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My Powerseller Guide To Making Money From eBay Wholesale Products

Published 4/5/08 (Modified 3/9/11)
By MoneyBlueBook

Anyone can make money online with eBay by selling products, but you have to be prepared to put in a lot of time and effort doing manual labor, packaging, and shipping goods. If you are willing to put your back into it, you can easily make quite a bit by buying the most popular consumer products from wholesellers and selling them on eBay. So many people claim to offer wholesale lists on eBay, but don't even bother with them. Their sources are useless and the majority will try to swindle you. It's a dangerous world out there so first, a few general rules of caution to abide by that will save you plenty of time, money, and headache. Unfortunately, many people disregard these rules every day, and lose thousands of dollars to scammers.

1) Never Buy Products From Anyone Who Wants To Be Paid By Western Union.

If someone asks for payment by Western Union, do not respond to them and avoid them immediately. Their low priced merchandise might be tempting, but it will almost always be a scam. Remember, it is your own responsibility to verify the reputation and legitimacy of the seller. Western Union is not responsible for the non-receipt or quality of any goods or services.

Common Western Union scams include, but are not limited to the following:

  1. Seller asks you to pay by Western Union and tells you that the transaction will be safe because you can make the payment out to someone you know, but put the seller's address on the payment. You are then instructed to tell the seller the money transfer control number (MTCN) of the payment so he can go to Western Union and verify that you have made the payment. Once you receive the shipment, you are then supposed to contact Western Union and change the payment recipient's name to the seller's real name so that the seller can pick up the money. It's a scam everytime because once the seller knows the address or the control number, he can obtain the payment with no problem. Many Western Union agents in foreign countries never ask for proper identification.
  2. Seller asks you to pay by Western Union and tells you to make the payment using Western Union's secret question�� feature. The way this feature works is the Western Union agent will ask a secret question to whoever is picking up the money, and the person picking up the payment must answer correctly in order to collect the money. It's a scam everytime because many times Western Union agents, particularly those outside of the United States, do not ask the question, and only care if the person knows the address or control number. Western Union even advises on their website not to rely on the secret question feature.

2) Never Use An Escrow Service Other Than Escrow.com

Escrow is verified and recommended by eBay. Note that Escrow.com will handle transactions in any country in the world, except Romania and Indonesia. Fraud is so rampant in those countries that Escrow.com cannot effectively and safely help you transact with sellers in those countries. What Escrow.com does is ask both the buyer and seller to agree on terms. The buyer must then send the required funds to Escrow.com. Once Escrow.com receives the funds, they notify the seller to ship the goods. Once the buyer receives the goods and confirms that everything is in order, the buyer notifies Escrow.com to release the funds to the seller.

Escrow.com is safe for both buyer and seller because the buyer does not have to release the funds to the seller until they receive shipment and verify everything is correct. It is safe for the seller as well, because even if a buyer claimed non-receipt of the shipment, the seller could provide Escrow.com with the tracking number for the shipment and a shipping manifest showing what was sent and received. In which case, Escrow.com would then release the funds to the seller.

Common Escrow Scams Include, But Are Not Limited To The Following:

  1. Seller tells the buyer that they prefer an escrow company other than Escrow.com. The seller gives the buyer the website address of the escrow company they prefer, and indicates that this is the only escrow company they trust. The buyer goes to the website and discovers a cleverly designed site that looks legitimate, with promises of safety and security. It's a scam because the website is actually owned and operated by the seller or the seller's associate. Once the buyer sends their money to the so-called escrow company, they will have actually sent their money straight into the hands of the scammer.
  2. Seller tells the buyer that they will do the deal securely through SquareTrade.com. It's a scam because SquareTrade does not act as an escrow service. They do not approve deals or hold funds for anyone. All SquareTrade does is allow eBay sellers to place a SquareTrade seal on their auctions, which shows that the eBay seller is willing to allow SquareTrade to help resolve any future disputes. Anyone who claims that they will use SquareTrade like an escrow service is a fraud. The seller may even send the buyer a spoofed e-mail, one that looks like it came directly from SquareTrade. However, it will be a fake.
  3. Seller tells the buyer they will use a shipping service called TNT, and that the buyer should send their payment to TNT, in which case TNT will hold payment until they can inspect and ship the seller's merchandise to the buyer. It's a scam because TNT is a shipping company and not an escrow service. They do not hold funds or inspect shipments on anyone's behalf. The seller may even send the buyer a spoofed-mail, one that looks as if it came directly from TNT, complete with logo and tracking number for the shipment. However, the e-mail will be a fake.

3) Always Request That You Pay A Seller By One Of The Following Methods

  1. Credit Card - Safe because most credit card companies will refund your money if you file a proper fraud complaint.
  2. Escrow.com - Safe because it protects both buyer and seller, as mentioned in Rule # 2.
  3. PayPal - Usually safe for purchases under $2,000, because PayPal will let you use a credit card and will verify the seller's address, banking information, and identity (do not send money to someone through PayPal if they are listed as "unverified").
  4. Letter of Credit (LC) - Basically, this is like using your bank as an escrow service. For example, you can go to your bank and apply for a letter of credit for the dollar amount you need to pay the seller. Your bank will freeze the funds in your account, and issue a letter to you and the seller's bank verifying that they are holding the money and that they will transfer the funds to the seller's bank account as soon as delivery of the goods to you is confirmed.

Do Use Bank Wire Transfers Until Identity Has Been Verified and Confirmed

Be very careful with any seller that requests payment in advance by T/T (telegraphic transfer), also known as bank wire transfer. This is a tricky gray area because some legitimate international sellers do require money by T/T in advance. Sometimes it is for a deposit, and sometimes they want the full transaction amount. Before sending money by T/T, make sure you ask for the following:

  1. Seller's full name,
  2. Seller's address,
  3. Seller's telephone number,
  4. Seller's company name,
  5. Seller's business license number,
  6. Seller's bank's name and telephone number,
  7. A scanned or faxed copy of the seller's identification card or driver's license,
  8. References from companies the seller has worked with before, preferably in your country.

Tell the seller you need this information to run a thorough background check. You can then use a service such as Intellius.com to run a background check on them. You can also hire an international buying agent in the seller's country to go to the seller's physical location and buy the items for you in person, and then ship them to you. Most buying agents will charge a reasonable fee to securely buy for you.

Remember, if the seller is legitimate, he will understand your need for verification and will comply. If the seller hesitates, resists, says he cannot delay anymore, or demands that you send payment as soon as possible, you should become very suspicious and perhaps reconsider the transaction. The seller is very likely a fraud. Do not let greed or haste overcome your common senses.

4) To Assure Sellers That You Are An Honest And Legitimate Buyer, You Should Become Verified

  1. Obtain a DnB (Dun & Bradstreet) number. This can be accomplished by applying for a credit builder account at dnb.com. Dun & Bradstreet will verify your company information including company name, address, owners, and ongoing debts (credit cards) or lines of credit.
  2. Get PayPal Verified - Open a PayPal account. Once you have one, apply to become a verified premier member. PayPal will verify your address and identification by depositing two small amounts of money into your bank account or credit card. Afterwards, you must verify the total amounts that were deposited to prove that you are the owner of the bank account or card.
  3. Get an Alibaba Trustpass Membership - See the list of wholesale sources below for more information.
  4. If you are in the United States, become a member of the Better Business Bureau Online.

5) Verify The Seller's Identity

If a seller tells you that he or his company has a website, run a WhoIs check on the website to see if the seller's name and address match the internet registrar's record for the site owner. Beware of anyone who doesn't have a name and address listed in the WhoIs section of their domain, or of anyone who just recently registered the domain.

6) Develop Your Own Private List Of Trusted Wholesale Suppliers

  1. Worldwide Brands - Worldwide Brands carries over 4,000 products and they also provide drop shipping services. That means they can ship products directly to your customers, and you do not need to keep any inventory or perform any shipping. They are an eBay Certified Solution Provider, and they are also a member of the Better Business Bureau.
  2. NAWCA - (North American Wholesale Co-Op Association) is another fantastic source for over 100,000 products via their 2,000 distributors, many of which can perform drop shipping for you. The NAWCA was founded by a collective of wholesalers and distributors in 2001. Highly recommended for eBay sellers.
  3. Ingram Micro - Ingram Micro is the second largest electronics distributor in the world. They offer very good pricing.
  4. Tech Data - This company operates a huge electronics distribution center in the United States.

Buyer and Seller Community Portals - There are excellent wholesale deals to be had here, but because these sites are part of the unregulated wild, wild west of international wholesellers, you have to be extra careful and vigilant in sorting the diamonds from the rough. There are definitely more scammers here than legitimate sellers. Be careful:

  1. Alibaba - Alibaba is a well trafficked source for wholesale buyers and sellers to connect on the internet. You should check this site frequently and sign up for trade alerts for whatever you are buying or selling. Your priority should be to deal with Alibaba companies that are Trustpass verified, although that in of itself is not always a sure guarantee of reliability. You can also become an Alibaba Trustpass member yourself. For a small fee, Alibaba will have a third party credit agency contact you to verify your name, address and company identity. Once you are an Alibaba Trustpass member, you will have more credibility, and sellers and buyers alike will take you more seriously. However, do note that scammers are everywhere. Please read my personal scammer experience for more insight.
  2. Exporters Singapore - Similar to Alibaba, but this site requires all members to pay a fee after a 30 day trial period. This method helps to keep scammers out.
  3. Power Source Online - Power Source Online is a computer parts trading exchange for dealers, brokers and services companies. You can find cheap computer parts and components for resale.

Note: The rest of the communities listed below are similar to Alibaba, with less traffic, but it is advised that you review and join as many as possible to maximize your opportunities.

  1. Global Sources
  2. EC 21
  3. Rusbiz
  4. EC Plaza
  5. Importers
  6. Trade India
  7. Offer 21
  8. Fuzing

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