The liquidation industry is filled with scammers and bad-faith business owners who want to get as much money out of you as possible and leave you with bad products. One of the best ways you can save money in this industry is to understand how to sniff out these scammers and ensure that every business deal you make is a good one. We all learn this skill with a few mistakes along the way - but you can avoid some of those mistakes by using these business strategies.
A Liquidation Buyer’s Worst Nightmare
When you’re working in the liquidation industry, inventory doesn’t come cheap. Unfortunately, that’s the nature of this industry. When your business relies on buying large inventories by the truckload - it gets pricey. It’s not unusual for us to spend close to or above $10,000 in one business transaction. Imagine spending $7K on a truckload from a new business that you thought you could trust…only to find out that they were scamming you this whole time.
The truckload arrives, and none of the goods are as they were described. They are damaged, the load is half full, or you unhappily unpack 5,000 rubber duckies that you know will never sell. Or worse yet - the truckload never arrives and you can’t get your money back.
This is a liquidation buyer's absolute worst nightmare. Whether you’re buying wholesale like us, or you’re buying from wholesale sellers like us, you’re likely familiar with that “pit in the stomach” feeling when you realize that your business just lost out big time due to a scam. So how can you avoid scammers in the liquidation industry? Here are a few tricks that we’ve found useful over the years - they will help you no matter what part of the liquidation industry you work in.
Visit New Business Partners
Early this spring, our founder Damian flew to Philly and back in one day - 15 hours, to be exact - just to meet with a potential business partner before closing a deal. Sure, we shelled out around $400 for transportation, but that $400 bought us the confidence we needed to pull the trigger on an important sale. We had never worked with this individual before and wanted to see the merchandise before we bought it.
No matter how far away your new business contact is - it’s always a good idea to invest in a visit to see the product before you buy it. This is a surefire way to avoid scams! Any reputable seller will be glad to showcase their goods before finalizing a deal. If they refuse? Time to move on.
You may have to invest financially in the trip to check out the merchandise, but this will pay off in the long run. Spending a few hundred dollars to verify a load that will likely profit you in the thousands is a wise business decision. Look before you buy!
Read The Terms & Conditions
Absolutely nobody likes to read the terms and conditions. But as a business owner, you need to be aware of all the fine print you are agreeing to when you make a deal. Typical terms and conditions will inevitably include statements that reduce the liability of the business you are buying from, but they shouldn’t be:
- Unfair
- Illegal (including violations to public policy)
- Inaccurate (check for other business names or any sign that these were simply copy and pasted from somewhere else)
- Fraudulent
- Misleading
- Coercive or threatening
In addition, these terms and conditions should be available to you before any purchase is finalized. If you’re spending thousands of dollars on a load, make sure you’re aware of their privacy policy, terms and conditions, and return policy up front. If you can’t access these documents, you may want to reconsider the transaction.
Check Their Online Presence
In today’s world, this is essential. However, in this industry, it shouldn’t be the end-all. Some sellers in the liquidation industry could care less about their online appeal, especially older sellers who have been at this for a while. So if you can’t find a modern social media page or a well designed website, that’s not necessarily a red flag. But there are some green flags to look for that definitely give us a boost of confidence when sniffing out a new partner.
Green Flags:
- They have a multi-page website that is up to date and relevant.
- There are many positive reviews for them on Google.
- They have a face to the business. You should be able to see this face on their social media pages (if they have one), on their website (the staff section), and hopefully even when you speak to them on the phone or visit them.
- Their social media page is frequently updated and contains more than just advertisements.
- They have customers engaging with them on Facebook or other online platforms.
Red Flags:
- Their website lacks detailed information or contains ample typos.
- There are only a few reviews for their business online. Some of them may include typos or be worded awkwardly.
- You can’t figure out who you are talking to. There is no face to the business.
- Their social media page mainly consists of advertisements. Very few pictures - some of the pictures are blurry or grainy.
- You can find another business with the same name that is clearly more legitimate than this page or website. On Facebook, a great way to check the validity of the page you are on is to go to the “Page Transparency” section and evaluate what you see. Here is a scammer page that we’re working on getting taken down that is using our name to scam people. The name history of this page shows you all you need to know to realize this is a scammer duplicating a real business to take advantage of people.
- When you reach out to them, they ask for bank account information, credit card information, or too much personal information before any deals have been negotiated.
When in doubt - trust your gut. Not every business in this industry invests in their online presence as much as we do - so you shouldn’t expect everyone to do so. Don’t immediately shut down a deal just because you don’t find their website impressive. However, take note of the red and green flags we note here and if you see a lot of red flags along the way, proceed with caution and definitely make sure you plan a visit to see the merch if you are still considering moving forward.
Pay Attention To Their Sales Techniques
Any good seller should be persuasive. The moment you start to feel persuasion turn into coercion, manipulation, or obsession - it’s time to move on. If this seller seems almost too dependent on your purchase of their product (they seem desperate to make the sale), that’s a major red flag.
A good business deal should be based on mutual respect and should leave you with enough room to make your own educated decision and do what is in the best interest of your business. A bad business deal will leave you feeling pressured to make a snappy investment that you aren’t prepared to make simply because you felt like you had to. Avoid working with anyone who tries to force your hand into buying - scammers are notorious for this behavior.
Conclusion
It’s not always easy to avoid scammers. Some of them are highly intelligent and know exactly how to catch us when we least expect it. However, most scammers are relatively easy to sniff out if you know the red flags you’re looking for. In the liquidation industry, it’s essential to avoid scammers and ensure that every load you buy is going to profit your business. One of the best ways to do that is by visiting a new business partner to see their merchandise before you buy a load from them. Looking for pallets or high piece count truckloads? Come visit our warehouse in Aurora, Illinois. We’re always happy to meet new customers and pride ourselves on our transparent, honest sales process. Scam free - scouts honor!