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How to ensure the security of wholesale transactions?

How to ensure the security of wholesale transactions?

Transaction security is one of the main issues that arise when discussing wholesale trading, import and export. The buyer's expectations are most likely to be comparable to those of the B2C market: you place an order online, pay for it, and then wait for the goods to be delivered. If something goes wrong, I'm not worried because the transactions are secured by the payment providers.

However, we need to bear in mind that wholesale trading is different. The average value of the transaction is many times higher than that in the retail market. In addition, the B2B sector does not apply consumer protection laws because ... there are no consumers in it. The essence of wholesale is not to buy for your own needs, but to buy with the intention of further resale.

So how to ensure the security of the transaction?

Ordering samples

When purchasing from manufacturers and distributors, there is usually an option to order samples of the products. This is not a big investment, while it  allows you to pre-evaluate the quality of the goods and their potential for resale. It is really worth asking about this option, especially if you have in mind purchasing a large batch of goods.

Collect in person and inspection of the goods

Much of the wholesale and B2B business still takes place face-to-face - mainly because of the above-mentioned differences between wholesale and retail trading. Viewing the products in the dealer's store or showroom often helps to avoid misunderstandings and doubts about their condition and quality.

Letter of credit

This is a solution recommended especially in foreign trade, import. The transaction is secured by a trustee bank that becomes a party to the trade agreement. Typically, this is based on a contractual agreement that clearly defines the obligations of the buyer and the seller. The importer deposits the funds with the bank, and the exporter receives them only if he or she fulfills the contract. Thus, the letter of credit secures both parties to the transaction: the importer, in case of problems with the goods and delivery; and the exporter, in the event of the buyer's insolvency.

 

The above methods significantly increase the security of import and export, as well as wholesale trade. On the next transaction, it is therefore worth asking the seller which one (s)he offers and using it. 

Do you need more information on how to avoid scam in wholesale trading? You can check out this post from our Merkandi blog: https://blog.merkandi.com/articles/10-ways-avoid-scam-wholesale-trading/

Author:

Merkandi

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