How to Avoid Becoming a Casualty of Dropship Scams
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Posted On :
Aug-13-2010
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Article Word Count :
554
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Like most other business models, dropshipping is fraught with scammers. Here’s how to look out for the regular cons if you’re still a little green, and ensure you stay away from them.
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New dropshippers have a common fear: being ripped off by a company that will simply take their money and run. The scam artists out there will collect your money without delivering what they promise, believe it or not. If you know how to spot these before you deal with them, however, you can stay away from the scammers and go on to build working relationships with genuine, lucrative, suppliers.
Keep away from the phony or second-rate dropship suppliers
There are companies out there that describe themselves as wholesale dropshippers but are actually what is called a “broker network.” Broker networks often require you to pay an application fee just to find out what they are about. You’ll then find yourself in a commission sales situation – they require a W-9 to participate, something no genuine drop shipper would ask for.
You should also avoid purchasing the supplier lists people sell for just a few dollars. Even if the dropship suppliers listed are authentic, they are not likely to be any good. Research the dropship suppliers you find on the Internet or through drop ship directories properly before you pay for anything. Scammers can be pretty believable, with impressive websites that look the part.
Avoid paying excessive fees to use a company's dropship inventory
Stay away from companies that require a monthly fee to be your dropshipper. They know your online store won’t be able to sell their overpriced, worthless junk, so they need to make money from you from a monthly fee. You should also stay away from companies offering you a turnkey business opportunity, complete with website and a merchant account that allows you to accept credit cards.
These are middlemen who want you to spend money advertising products they get from wholesalers, which they will in turn mark up and sell to you. Do you own research first and get a real drop ship supplier. Start your drop ship business analysis with some free business analysis tools online.
Overpriced shipping costs
Many suppliers are charging disproportionate shipping costs, which make them more money and you less profit. If you’d like to know how much shipping should really be, check out the websites of the USPS, FedEx, etc. They will give you the exact shipping rates and transit times – just enter the zip codes and the weight of the package.
Fake Branded Items
Some suppliers offer designer label items, which in fact, are fakes. You can never really tell if these items are counterfeit unless a customer complains. Reselling branded merchandise can be extremely uncertain. Before making final decisions, conduct further investigation on designer labels and branded merchandise before offering them for sale on your website.
Unbelievable Price Cuts
Watch out for dropshippers who offer unbelievable discounts on popular products. Many of these discounts are based on the Recommended Retail Price (RRP), and the supplier may even be exaggerating this price to make their discounts look even better. The customer would probably choose to buy from an established retailer if the product costs the same as your price, so it’s unlikely you will be able to sell the product for the RRP. For this reason, it’s important that you base your discount calculations on what you know you can charge.
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Article Source :
http://www.articleseen.com/Article_How to Avoid Becoming a Casualty of Dropship Scams_29187.aspx
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Author Resource :
Visit www.BigDropShip.com to learn more about Dropship Business Analysis.
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Keywords :
dropship, dropshipping, dropshippers,
Category :
Business
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Business
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