1) Fly and buy - meaning, visit them first to see the loads. This can backfire if you do not take the load with you when you leave. Who is to say they will ship the same load they showed you.
2) Buy a small load first. this way, you are not out thousands if you get ripped off. This also has a downside. Who is to say that this first load will be sent as represented just to make you happy and buy again? Who is to say all subsequent loads will not be ripoffs?
3) Use an escrow service. I have never done this so I do not know how 100% this method would be. But you also run into the same problem stated in #2.
4) Pay with a credit card so you can dispute the charge if you get ripped off. Down-side...If you do not have a platinum credit card, you have a better chance of not winning the dispute. Also, remember, if you do win, you will have to pay for the return shipping and most likely not be refunded for the initial shipping costs either.
5) Sort of like #1 but instead of just visiting, take the load with you. Hope that you can trust the surplus wholesaler for all subsequent purchases so you do not always have to go pick it up yourself if that is not a cost-effective way to do it.
6) Do your due diligence and check up in the company you are looking to buy from. Come to forums like this one and check to see if anyone else has had dealings with them
7) Stay out of the surplus business and stick to selling brand new in box items for more reputable wholesalers. (this is the only 100% way of not getting ripped off by a surplus wholesaler
).
There is also another solution (sort of). Buy directly from the reclamation centers. As far as I know, there are 3 major reclamation centers in the US...
GENCO
FEDERATED
TECHLIQUIDATORS (they sell circuit city surplus. Please note that when buying electronics surplus, most of it is defective. this is only effective for folks that are in the business of repairing/refurbishing)
There are some barriers and drawbacks here...
1. Most of the time, they will only deal with you if you are buying by the truckload.
2. They want no complaints. You are getting the stuff cheap and in quantity. If you complain, they will either not sell to you anymore or you will not have a chance of getting better prices. This is the surplus business. It moves fast. These major reclamation centers have no time for whiners. When it comes down to it, they do not need your business. there is a huge demand for their loads and if you stop buying from them, they can get another buyer just as easily as they got you. This is not like buying at WalMart...this is B2B surplus sales. No time for folks that need to be held by the hand and no time for whiners.
Also, beware of GENCO. They have many warehouses (I believe one in nearly every state) and dealing with the right one is key. Some produce better loads than others. Also know that GNECO has been known to cherry pick their loads and sell the better stuff on ebay directly to the consumer. One of their userids on ebay is CHANCEDEALS (a very appropriate name, I must say). They also have another userid they use to sell on ebay as well but I cannot remember it right now.
All in all, I have to tell you that I got out of the surplus industry for many reasons. The 2 main ones being that I was tired of dealing with crooks (most of them are IMO) and the most important one is that after I figured all the time I spent negotiating, sorting, fixing, selling, packing and shipping, it really is not worth the time. You can make the same money selling new, sealed box products. The margins may be lower most of the time, but the time spent with the product itself is much lower, therefore your average profit per hour is greater.
If you are willing to spend time researching hot products, you will find that you can get good prices on new, sealed product that you can mark up 50 - 100%. That is much easier than buying junk and sorting through it and fixing it, I must say.
Good luck.
Please add to this thread if you have something valuable to share in the way of buying smart and protecting yourself when buying from surplus wholesalers.
