Wholesale Distributor Forum Pitfalls - Readers Beware
A couple years ago, we thought it would be a good idea to join a large thriving wholesale forum. It seems like the perfect answer to finding reputable wholesalers, and avoiding the frauds. So, we joined the forum and began reading.
One thing we noticed right away was there seem to be cliques. Small groups who seem to support one another, and back each other up in battles. So, we took a look at the membership list, and it became obvious through that and more reading that some members were paid members, and some were complementary members. Those comp members seem to have an inside track with a large wholesale directory. So, we watched and read and tried to see who the players were.
There were alot of cyber rambo attacks. Little gangs slamming other little gangs, telling tales, quoting history, past dirty deeds, and many postings alluding if not out and out declaring fraud by some members. There were tons of links posted to attest to the dirty deeds, including BBB reports, personal sites put up on the web for revenge, and copy and pasted court records.
At first we took great stock in what we heard. But, we used the trust, but verify method, and did our own research. During that time the Wholesale Distributors Net had been in pre-launch mode. There were members requesting listings, and we like to check them out to see if they were up to the task.
That is where we ran amuck. There was one particular wholesaler who was an easy drive from our location. He was very vocal in the forum, and seem to have the complete backing of the forum owner and manager. Thinking he was a 'pillar' of the forum and wholesale community, we decided it was time to pay him a visit, check out his offices, and his warehouse to see what goodies might be found. So, we stopped in unannounced.
What took place, what we saw and heard, and was later documented in the forum, began the war of wars. We told the truth, warned the other forum members, and had threats of legal action made against us, including some pretty vile comments. The forum owner removed the 'slanderous' posting, and we were chastised by the forum community, save a few who seem to think that things didn't add up. We didn't sway, stood our ground, and urged those who might sue us to come on and get it over with, so we could post the verdict and truth from the court records in the forum for all to see.
There was no court case, and the wholesaler slid under the rug for a while. Next we heard, was a steady stream of complaints that the wholesaler was paid, but did not deliver any goods. One complaint, later backed by another, claimed the wholesaler sold them cases of bootleg DVDs. Those would be the same DVDs we viewed and they tried heavily to push down our throats while we there. We didn't make a purchase that day, considered ourselves lucky, but were pretty disgusted we had wasted our time on this con man. Finally the last we heard, he was being sued by several, and criminal action was pending.
What we ultimately learned from that forum was this. One member can have many user names. It is very easy for a 'wholesaler' to have dozens, if not hundreds of testimonials from 'customers' who are really nothing more than the wholesaler, their employees, their family, and their friends trying to build the facade of a big, thriving, honest business. The forums do not provide any reliable information, they only waste time and cloud the issues. Posting against a wholesaler can be competitors's sabotage. Postings for a wholesaler can be the wholesaler themselves. In the end, you waste alot of time, and stand a good chance of being lulled into a false sense of security. Sure, the war might be amusing. But, seeing court cases posted with $10,000 or more lost due to fraud, in not entertaining.
When we began tracing website whois, we found wholesalers in one city, related to a wholesaler in another city, offering to go check out the seller and report back to the forum. How nice for a brother to go visit his own brother's business, and give back an honest report. You think? Think again. Bands of ebandits crawl the web looking for victims and what seems like the truth, quickly becomes a setup.
It reminded us of the Oregon ebay motors car seller, who had several ebay accounts, and would shill his auctions with his other user names, and give himself raving feedback. We only discovered this con job when we started tracing them through their websites. Turned out several ebay sellers who 'bought' from him on a regular basis had the same last name, and the same zip code. It was much like the Alberta Canada collectibles seller who had many ebay user names and shilled all his auctions, some dozen of times. We have to remind ourselves that the online community may not always be what it seems. We need to trust, but verify. The websites such as the forums and auction sites rely heavily on the ownership to police the sites, and make sure users can only use one name. Since that is not to their benefit, one driving up auctions fees, the other filling a forum full of postings and making the forum seem much busier than it really is, we have to use caution.
We advise that you avoid most of the forums, and spend your time at the local BBB site, your state licensing sites, checking out the whois, checking www.whitepages.com, and then come to your own conclusions. Go visit the wholesaler, drop in unexpected, and take a look around. We also advise that you ask yourself some real questions. How can busy wholesalers, making millions of dollars in sales each year, spend so much time in the forums? If they are that good, and that busy, and their postings are during normal business hours, what does that tell you?
We are not saying all forums are lions dens, nor all auctions are 100% shilled. But, in our experience the odds are about 50/50 that you will find a good deal, overall, in any given category. Some categories are more prone to fraud than others. The salvage and surplus industry is one to beware of. Most of those in the industry are brokers, do not own the inventory, have never seen the inventory, and are selling based on another company's word. in some cases, the original supplier has never given the seller any indication at all that the goods are available. In the end, remember. . . if it seems too good to be true, it probably is.