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    1. WholesaleForum's Avatar
      WholesaleForum is offline

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      #1

      How To Spot Scammers - A List of the Best Supplier Verification Methods

      The aim of this thread is to create a summary of the best methods to verify suppliers and spot scammers. Please feel free to reply to this thread and include any new method that is not yet listed in the shortlist below.


      1. Search in Google

      Search in Google for any of the following (replace CompanyName with the actual name of the company you are trying to verify):

      "CompanyName scam"
      "CompanyName ripoff"
      "CompanyName rip off"
      "CompanyName refund"
      "CompanyName review"
      "CompanyName fraud"

      Usually, there should not be any results with a negative feedback. If however you see at least one, it means you should investigate the supplier further (bear in mind that the complaint could have been submitted by one of the company's competitors performing a negative PR campaign against the supplier or service you are trying to verify).


      2. Verify the supplier address

      Verify the supplier address by using Google Maps or Google Earth:

      - Is the address valid?

      - When you view the address in satellite view, does the satellite image resemble a place where business can be conducted, or does it look residential (if it's residential you may be dealing with a middle man)?


      3. Contact the supplier by phone

      Contact the supplier by phone to evaluate their knowledge of the product:

      - Is the person on the other end of the line corteous and professional? Or does the supplier seem too keen to please you? Is he/she answering yes to all your requests without any objections?

      - Ask technical questions about the product(s) you want to buy from the supplier: is the supplier's knowledge of the product superficial?

      - Request that they send you their incorporation certificate or company number and tax number. Verify these details against their local business registry database and for how long their company has been registered for. If the information you receive doesn't match, or it's a newly formed company, you need to run further checks.


      4. Ask for references

      Ask the supplier to send you references from buyers in your country. Contact the references to ask about their experience with the supplier, and about any pros and cons of dealing with them.


      5. Verify the supplier company registration in their country's local company registration database

      Verify that the company you are about to trade with is registered in their country. Some countries have centralised databases of companies, others don't. For those that don't you will need to use reputable company directories to verify their existence.

      - For China based companies, you can use:
      http://www.yp.net.cn (China Yellow Pages)

      - For Hong Kong companies you can use:
      http://www.icris.cr.gov.hk/csci/

      - For US based companies:
      http://www.bbb.org/ (thanks detailedreams). The Better Business Bureau is an organisation that grants its certification to companies that maintain a high level of service. While there has recently been discussion that some of their policies may have been compromised in an attempt to increase revenues, it is still a great database to verify if any complaints have been filed about a company.

      - For UK based companies you can use:
      http://www.companieshouse.gov.uk/info

      More company databases by country will be added soon.

      to be continued ...


      If all the above verification methods fail or you are still uncertain about a supplier, post a thread in the appropriate Wholesale & Dropship Suppliers Discussion Forum asking for advice from other members.
      How a New Online Retailer Made Over 3 million Sales in 1yr With These Sources

    2. wholesaleinsight's Avatar
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      #2
      Check with the Better Business Bureau in their region. How long have they been in business? Do they have any complaints filled out against their company? If they do, have they been resolved?

      When you order from a dropshipping company, there shouldn't be a minimum order requirement. Itís standard to get discounts on larger portions, but the dropshipper should be able to supply any order ranging from 1 to 1000.
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    3. boygarage is offline

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      #3

      BBB, non profit? right?

      "The Better Business Bureau is an organisation that grants its certification to companies that maintain a high level of service. While there has recently been discussion that some of their policies may have been compromised in an attempt to increase revenues, it is still a great database to verify if any complaints have been filed about a company."

      I have been checking out BBB.com to check if a supplier is a scam, but I know that BBB.com is a not profit organization, and most of their reviews and complaint records are accurate. About the statement above, with some of their policies having been compromised in an attempt to increase revenues, that makes me confused.

      Is it BBB.com that has been compromised and involved in efforts to increase revenues? Or is it the businesses that are making use of some of the policies? Do you have a link for some write ups or news regarding this?

    4. Andre_we30 is offline

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      #4
      Great tips, very useful information. But, point no.4 is questionable; a scammer can rope in paid fake buyers who may give positive feedback about the scammer. This may not happen all time, but there is a possibility. How can we verify whether the reference is real of fake?

    5. WholesaleMod's Avatar
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      #5
      Hi Andre,

      You should verify each reference in the same way you verify a supplier. The advantage is that when you ask for references you are able to verify a supplier from different angles.

      Also each verification method on itself isn't as effective as using multiple verification methods conjunctively.

    6. TwoTeks is offline

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      #6
      Brilliant tips by thread starter.

      I'd add one more that is so common still to this day.

      If it's too good to be true.. Yeah, you know the rest.

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