Tips on avoiding drop shipping scams

[Andrewdennis]

I just lost my warehousing space due to bad finances, and am looking at going the drop ship route. Any tips on avoiding drop ship scams? I know there’s a lot of legit suppliers out there, but I need to know how to tell the wheat from the chaff. If forumers could post, like, their favorite tip that’d be awesome!

[cheeseyApples]

One thing you want to keep in mind is that you don’t need to only worry about outright scams, but also just plain bad suppliers. Both will cost you money equally easy, and will also completely destroy your reputation with customers. That said, pretty much any of the tactics you get on here will apply equally to dealing with either brand of bad apple.

As far as my favorite tip goes, I would say do your research, and don’t ever rely exclusively on the Internet. Any scammer you REALLY want to look out for is going to know how to game Google results. Besides, suppliers on the open market are going to be overused, and so likely less efficient. Best source for a supplier is going to be in a supplier database.

If you already have a supplier listing you trust, use it. The moderator of any database worth using is going to verify anyone they list, and so you can trust suppliers from those listings. I’d still recommend checking out the individual suppliers, but this way, you should at least have a scam-free starting place. YMMV (Your mileage may vary)

Bottom-line; seriously consider teaming up with a company or site that provides access to lists of verified suppliers. These typically charge an access fee, they are providing a service, after all, but it shouldn’t be all that bad. Like $20 per month/$150 per year or so typically.

[Kittenn00b]

Number one tip? DIVERSIFY! Even legit suppliers (of any variety) will put out the pretty flashing lights to get your attention. Don’t settle with just one supplier just because he gives you a good opening deal. Like Cheeseyapples pointed out, you’ll protect yourself from both scammers and crappy suppliers alike.

It’s an “eggs in one basket” mentality, just like with bank accounts and investments. Diversity will give you the perspective you need to spot scams and poor service. Likewise, should that shiny new supplier happen to burn out before you expected, you won’t be stuck holding an empty box for your customers, and it’ll definitely protect you from the terror of out-of-stock goods.

[Windowslite]

I’m a big fan of the Better Business Bureau and just third party verification in general. Check out any potential complaints against the supplier.

[borisnoone]

In the same light as what Windowslite said, do your primary research. Don’t rely on customer testimonials, but rather request references from the supplier in question. Ask these existing customers about their objective experience. Seek out other objective reviews on the company. You want to keep an eye out for reports of inefficiency as much as signs of scamming.