Avoiding the evil middleman – how to avoid online scammers!
By Robin Cowie
President

Hello!

My name is Robin Cowie. I’m the President of eBay Certified Solution Provider WorldwideBrands.com. We are a fully-staffed Product Sourcing Research company that has dedicated the past seven years to finding and qualifying genuine wholesale suppliers who are willing to work with home-based Internet Business Owners. I’m also the Contributing Editor for Product Sourcing for The eBay Radio Show, and Host of The Entrepreneur Magazine Ebiz Radio Show.

Today I’m going to show you some things you absolutely must know in order to protect yourself from being scammed online when looking for products to sell.

Please ask any questions you like!

To visit our site
CLICK HERE

The Product Sourcing Supply Chain:

The Product Supply Chain is how a product gets from the manufacturer to the end consumer, your Customer. When it’s working the way it should, it goes like this:

1. Manufacturer  Wholesaler  Retailer  Consumer

Many people have the mistaken impression that the second link in the Chain, the wholesaler, is a Middleman, because they are in the middle, between the manufacturer, and you, the retailer.

That’s not true. The Wholesaler, the second link in the Product Supply Chain is there for a very important reason; manufacturers don’t have the infrastructure to actually sell and deliver small numbers of their products directly to you, the retailer. Real wholesalers provide that infrastructure (warehouses, order systems, delivery trucks, account representatives, etc.) for the manufacturer.

So, link two, the wholesaler, is a legitimate wholesale supplier, not a Middleman.

Here’s an example of where an illegitimate Middleman fits into that Supply Chain:

Manufacturer  Wholesaler  Middleman  Retailer  Consumer

A Middleman is someone who takes your place in the Product Supply Chain, and bumps you down a link. They try to make you believe they are Link Two in the Chain (a wholesaler), when they are really Link Three (a retailer). Sometimes, it’s worse than that. You could end up dealing with a fake supplier who is actually three or four links down the Chain.

How does that effect you? It hits you where it hurts. Right in the profit margin. For every link you, the retailer, drop down in that Chain, your “wholesale” prices go up, and you earn smaller profits.

You need to be buying your products from a REAL wholesale supplier that works directly with the product manufacturer. Otherwise, you profit margin will suffer.

What you can do to avoid the middleman:

If you come across a wholesaler that you’re not sure about, there are some things you can do to help you decide if they are legitimate:

• Call them. If someone answers and just says “Hello?”, you are not talking to a real business. You SHOULD be able to get ahold of an Operator who can direct you to an Account Representative. Ask the Account Rep all the questions you like, until you’re satisfied.
• Go to www.Whois.net and do a search on the company’s web site domain name. If the results tell you that the site is registered to an individual name, chances are you’re dealing with a Middleman. If it’s registered to a company name, that’s not proof, but it’s a good sign that they might be legitimate.
• Search the Internet using the web site name, and then the company name. If anyone has had trouble with them, you’ll find out quickly.
• Search the Better Business Bureau web site, at www.BBB.org, for complaint history.
• Contact the Chamber of Commerce in the city or town where the business claims to be located, and ask about them. Even if they are not a Chamber Member, someone there should be able to give you some idea about them.

Making sure you’re dealing with a real wholesaler can make or break your eBay Business, so please be sure that you know who you’re dealing with.

Our website has a scam watch page that we update frequently so help people be aware of the scams that are out there.

To visit our Scam Watch Page,

CLICK HERE

Online traps

Most people who sell products online automatically jump into the Search Engines when they’re looking for wholesalers of products to sell. Believe it or not, the Search Engines are just about the last place you want to look.

The vast majority of real wholesale suppliers do not need or even want to advertise themselves on the Internet. The wholesale supply industry generally sells very large numbers of products at a time, to the big retail chain stores.

Real wholesale supply companies realize that advertising in the Search Engines will attract thousands of very small retailers. That means a large influx of very small accounts; accounts who will only buy a few hundred or a couple of thousand dollars worth of product at a time, not hundreds of thousands of dollars at a time.

The wholesale business operates on a fairly thin profit margin themselves. For them bigger accounts who can buy lots of products at once are better, and small accounts can be more time-consuming than they might be worth.

This doesn’t mean that there’s anything wrong with small Home-based Internet businesses! Again, this is simply the way most of the big wholesalers view their world, and you have to understand that in order to make progress with them.

There are many real Wholesale Suppliers who will work with small retailers. It’s just not usually in their best interest to help you find them! The big brand name wholesalers of the world just don’t go around spending time and money advertising themselves to an Internet audience that they feel won’t be a significant part of their overall business.

That's why as an online retailer, you have to go to them. Wholesalers don't go out of their way to make it easy for the Home-based business owner to find them. However, they CAN be persuaded to work with you if you can just find them and ask.

On the other hand, FAKE Wholesalers DO advertise all over the Search Engines! The Search Engine keywords “Wholesale”, “Wholesale Products”, “Drop Shipping”, and so on, attract a huge number of people who own or are starting a Home-based Internet Business. That’s because people who are relatively new to ECommerce are not yet aware of these wholesale middlemen. Most people simply do not know that the Search Engines are the wrong place to look for real wholesalers.

While 98% of the real wholesalers in the world do not advertise there, for reasons we’ve just discussed, those Search Engine keywords are the Sweet Spot for the Middlemen, the “Get Rich Quick” con artists, and the sellers of junk information. You MAY SOMETIMES find a genuine wholesaler in the Search Engines, but that’s very rare. For the most part, you need to stay away from the top results in the Search Engines if you’re researching real wholesalers.

Broker Networks

In order to earn the most possible profits on the products you sell online, you must work directly with genuine wholesalers. Anyone who gets in between you and a real, factory-authorized Wholesaler is simply turning your order around to someone else, and taking a profit from it.
Broker Networks that you'll see advertising as Drop Shippers and Bulk Wholesalers are not illegal, and are not scams, but in our educated opinion they are not what they want you to think they are.
Broker Networks can best be described as something similar to the Multi-level Marketing business model. In order to use this "Network", and take advantage of the "millions of products" they claim you can have drop shipped, you must first BUY thousands of dollars worth of products yourself (many times from large retail stores). Then you BECOME a "Broker" yourself, trying to sell those products to other "Brokers" within the "Network". You and those other "Brokers" in the "Network" (people just like you) actually become the "wholesale suppliers" these sites want you to think you're signing up with.
Many times operations like these will not even complete your "application" unless you can prove that you have several thousand dollars to use in order to start buying products, so you can become a "Broker". Be VERY careful with your credit card information, and ask a LOT of questions!
Not what you expected from the advertising on their front page, is it! If you're okay with that kind of business model, fine. Again, it's not illegal, or a scam. Just remember that this is NOT direct wholesale supply in any traditional fashion whatsoever.
There are some Broker Networks that claim to be wholesale suppliers of tens of millions of products. To the best of our knowledge, there is no single wholesale supplier anywhere on the planet that is anywhere near that large.
There are some Broker Networks that claim to be wholesalers of a huge variety of Brand Name products. They are simply passing your orders on to the real sellers (other "Brokers" just like you, and even retailers, in some cases!) of those Brand Names, and taking part of your profits.
If you want the best possible profit margins, the transactions you make when you buy products to sell online should be between you and a Factory Authorized Wholesale Supplier ONLY.

Lists of Drop Shippers and Bulk Wholesalers for $3

Ever see an ad like that on an auction site? So have we. We buy them. OK, we KNOW we're getting ripped off, but we just have to see them. A few days after paying for them, we get two Xeroxed pages in the mail containing the most worthless information we've ever seen. Or, we get an Email that's supposed to be a Product Sourcing list. (An EMAIL!) Or we get a $15 CD chock full of the same garbage the guy who charged us $3 was peddling. If I thought I could make money on the Internet selling wooden birdhouses made in somebody's garage, I'd go into business with my neighbor.
These lists sell for anywhere from $2.50 to about $59. Why do you think they're so cheap? Because nobody had to put any EFFORT into them! It's easy to hit a search engine, type the word "wholesale", throw the first 20 responses on a piece of paper, and sell it for a few bucks.
Will it help you earn money? NO!

Free Wholesale Lists:

This is an easy one. Once again...you get what you pay for. No exceptions.
We've checked out these sites. Over and over again, we see them listing companies that we've turned down for inclusion in our own Directories. Middlemen, companies that charge large "membership" fees and then give you over-inflated price lists in return, companies that require minimum orders in the THOUSANDS of dollars. The producers of these sites are simply hoping to get people to click on them so that they can claim high numbers of visitors, and sell advertising space. We've never seen anything useful on one of these irresponsible excuses for an informational site, no matter how sincere they claim to be, or how many false "testimonials" they list.