Dropship Wholesale Scams–Et Tu Salehoo?

How to spot a dropship scam . . .

can easily be learned, but I wouldn’t spend too much time worrying whether this company or that company is a dropship scam.

I will try to give you some pointers, though I think if you apply common sense, you’ll more often then not come out safe and sound and won’t fall prey to wholesale product sourcing scams. Before we get too deeply into this, I want say at the start the dealing with Chinese wholesalers and manufacturers requires some skill. When dealing with the Chinese, use caution and good business sense. This will be one of the trickiest skill you tackle, but that is something we can get into later.

Right now, for the basic question about how to identify real wholesalers from posers, it is important to understand that a wholesale business is a particular kind of business that requires its own special business license. For you, that means that in order to do business with a true wholesale suplier, you must have a sales tax permit or a resale certificate (name changes depending on what state you live in). So, if a company represents themselves as a wholesale company but doesn’t require a sales tax permit, they are not a wholesale company. Does that mean they are a scam? If the company outright says that it’s a wholesaler but doesn’t require the sales tax permit, then yes, it is being dishones (this applies to the United States).

Many of the popular dropship companies talk about wholesale prices and below wholesale prices and strongly suggest that they are a wholesale company, but they never come right out and say that they are a wholesaler. That may be a little sleazy, but they can skate on the scam charge. Important questions then becomes, are their prices good and do they live up to the promises in their sales page?

Companies such as dropshipdesign.com, megagoods.com, doba.com, dropshipwholesalers.com are not wholesale companies. They may offer very good prices–that will be up to you to determine–but they are not wholesale businesses. Why? No need for the sales tax permit. Can you make a profit with them? Tough question. That will depend on you and your product research.

Here is a tip, though: dropshipping using the big dropship warehouse companies such as dropshipdesign.com rarely works on eBay because the profit margin is too small. There are some solutions to eBay product sourcing, however. But that is for another blog post.

It is important to understand that real wholesale companies very often keep a low profile on the Internet. They are not Internet marketers and generally could care less about search engine visibility. They offer dropshipping as a service not as a selling point. And that’s where online wholesale directories come in to the picture.

Wholesale directory scams . . . . Now that is something on just about everyone’s mind. I’m pretty cautious. If you have or are considering selling physical products online, then you’ve probably wondered whether or not you should join a wholeslae directory membership or buy a list. Well, maybe, but again, that depends on your needs. Even World Wide Brands, which runs around $300 without discounts, is not expensive in terms of business cost and research. I mean, how important is your business? If you are not willing to spend money on research and development, then you might want to rethink your plans. I know that some of you truly can’t spend the $300, but that is a different matter.

The directory that we like and are members of ourselves is the Salehoo directory. I know, a lot of you are wondering whether or not Salehoo is a scam. That’s something you’ll have to decide for yourself. I can tell you that we have nothing to complain about. At its most fundamental level, Salehoo provides a directory of product distributors and a forum. Salehoo is not product supplier. That is imiportant to undertand in the Salehoo scam question. Salehoo is not a product distributor or supplier. Salehoo provides the contacts and also takes pains to make sure that the businesses it lists are legitimate businesses, but beyond that, it is up to you to make contact and do business. Salehoo is not a way to make money. It is not a get-rich-quick system. It, in itself is not any kind of money making system. That misunderstanding, I think, causes some to feel that Salehoo is a scam. But, as I said above, it is up to you to make the decision.

For more information about Salehoo, product sourcing, and eBay product sourcing tips and “secrets“, well, you know what to do . . .