- Ecommerce presents a whole world of potential customers. It can be very lucrative.
- You should sell on Marketplaces like eBay, Amazon, Walmart and others to further enhance your earning potential.
- Just like good people, there are bad people who are lurking to take advantage of weaknesses in the system.
- You will face fraud – sooner or later. In fact you will often face fraud.
- While you must take all the precautions that are suggested by your bank and payment processor like PayPal etc., you will still get defrauded.
- If you get a massive hit, you may not be able to recover from that.
- How to avoid that?
- Figure out how much of a risk you can handle. That is a figure that may hurt you but not run you out of business.
- Let’s say that figure is $2,500
- On your own website, manually process such orders. Ask the customers to send a wire transfer or certified check before you will ship.
- On Marketplaces, it is harder to control. If you get orders for large ticket items and then keep canceling them, marketplaces would lower your rating. Also, if on a marketplace if you ask a customer to send a wire transfer, the marketplace will suspend you because they think you are circumventing their commission.
- We use a service called http://uploadmyproducts.com to block products that are over our risk threshold, in this example $2,500. We get data feeds from distributors all day long but we don’t have to worry. We setup once and the software keeps blocking such high ticket items from being listed on marketplaces.
- Do we lose some business this way? Certainly. But we minimize the risk of being brought to our knees by fraud.
- Helps us manage risk for our long term survival and success.
Ecommerce can be very lucrative. However; you must protect yourself and don’t take a risk that you cannot recover from.