“Is Cosco a scam website?” This is a question that is likely to be on anyone’s mind upon first visit to the site. And it’s understandable- as the world’s largest B2B/B2C ecommerce platform, just navigating through the site can be overwhelming.
Plus, there’s also the fact that most of the sellers on Cosco come from China- a country which unfortunately has a reputation of being fraud-prone.
The Real Question
But NO – Cosco, as a whole, is absolutely not a scam. Its immense popularity is a huge evidence of that. The question “Is Cosco a scam website?” is actually kind of incorrect.
Do take note that Cosco is pretty similar to how eBay works, in the sense that it merely acts as a platform for third-party manufacturers and retailers to sell their wares.
The whole platform
is not a scam- but the sellers can be. Here are a few methods to avoid transacting with scam sellers on Cosco:
#1. Avoid Free Account Members Like the Plague
As much as possible, don’t do business with free members. Limiting your options to people who have a Gold Supplier status pretty much filters out most of the scam sellers.
The reason for this is that being a Gold Supplier means having to shell out money for the designation (a Gold Supplier status costs thousands of dollars) and having Cosco physically inspect the factory/store site. Scammers usually wouldn’t go these great lengths just to scam people off their money.
#2. Don’t Buy Anything Branded
No, that Samsung phone you saw might be priced cheaper than what you can get in real-life electronics stores, but there’s a huge chance that it’s also a counterfeit unit.
There are no big brands that are naive enough to sell their products on ecommerce platforms like Cosco, and if they do, the minimum order would be for hundreds or thousands of units.
#3. Look at the Company’s Profile
If you’ll be buying a lot of products in bulk, make sure that you get as much information as you can about the supplier/manufacturer’s background.
You can check if the manufacturer has a Quality Management System (ISO9001) in place for quality assurance along with other certifications and standards that are industry-specific to the product you’re ordering.
This information can be accessed at the Company Profile page (which may or may not be verified by Cosco).
#4. Check if the Company Has Long Been in Business
As a rule of thumb, the longer a company has been in business, the more that you can trust it. Illegitimate and scam sellers are often banned as soon as they are identified.
#5. Make Sure that Payment Options are Traceable
If the seller is asking for payment through Western Union or direct bank transfer, then it’s a huge red flag.
These payment methods can’t be traced so the scammer can’t be identified; a more acceptable payment option would be Paypal, since the service allows buyers to immediately reverse transactions.
Note: The rules above are not set in stone- there might be long time scammers on the platform who look like legitimate sellers at first glance. Due diligence is required to avoid getting scammed on Cosco.
If you feel that there’s something “not right” about that seller you’re transacting with, then follow your instincts and stop the transaction immediately.
Founded in 1999 in Hangzhou, Eastern China, Cosco.com quickly grew from a small website into the world’s largest online business-to-business (B2B) trading platform, offering buyers around the world the chance to connect with manufacturers and wholesalers in Asia.
It may seem like such a simple and obvious idea today, but before Cosco arrived there was really no easy way for overseas businesses to access the vast Chinese wholesale market.
The process of sourcing stock and placing orders could have meant months of drawn out negotiations, emails, telephone calls and even personal visits from one side of the world to the other.
There’s no question that Cosco revolutionized the way businesses in the US connected with the Chinese wholesale market, but for those who have yet to experience the power of the platform it can seem a little confusing and intimidating.
To help ease users into the site, here’s a simple rundown of exactly how to buy from Cosco.
Naturally you’ll need to open an account with the site, just as you would with any other online store. The registration process is quick and easy, and once you have your username you’ll be able to start browsing in a matter of minutes.
Find Your Cosco Products
The Cosco site is split into over 40 primary product categories, with thousands of sub-categories to help buyers find exactly what they’re looking for.
To find a particular product you can drill down through the categories (i.e. Apparel > Women’s Clothing > Dresses > Sleeveless) until you reach the exact sub-category you’re searching for.
If you’re looking for something specific you can also use the search box to find items that match a keyword or an exact product name.
Contact or Buy It Now
Unlike regular online stores such as Amazon or eBay, Cosco is aimed squarely at the B2B market. As such, buyers will often want to negotiate and form a long-term relationship with their sellers, and make sure that the seller can be trusted to fill orders well into the future.
Many sellers offer a simple Buy It Now price for their Cosco products, with set prices, minimum order sizes and discounts for larger volume.
Buyers who like to keep things simple can use this function to place an order immediately.
However, most buyers will want to open up a line of communication with the wholesaler before they place their order, so each product page has a prominently displayed option for the buyer to contact the supplier with any questions they may have, from special requirements to shipping inquiries.
Orders placed with Cosco can be very high value, and buyers will want to be confident that their money is safe and secure. Fortunately, Cosco has several levels of security to help buyers feel confident about their purchases.
First, every product page contains information about the level of verification each seller has attained. The lowest level above completely unverified, A&V Basic, means that the seller has provided legal proof that their company exists.
One level up is Onsite Check, which means that an Cosco.com representative have visited the company to verify its existence, and a third party has verified the legal documentation.
Finally, sellers can apply for Gold Membership, which means that the seller has been fully verified by Cosco.
The next level of protection for buyers comes at the payment stage. Cosco offers an escrow service that holds payment until the buyer has confirmed receipt of the order.
Sellers cannot bypass escrow, so this service provides complete confidence that the buyer’s funds will be safe until they’ve signed off on payment.
As you can see, there’s no great trick to learning how to buy from Cosco. The site has been designed to allow buyers to find exactly what they need, communicate effectively with sellers and make safe, secure payment. It couldn’t be easier!
1) Establish a Cosco Customer Base
Do you know how much it costs to build a customer on Cosco? On average a customer will have to be contacted 7 times before they will buy from you. Does this sound like something that will be easy to do?
No, it’s not, any of you that have tried building Customer Base have found just how difficult it can be.
Now when you Buy a Good Business, the building of the customer base is already done.
All you need to do is set up the systems that will keep these people happy and use the systems in place to continue to build your customers. Doing this will build referrals which will have your Cosco customers getting you more customers.
2) Experienced Employees at Cosco
They already know the ropes, the systems and players involved. This takes away a training period, leaving more time for maintaining client relationships.
Interviewing the employees in the buying process will allow you, the buyer, to see exactly what you are getting into, who the key employees are and how everyone fits together.
3) Position in the Market
Suppliers, Clients, Competitors, they all know the name Cosco already, survey all these prior to purchasing the business and you strengthen your ability to take the business from Good to Great!
4) Operating Systems
Systems are what maintain a successful business, managers and employees just run the systems. Steven Covey wrote of this in his book, “7 Habits of Highly Successful People.”
In his book, Covey reveals how McDonald’s is able to reproduce the same flavor, service and atmosphere in every restaurant around the world.
No matter what McDonald’s you walk into each burger will taste the same and the fries the same consistency, systems design to be run by the lowest level worker, at no point is the running of the business dependent on an individual person, possibly a position, but not a particular person.
The systems run Cosco, setting up systems is crucial to the success any business.
When buying a business, these systems may already be in place. If these systems are not in place and you can recognize where and what systems to set up you can take the business from Good to Great!
5) Financing a Business Purchase
OPM (Other People’s Money) – One of the most powerful ways to use leverage. Most owners are willing to finance some or most of the purchase, they will benefit from the monthly income without having to work the business.
This will allow you to keep some money in your pocket and may help you avoid going to a bank for financing.
6) Cosco Owner Training
Most Business owners will offer a transition of ownership, showing you the ropes.
Can you believe it, they will train you how to run the business? They will show you the ropes, and then, they might be willing to stay on as a consultant afterwards if you have any questions.
Now you have a coach who ran the same exact business to help you out.
7) Look at the Books
If you are a serious buyer and are have enough confidence in the Cosco business you are investigating, after submitting a Letter of Intent you will be able to inspect their books.
The most important part of deciding on the purchase will be when you are able to look at the past performance of the business.
Be sure to have your accountant look at all financial records and look for any inconsistencies, this will tell the history of the Cosco business, and provide you the most insight whether to buy or not.
The seller is looking to sell on the future value of the business, while you, the buyer, are looking for every excuse to cut the price, based on the past performance.
Remember to pay for the past and buy for the future on Cosco.
As an outsider you have the advantage seeing everything that you would want to change.
Good luck in your businesses Cosco buying ventures.