How To Spot Middle-Men & Dropship Scams

By | 28th April 2008

What is a middle-man? A middle-man is a website which claims to be a dropshipper, however in reality they are not the actual dropshipper, they take your order and pass it on to the real dropshipper adding their own profit margins in the process. This may not be illegal but it is bad for the dropship industry because of the squeezed profit margins and problems that occur.

What is a Scam? This is when a website just takes your money and runs. This is illegal and it is important you avoid falling for a scam.

Here are the telling signs of a middle-man or scam website:

  • Contact details – these are very rarely listed on middle-men and scam websites. Real dropship businesses will normally list their email, phone number & physical address (needed for returns!). If a website only has an email address listed then email them asking for a phone number and physical address, if they don’t reply or give you the details then avoid them. Some middle-men may list a phone number, however it may just be an unanswered line. So if you are unsure about the website give the number a call, if they answer then enquire about a product. If you ring 5 times and they don’t answer then you know the score! Checking out contact details is probably the best single way to find out about a website/company.
  • Payments – scams often have high value products listed with payment via a payment processor like e-gold. If a website only offers a processor like e-gold as an option then avoid them.
  • Substantial set-up fees – Many legitimate dropshippers charge a fee to join (for various reasons) so don’t assume all dropshippers charging a fee are a scam, because they aren’t. However the ones that charge a ridiculous amount, EG £100, are to be avoided. Once you have paid and are in the members area you will likely see a crappy product range with prices that leave no profit margins for you.
  • Product pricing – scammers often list high-value products which have big demand (ipods etc) at prices which are way below the retail price. Suprise suprise the product never turns up and your emails aren’t being answered. On the other hand be wary of companies who don’t list prices at all on the front-end of the website and expect you to pay to join them. Give them a call and ask them if they would kindly email you a price list of products for members. If the answer is NO then stear clear of them.
  • How professional is the website/communication – look out for spelling errors, bad design, poor quality images and poor grammar. A professional business will make sure all of these are not present on their website. When you call/email the company how quickly do they respond, is the response concise and professional, did they even answer your question?

Conclusion

The points listed in this article WILL NOT make you bullet proof, you could still fall into a scam or end up selling products via a middle-man which could cost you financially and lead to you having to pick up the pieces of unhappy customers. If you have applied the points in this article to a website you are thinking of using and are still unsure about them then ask for further opinions on forums.

If we all avoid these middle-men and scams then eventually they will disappear, even if it takes years! If we cut out all the middle-men then the dropship industry would be more trusting and honest which would encourage more sales and dropshippers to expand benefiting all of us!

If you have other ways of spotting a scam or middle-man please make a comment below or drop me an e-mail.

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