Is there insurance to protect against Wholesaling fraud?

[mikehende]

Hello, we are now in the process of becoming a wholesaler which means we will be selling in bulk to buyers on the international scene but because the are different ways a buyer can scam us we are searching for insurance to protect ourselves in case of fraud. Meaning, if a buyer should scam us in any way, we can be reimbursed from the insurance. Searching the net I am not finding coverage for this purpose? Any help/advice/leads will be appreciated, thanks.

[vangogh]

I don't know offhand, but I would think you can insurance for anything. I'm pretty sure there are companies who will insure anything if the price is right. I searched for both:

insurance for wholesale distributors
insurance for international wholesale distributors

There are plenty of results from big name insurance companies offering insurance to wholesalers. Some mention specific categories of products, but I don't know what you're specifically selling. Even if your product isn't one they list, I would think you could get in contact with them and see if they'll insure you.

[mikehende]

Thanks for replying, yes you are correct, this morning I got this from an online inquiry:

Hi Mike,

I am happy to confirm that we do offer coverages similar to those you are seeking.

You have two options on pursuing a quote that is specific to your business needs. The first option is by contacting a local agent in your area and after providing them some details about yourself and business they can create a quote. This will be a face to face type relationship and we have two companies that write commercial business in your state and they are Nationwide and Allied Insurance. I have included both links on how to find a local agent and what you need to do is enter in your city and state or zip in the “Find an Agent” box to generate a list of agents closest to your current location.

[turboguy]

I am just curious what terms you plan to offer? A great deal of international trade is done through an Irrevocable Letter of Credit. It is a pretty decent way to protect parties on both ends of the transaction. We have found it to be a bit of a pain in the neck however and just have our international distributors pay in advance with a wire transfer. We get no objections to that process and it does take the risk out. We have had times when we have extended credit to some of our overseas customers and sometimes it works and sometimes I would have loved to have had insurance. We just stopped doing that totally. Now is is send us the money and we will send you the merchandise.

[mikehende]

We plan on doing bulk mobile phones sales plus other electronics but with so many different types of scams going on these days, you never know what to expect.

[RR151]

Ever thought of using an agent within the said country to negotiate and use escrow for payment. The insurance is going to have a specific way to do business that will have checks and balances. They know the numbers for sure and are not in business to loose money or pay the insurance claim.

Just a thought...RR

[mikehende]

Since we are new to this, we would not know how to find an agent in any particular country, posting on craigslist and linkedin and the many b2b sites are getting inquiries from people all over the globe who wants to use paypal which we don't mind but our fear is if someone should order a large amount then wish to return the lot with exchanged maybe counterfeit items, that is our main concern.

[MyITGuy]

Since we are new to this, we would not know how to find an agent in any particular country, posting on craigslist and linkedin and the many b2b sites are getting inquiries from people all over the globe who wants to use paypal which we don't mind but our fear is if someone should order a large amount then wish to return the lot with exchanged maybe counterfeit items, that is our main concern.

Avoid PayPal - You likely will never win a disputed transaction and have a high propensity for fraud. Wire Transfers would be best for these types of transactions.

Regarding counterfeit items...document the serial numbers and specifics of what you send out (I.E. Make/Model/Status/Grade/Accessories/Known Issues). When items are returned you use this list to validate if it matches what was provided.

[mikehende]

Thanks for the advice. problem is to document the serial numbers of every product, think I will look into a barcode scanning software as that should be the easiest way, still a lot of work.

We got a quote of $2100 per year for full transaction coverage from a legit insurance company.

[david15beck]

Yes, there are plenty of websites who covers these types of business.try Trade Credit Risk on Google.i think they can help you better in any other way.