As we’ve worked within the wholesale and dropship sector, no doubt we’ve come across a lot of suppliers hailing from the far east… China, in particular. They offer us a glimmer of hope that the iPhone is not an unattainable dream, and maybe we can get those great Prada bags. However, as with all beautiful dreams, they do not typically stack up well when compared to the starkness of reality. When you find something that seems too good to be true, that is typically because it is.

When sourcing from Chinese suppliers, there are a few things that we need to be aware of. First and foremost, the copyright laws that we’re accustomed to in the United States do not apply to Chinese suppliers. They can market an in-house product as a name brand if they so desire, and there is nothing by their laws that has them at fault. This is what is called the “Grey Market”. It is not necessarily illegal in China, for instance, to market a non-name brand as a name brand, or to replicate an item exactly. However, we are still bound by the laws of our land, so if we’re unknowingly marketing the Chinese iPad as an iPod, it is we who will be in trouble for it. We will be flooded with returns almost immediately from our dropship website, but if we’re trying to source these counterfeit items on eBay, then we’re going to quickly find our accounts banned for it.

A second issue we run into is that the product that we’re purchasing may be coming from black market sources. Black market sales are strictly speaking illegal, and as such it will exist as an ephemeral thing. Since we are not receiving from our supplier a consistent source, when their stock is gone, it is gone, and even if we’ve placed the order, we have no assurance we’ll ever receive the order, or see the money again once its been sent.

Now, taking a huge leap of faith, if we find that the items we are receiving from our Chinese-based supplier are the real deal, we now have the logistic problem of getting it halfway across the world in a reasonable amount of time… and while still being able to maintain a profit. In recent years, tracking technology has made leaps and bounds when it comes to international orders, and we’re going to need to take full advantage of that. We will want to know where our item is exactly… because its going to be spending a fair span of time getting from the supplier to the customer. The shipping cost to allow for a more reasonable amount of time will typically be much higher than a buyer is willing to pay, and the increased cost of having to go overseas is going to eat into our profit.

The biggest thing to remember when sourcing from Chinese suppliers is that these problems lie directly on our shoulders; any instances that come up are our responsibility. eBay does not accept “I thought it was legitimate” as an acceptable excuse if we try and source counterfeit products from a Chinese supplier, and our buyers on our website also tend to be less than forgiving when their $300 iPad arrives at their door. It is our responsibility to ensure that our supplier is legitimate, but how will we do this?