the Internet (Alibaba.com to be exact). If it isn't yours and you didn't create it, without appropriate referencing or permission from the content creator you are in breach of copyright laws.

I have nothing against you publishing content here, I'm all for it, I just don't want to be receiving complaints from content owners stating content has been copied from another venue without their permission.

It would be appreciated if you could clarify this issue.

Thank you.

[morepower]

You will not receive any complaints. Part of this article was rewritten and i will make sure you are shown it is ok. I dont want anyone worried about this.

Thanks