Red Flags for Wholesalers | Chris Malta's EBiz Insider Podcast

Chris Malta's EBiz Insider Podcast

When you're selling online, finding the right wholesale suppliers can feel like navigating a maze. There are countless options out there, but not all of them are what they claim to be. In fact, most so-called “wholesalers” that you find in Google or YouTube are anything but legitimate.

Be sure to Subscribe to the Show!

Find much more TRUTH about ECommerce on my site.

EPISODE TRANSCRIPT

When you're selling online, finding the right wholesale suppliers can feel like navigating a maze. There are countless options out there, but not all of them are what they claim to be. In fact, most so-called “wholesalers” that you find in Google or YouTube are anything but legitimate.

Falling for a fake supplier leads to wasted money, lost time, and even the complete derailment of your business. The good news is that with a little knowledge and attention to detail, you can avoid these pitfalls and ensure you’re only working with genuine, trustworthy partners.

The first step in spotting red flags is understanding why fake wholesalers exist in the first place. Ecommerce is a booming industry, and with so many new sellers eager to get started, there’s no shortage of people willing to cut corners, looking for “quick and easy” solutions.

Scammers take advantage of this eagerness, presenting themselves as suppliers who can make your life easier. They may offer “wholesale” prices, extensive product catalogs, or even drop shipping services that seem too good to be true.

Unfortunately, these suppliers come with hidden costs, unreliable service, or outright fraud.

One of the biggest red flags is when a “wholesaler” won’t give you information about their manufacturers. Genuine wholesalers are authorized by manufacturers to distribute their products and have no reason to hide this relationship.

If a supplier refuses to provide information about the brands they carry or how they source their inventory, that’s a sign you’re not dealing with a legitimate business. Real wholesalers are transparent because they know their reputation depends on trust and reliability.

Another warning sign is when a supplier requires ongoing membership fees or charges for access to their catalog. While it’s common for a fully vetted Directory of wholesalers, like WorldwideBrands.com, to charge a one-time fee for access to vetted lists, an individual wholesaler does not need you to pay to see their products.

Wholesalers make their money by selling inventory, not through memberships or subscriptions. If you’re being asked to pay just to browse an individual wholesaler’s products, they’re not legitimate.

The way a supplier communicates can also reveal a lot. If emails are riddled with errors, phone calls feel rushed or vague, or customer service is hard to reach, these are all signs that something is off.

A real wholesale operation will have professional, clear communication. They’ll take the time to answer your questions and provide detailed information about their terms, products, and processes. Scammers, on the other hand, often rely on ambiguity to cover their tracks.

One of the most subtle but significant red flags is when a supplier markets themselves heavily to small online sellers. While this might seem appealing, genuine wholesalers usually focus their efforts on large retail accounts because that’s where the majority of their business comes from.

They might be open to working with smaller businesses, but they won’t spend a lot of time or resources advertising to them. If you come across a supplier that seems to be shouting from the rooftops about how perfect they are for small ecommerce stores, take a closer look. Real wholesalers tend to be quieter in their marketing and often rely on word-of-mouth or direct manufacturer referrals.

Free directories and supplier lists are another area where caution is critical. These resources may seem like an easy way to find suppliers, but they’re filled with middlemen or fake wholesalers.

Scammers use these platforms to collect your information or lure you into paying inflated prices for products that aren’t genuinely wholesale. If you’re using a directory, make sure it’s a reputable, vetted source with a track record of connecting retailers to real suppliers.

Again, WorldwideBrands.com has a 25-year track record as the best wholesale supplier directory on the planet. Using a well-known Directory with a real reputation will save you a lot of trouble down the line.

A legitimate wholesaler will also have clear terms when it comes to pricing, minimum order quantities, and payment methods. If a supplier’s pricing seems unusually low or their terms are too flexible, it’s worth investigating further.

Scammers often lure in new sellers with “amazing deals” that don’t hold up under scrutiny. Always compare their prices to the manufacturer’s suggested retail price or other verified wholesale options. If the numbers don’t make sense, neither does the deal.

One of the best ways to avoid fake wholesalers is to go directly to the source. Contact the manufacturer of the products you want to sell and ask for a list of their authorized distributors. Manufacturers have a vested interest in ensuring their products are sold through legitimate channels and will usually provide this information willingly.

This approach not only eliminates the risk of working with a scammer but also gives you confidence in the quality and authenticity of the products you’re selling.

If you’re already working with a supplier and something feels off, trust your instincts. Take the time to verify their credentials. Check for a physical address and contact number and see if their business is registered and in good standing.

Look for reviews or feedback from other retailers, but be wary of overly positive testimonials that might be fabricated. A lack of reviews or presence online is another red flag—it’s unusual for a legitimate supplier to leave no trace.

Protecting yourself from fake wholesalers is about staying vigilant and doing your due diligence. While it might take a little extra effort to research suppliers, it’s an investment that pays off in the long run.

Building your business on a foundation of genuine partnerships not only protects your profits but also helps you create a reliable, reputable brand that customers trust. Remember, if something feels too good to be true, it probably is. Take the time to dig deeper, ask questions, and make sure you’re working with suppliers who are as invested in your success as you are.

Learn more about wholesalers and everything else Ecommerce. Join one of my Free Ecommerce Zoom Meetings and ask about anything you like. I’ve been selling online for over 30 years; there are a lot of things I can teach you!