7 Ways To Avoid Getting Scammed By Suppliers Online

Avoid Getting Scammed By Suppliers Online

Let’s face it - it’s a dangerous world out there! With plenty of scam artists trolling Alibaba and the like seeking to separate you from your hard earned importing dollars (or euros or…), how can you be sure that your supplier is for real? SourceJuice comes to the rescue with the top 7 ways to avoid getting scammed.

1. VISIT!
Don’t underestimate the value of seeing the factory and meeting the people yourself! If you’re about to embark on a large importing project, the time and money spent on coming to China for a short visit may pay off in spades. Round trip flights from the US can be had for just over $1,000, hotels and food are relatively cheap, and the factory will likely pick you up from the hotel, take you to visit the factory, and wine and dine you for free. For less than $2,500 and 1 week of your time, you can personally verify that everything is up to snuff.

2. Don’t Blindly Trust Website Certifications
Is it true that the chances of a factory with ‘TrustPass’ or similar is less likely to rip you off? Possibly. However don’t automatically assume that because a factory has website certifications that they are trustworthy. Many website certifications can be purchased and/or rely on a few brief visits or phone calls.

3. ‘Feel’ The Delivery Terms
Recognize the legitimate fees that go along with importing such as duties and shipping. If you find a supplier willing to lower the cost on the shipping documents to avoid fees or are willing to send the goods to you as a gift to avoid duty fees, what other types of shenanigans are they playing?

4. Avoid Purchasing ‘Too Good To Be True Items’
No there are not factories in China that can sell you lots of cheap authentic iPhones or iPods or Nokia phones or Nike shoes or… If you are trying to purchase designer items or brand name items, be careful as this is the area that most scammers operate.

5. Consider Using A Trading Company
If you can’t do your own due diligence because of lack of time or knowledge, hire a professional! Trading company fees typically range from from 3-5 % of the total order. If this is small potatoes for you compared to the potential of it all going wrong, let the man on the ground help you out.

6. Use A Letter Of Credit
Never send money Western Union or to a personal bank account. Watch out for Paypal, although sometimes it can be legitimate. Never pay in full up front unless someone on the ground has inspected the goods. Even the typical 30% up front for TT payment is risky when working with a new supplier. Using an LC is the safest way. The factory has the assurance of the bank and payment isn’t released until the goods arrive. True you still don’t have the ability to inspect the goods for quality issues before payment is released, but financially it’s the safest route.

7. Use Common Sense!
The old adage.. if it’s too good to be true, it probably is!

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February 13, 2008 | Filed Under Sourcing Guides 

Comments

One Response to “7 Ways To Avoid Getting Scammed By Suppliers Online”

  1. VICTOR on July 3rd, 2008 3:41 pm

    HI, I FOUND A SITE FROM CHINA AND I ASK IF THEY GIVE A CREDIT LETTER AND THEY SAID YES AND ASKED ME FOR MY NAME ADDRESS AND BANK ACCOUNT. THEY ARE GOLD MEMBER AND GAVE ME NUMBERS FAX FOTOS ALL BANK AND GOVERMENT NUMBERS ETC. I CALLED THE GUY PERSONALLY AND TALK TO HIM. BUT COULD THIS BE A SCAM. IF I GIVE MY PERSONAL BANK ACCOUNT WILL THEY GIVE ME A CREDIT LETTER? I DONT KNOW I STILL DIDNT GAVE ANY OF MY INFO THEY SEEM LEGIT BUT I DONT KNOW. IF YOU CAN HELP ME HERE LET ME KNOW? AND DO I HAVE TO BE A BUSINESS TO RECEIVED THIS CREDIT LETTER BECAUSE IM NOT A BUSINESS??
    THANKS!!

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