There are hundreds of cases reported and thousand go unreported about scams with investors from digital service providers aka VAs and Agencies.
If you study this detailed guide as an investor or the person who is considering to hire a one-man to manage all your business operations, you MUST read this guide, print it and stick it on your front wall to ensure you know all the scam practices and how to protect yourself at all times.
With rising scams in the World and Pakistan specifically, there is a high number of professional service providers available too who can really help you grow your business. However, sometimes a professional also does wrong unintentionally and if you control your business, you will remain protected in such situations.
Common Scams
We will go through a few known scams and bad-practices you should be different stages and steps based on the business types you should be aware of.
1- Carding
People use stolen cards to purchase inventory. Keep your Credit Debit Cards protected. Do not hand over your primary cards to the VAs/Agencies. Give them staff card (from your banks) or Privacy virtual card (link in the first comment).
You can also buy prepaid cards with lower balance to reduce your financial risk.
2- Inventory Scam
⤷ If someone tells you I already have the inventory, run far away from this provider! It’s a Scam…
Regardless of where he/she wants to sell, or sourcing from. You should not involve yourself in such ideas.
3- Supplier Payment Scams
⤷ Never send inventory payments to your VA if he/she tells you that he/she is going to pay from his own. This is a Scam! Always ask the VA to get you connected with the supplier and you verify supplier and pay them directly.
4- Fake Supplier (Wholesaler, Brand or Manufacturer)
Our people have succeeded well in this domain. If you are sourcing from a supplier you haven’t verified (using my strategies) just to save a few minutes of your efforts, you’re risking all your money here. Fake suppliers will show you they shipped the inventory but you’ll end getting boxes with stones or trash inside.
Safe Practices
Consider the options below to avoid a negative experience with your service provider.
→ Learn the business
Many investors want to dive into ecommerce and digital businesses considering the ROI it brings over. However, without firm business knowledge, you’re inviting the robbers yourself.
If you don’t want to spend time in learning, the best idea would be to consult the mentor first and make notes of the specific areas where you have to be extremely careful with your service provider.
→ Hire VAs for specific task only
Many investors end up hiring Jack of all, Master of None. A VA who claims to handle the whole account, there is a high chance he/she may not have enough experience.
You should interview that person specifically about his/her process of handling the whole business alone. If he satisfies you with actual strategies or process, then give him a try. Hiring a Jack usually doesn’t bring you quality results.
In this process, you should be the one looking over the overall operations OR you may later on hire a Manager to monitor the progress and keep the operations running.
This manager can be considered as a Co-Founder too with a small equity share in the business.
→ Verify Suppliers Yourself
There are many stories of fake suppliers and VAs scamming investors in the name of buying inventory from suppliers who is unknown to the investors.
Always ensure you verify the supplier yourself. I have created a detailed guide video about how to verify and authenticate a supplier regardless of the location.
You can learn from my video on YouTube. Verify Supplier Authenticity.
→ Micromanage Your VA
Micromanaging is difficult, but there are tools that will help you manage it without involving yourself much. During the interview process, ask your VA that you want to use screen recording tools like WorkSnap or TimeDoctor.
Such tools will take a screenshot of 10 or 15 minutes of your worker and record the keyboard/mouse activity on your account. This ensures the VA is working specifically for you and you may see their screen’s screenshots.
If your VA is reluctant using such tools, there is a high chance he isn’t honest and won’t continue.
→ Never hand over a credit card
There could be many reasons your service provider may ask you for your payment instrument details including credit or debit card. And sometimes there are genuine reasons for him/her to have it.
Consider having a virtual card using Privacy (for US and Canadian nationals) OR simply call your high street business banking and ask for a staff card with lower limits like $5 to $10.
Another solution is to set up a virtual bank account using Mercury or Wise.com and have its virtual card (with limited spend) for your service provider.
→ Never opt for existing inventory
Your service provider might tell you that he/she has inventory available already and can launch on your store without spending time on sourcing for new suppliers or products. There is a high chance that this inventory either doesn’t exist or is a rejected items from another online store or supplier.
You have to verify the supplier yourself before making any payments for inventory.
→ Consult with Huzaifa Ali
It is always a good idea to consult with Huzaifa Ali for your next ecommerce or digital business in detail. Having a 22+ industry experience, Huzaifa can help you with all the ins and outs of your new digital venture.
The consultation is usually a paid call, charged by the hours. You can directly book on Huzaifa’s calendar.
Mentorship and Coaching is also available if you are entering in Amazon, eBay or Etsy business models.