You sign a supplier agreement with a company assuming the goods they provide are authentic and legitimate—a commonly seen example is fashion accessories: Louis Vuitton, Prada, and Dolce and Gabbana. However, what you actually receive are replicated goods that you then ship to your customers. Once your customers receive their packages, they may identify the replica and contact their issuing bank for a chargeback.
A worst-case scenario—your customer may sue you for fraud. This scam preys on merchants who are often just starting out or who may just be naive.
The way it works is that you issue a PO with your supplier for a new shipment of goods. However, the company says that you must pay first before they will ship. You pay the invoice yet you never receive your shipment to refill your own stock. Just try to make sure that, at worst, you get a shipment confirmation before you pay an invoice. Now that you understand the different types of scams, it is important to learn how to spot them.
Below are red flag signs that will help you avoid falling victim to a supplier scam. Being able to easily communicate with your supplier is a key part of doing business. You want to be able to quickly reach them if an issue occurs so that your orders can proceed. For that very reason, suppliers who scam often have poor communication practices. They need to make it difficult for you to contact them so that they can scam you without consequence.
Here are a few communication red flags to look out for:. Even the most skilled scammers will show small signs of fraudulent activity when doing business with you. Stay aware of these common ways that scammers deviate from standard business practices:. Reply from WholesaleDeals. Dear Arthur, Thank you for your review, customers like you are a motivation to continue improving our service and serving you.
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