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Home  l  Ethics

Wholesale Fraud

Submitted by Rusbiz Librarian  l April 21 2006  l  Viewings: 6712

By Michael Russell

There is an old saying that goes like this. "You get what you pay for." In the wholesale business this is way too true. We're going to take a look at some of the wholesale scams that go on constantly and how to avoid them. It's not as easy as it sounds.

Let's face it. We all want to pay as little for something as possible. It costs so much to live as it is and the last thing we want is to overpay for something. So it is very tempting to try to get things wholesale to save a few dollars. The problem is this. When you're dealing with wholesale items you're paying a much lower price than you would for the same item retail, but how much less should you pay? This becomes a problem on two levels.

The less serious level is actually paying too much for the item. In many cases what the wholesaler will do is display a retail price for the item that is actually inflated by as much as 100% over the actual retail price. For example, a Sony DVD that normally goes for $150 they may have listed for $300. Then they give you a wholesale price of say, $175. It sounds like a good deal but in actuality you're paying $25 over retail and you're not even aware of it. Scams like these go on all the time, not only with wholesalers but with retailers passing things off as being on sale. They jack up the price and then lower it to make it look like you're getting a bargain.

The more serious level of wholesale fraud is when you're confronted with a price that just seems too good to be true. In many cases, it is. Let's take that same Sony DVD that goes for $150 retail. A good wholesale price for it may be something around $75 to $100. But then you'll see somebody is offering the item for a ridiculously low price of $39. You know in your heart that there is no way they can offer a $150 DVD for $39. Something has to be up with this unit but the deal is too good to pass up and you go for it. One month later the DVD completely stops working.

So what happened? Something else that is just way too common. The make and model of the DVD is misrepresented. Maybe it's a Sony. But the model is not the $150 model that is of better quality. The model is one of their cheaper models that normally goes for $50. You get it for $39 which isn't even much of a bargain at retail let alone at wholesale. This is one of the worst abuses of wholesale fraud that you will find and it goes on all the time.

So what does somebody do? How can you tell if something is too good to be true or should be cheaper than what you're paying? Simple. You have to be educated. Whatever it is you're thinking of buying, go directly to the company manufacturer for details on the item. Find out the retail price. If the Sony DVD that they say they are selling to you is $150 and you find the model is actually one of the cheaper brands then stay away. If they've jacked up the price then confront them. Tell them you know this is a $50 unit and you'll give them $25 for it and no more. In other words, don't let yourself become a victim.

It may seem like a lot of work to have to do all this research for each item, but if you want to keep yourself from getting ripped off that is exactly what you're going to have to do.

Article source: http://library.rusbiz.com

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