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goWholesale Forums » Wholesale Buyers » General Chat

Legitmacy of a Company

3 posts

  1. afterhour

    Joined: June 2004
    Posts: 21

    Hi everyone

    I would like to ask, how do most of you verify a company legitmacy? Like many of you, that look for supplier over the net (I know some aren't, pardon me :P) I would like to know.

    Actually, recently I've been dealing with a supplier that deals with MOQ of 100 units (well, 100 * 1000 USD). They accept L/C and escrow. Forget about escrow, but L/C should be of the safest amongst all other payment (well, please don't count fly and buy, we all know this is the safest, if u know what u are doing). They also gave me the registration number and I checked online that it is legimite.

    The process is like this, ICPO, PI, L/C, sight inspection etc etc (the formal process that big order's do). Presumebly, this should be ok.

    However, being a small buyer that cannot meet such MOQ, I manage to talk through and I am able to hv smaller orders. However, this method will result in T/T in advance, or thru their attorney using Escrow (he gave me a number to contact, which I havn't done so yet.)

    They also give me a second option, that is they supply us with another factory but at a higher price (dont know how much higher), yet I think they will then accept L/C with this second option.

    Note that both option are by production run.

    My question is this, hving the registration number, that they accept L/C and escrow (for big order) and T/T or escrow in small order, how confident that we can trust this company? (Let's assume that the product are legitmite and not fake) Is there any other way for me to check them out? What also concerns me is that I saw on the forum there are just damn far too many FAKE escrows!!!

    If anyone can provide me some suggestion would be greatly appreciated!

    Thank you in advance~

    PS: their prices are sensible and are "not too good to be true" for an order of 100 pieces. In addition, he's pretty professional and not like alot of fraudulent seller which I've been contacting quite frequently reasonly)But the website is from, say, yahoo (not actually yahoo, but u get the idea), which I know some of the people here uses and are legitmite.
    Posted 5 years ago  |  Login or Register to Reply
  2. mason

    Joined: June 2003
    Posts: 497

    Hi. This is a good post i think. This comes up a lot of times in these forums, and there's never a clear answer. Hopefully this thread should hopefully clear up some of the questions out there.

    Personally, I think i'm a big buyer. I normally purchase 3000 items per month for retail sales myself (not including wholesale). I think this classifies me as a decent size buyer.
    Well i normally acquired a new supplier recently, and things are looking good so far. But here are the steps I normally take to acquire a supplier :

    For Large Purchases
    1- Google search there email, or name of business, or first & Last name
    2- Contact them by email and see how fast they respond
    3- Call there business number and ask dumb questions. Don't let them know that you were the one that emailed them. Call them back the next day and see if anyone is still there. (Just remember the time difference. You wan't to call during there business hours.)
    4- Get a product list with pictures, and make sure they're not the manufacturer pictures, you wan't the actual pictures of the products they claim to have in stock. Even if this takes 1-2 days for them to get, this is ok.
    5-Order samples (I normally tell them up front i'm looking to buy 3k/month so they give me samples for free. I just pay shipping).
    6-Review the samples, take pics and ask partners, friends for there opinions. If no one can clearly say they're fake, then they're most likely real.
    7-Place an order of 100 pieces (@ $10 a piece, thats $1000 USD). Slowly, every week, order double what you ordered the previous week until trust is built. If you're a big buyer, suppliers want your business. Offer them a different way of sending money. But most will not accept paypal. They want to protect themselves from the crooks who pay, then file fraud through paypal, and paypal freezes the funds in the guys account.
    8-One rule i have is i don't wire across seas. Try to convince the supplier to either get a bank account in the USA, or you can wire it to someone he knows here in the USA then have them wire it over to the person across seas. You have some more protection this way if you're in the USA.

    This is what i do when i work with a new supplier. This plan isn't 100% Full proof, but i've grown acustomed to it and it works best for me.

    For Small Purchases
    The smallest purchase i've done was 500 pieces. That was my first order i've ever done and almost lost $5000 to some guy in India. After 6 month's I did get my money back, but it took 6 months to get it.

    For small orders, I would recommend purchasing from brokers, or people who are reputable in your country. There is always a broker for every product, it's up to you to find them. This is what i would do though through them :

    1- Google search there email, or name of business, or first & Last name
    2- Contact them by email & by phone and block your number when you call. Business should answer phones that have a blocked number. Most times when business's won't answer a blocked number its because they're trying to hide from someone they probably screwed (this is not 100% of the time though).
    3- Most cases on small orders of 100 pieces or less, they won't send you a sample. But if they do, definitly get one.
    4- Get the product list with actual pictures
    5- This ones very important - Ask for references. If they won't/can't give you references, then I would cut them off. People ask me for references all the time, and i always give it to them.
    6- Expect delivery through a broker to take 3-4 weeks. Even if he claims "10 days!". Especially if his costs are high & he's drop shipping. When you place your order & pay, your order goes through atleast 2-3 people, and that can take 2 full weeks alone(because of the bank wires going through 2-3 people takes a few days for each). Then to actually ship it out it should take 2-3 weeks for shipping if coming from across seas.

    On small orders you WILL pay a higher price only because theres more middle men (and woman hehe), but you will have the security of dealing with a reputable person and thats what you're paying the extra cash for.

    Another thing with small orders is that shipping from across seas into the USA is more expensive per piece than large orders. So this is another reason why you pay more on smaller orders.

    I hope i answered your question. I might've gotten off topic. If you need clarification on anything, let me know.
    Posted 5 years ago  |  Login or Register to Reply
  3. afterhour

    Joined: June 2004
    Posts: 21

    :o

    That's a very comprensive reply! Thanks for that!

    For my case, the company I am dealing with is a broker for sure because their orders are by production run. (i.e., submit the order to the factory) Therefore there won't be any stocks on hand for sure.

    Ok, I did the following:

    - Search in google and results comes up, quite a number of trade leads of different website has its existence (ok, i know some are fake even though they exist in different)

    - Email the guy, response time is not intant, but receive reply the next day for sure

    - Looked up the the registration number, which appears to be legimite (oh, i have emphasis one thing is that, this malay company is partnershipped with a USA company. I am dealing with the malay company but hvn't able to check, I just can't find where to check. Whereas, I've checked the reg number in USA, and it is legimite. Note that, if T/T, the fund will be wired to this US company's account)

    What I havn't done is:
    - ring the guy up
    - ring his escrow attorney
    - ask for a reference

    (You've mentioned that order from local supplier, but NZ, well, it's like a monopoly i reakon, by one of the big firm here.)

    I will ring them up and see how it goes.

    You've mentioned that if the guy doesn't have a US's bank account, you will have more protection to wired it to someone he knows in US, this only applies if u are located in US rite?
    Posted 5 years ago  |  Login or Register to Reply

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