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Top 10 Ways to Avoid Fake Escrow Services

(10) If you are a U.S. user, buying or selling on eBay, you should only use escrow.com. It is the only service approved for use on the eBay U.S. platform. For international users, these four additional services are approved for use on eBay:

- EscrowAustralia (Australia)
- Escrow Europe (Italy and Spain)
- iloxx Safe Trade (Germany)
- Triple Deal (France and Germany)

(9) Do not fall for e-mails that appear to be coming from eBay that encourage you to use some time of escrow service. These are phishing scams.

(8) Do your homework-- don't just look at the supposed escrow company's web site. If the company is legit, you'll find some third-party references if you just type their name into any of the major search engines. Also, check out the message boards, they will have some feedback (good or bad) from people who have used the service that can help guide you on their experiences.

(7) Verify that any third party seals are authentic. Escrow services deal with sensitive data. This means that they should at least be using an SSL certificate. Make sure that the certificate (most often from VeriSign) is authentic. Also, double-check that any other third party seals that are included are authentic. For example, if it they have an 'eBay Certified Solution' icon, check out the directory on eBay's web site. It's easy to copy the logo, but they won't be listed in the directory (in fact, you won't find any escrow companies listed in the eBay Certified Solutions directory, so if they have that logo on their site, they aren't legit).

(6) Check out the license(s). Escrow companies are typically licensed and governed by certain state, national or international legislation. They will often provide you with this information on their site, and in some cases, you can use the license information to look them up in the regulatory body's database.

(5) Make sure the service description is 'authentic'. Copy two or three sentences that describe the service and run them for a search on Google. If someone is setting up a fake escrow service, they probably have not taken the time to develop unique and original content for the web site, and have ripped it off the web site of a larger company. If the description of the service is identical, or near-identical, to a site like escrow.com, it's probably fraudulent. Escrow companies invest enough in legal counsel to know that they should not engage in copyright infringement.

(4) Beware of offers that are too good to be true. If a buyer tells you he or she is willing to pay an extra $1,400 to use an escrow service for an item you are selling for $900, it's probably a fraud. A buyer who's willing to pay that much of a premium will either go to a local vendor (so they can see them item) or is careful not to waste money, and therefore would not do so in paying you that much of a premium.

(3) Rely on the track record. The reason that escrow companies do not exist in the market in the same volume as vendors is that (a) they are expensive to set-up; (b) they are expensive to market; and (c) it is a competitive industry where individuals rely on the brand name. Don't settle for a 'cheaper' service that seems to be able to offer more competitive rates like your local mom-and-pop store. Escrow services are not built that way.

(2) Sellers should always request a signature for delivery to ensure that buyers do not claim to have never received the product.

(1) Call them up. Escrow services will almost always provide a phone number because they know that the seller and the buyer are participating in a transaction with a sizable amount of money to be exchanged. They are better off answering your questions up front to ensure that everything materializes the way it should.

Top 10 Ways to Avoid Auction Fraud

(10) Check who is bidding in your auction and cancel bids by bidders with negative feedback.

(9) If you don’t get a response from a winning bidder, try using another email address - preferably another service (e.g. If you are on AOL, use a hotmail account) to reach them, in case your mail is being blocked by a filter.

(8) Use eBay to send a reminder after 3 days. After 7 days of non-payment file a non-paying bidder alert.

(7) Request a user’s contact information from eBay and try to directly contact the user by phone to resolve payment. Do this within the first few days. If it is a communication
problem, you may catch them before they bid on a similar item.

(6) eBay allows sellers to block bids from up to 1000 user IDs. If you have a problem with a bidder and/or if someone with negative feedback bids in your auctions you can add them to your block list. There are also databases and lists online of non-paying bidders that you can use.

(5) Be very specific about your shipping and handling charges, and place them prominently. eBay recently conducted a study among buyers that did not pay for an item, and 21% responded that the shipping and handling charges led to non-payment.

(4) Boldly state the forms of payment you will accept. If you can, accept as many types of payment as possible. The same study conducted by eBay revealed that the second highest reason for unpaid items was desired from of payment unavailable. A staggering 24% did not pay for this reason.

(3) If using Buy-It-Now, then enable immediate payment so that anybody who uses purchase must pay for it at that moment to end the listing.

(2) Require users with low feedback (less than 5 is a good rule) to email you prior to bidding. This affirms their commitment and understanding of the eBay system. Many non-paying bidders are new users that do not understand the binding nature of bids.

(1) The number one way to reduce auction fraud is the simplest one of all: USE RELIABID!

Top 10 Ways to Build a Successful Drop-Store

Drop-shops...Drop-stores...Consignment stores...Trading Posts...

They have many names, but ultimately, they are all in the same business. Over the past couple of years, they have been a very popular and growing trend in the online auction marketplace. In spite of margins that often exceed 30 percent, many of these stores, and even whole franchises, have gone out of business. Here's how to avoid it happening to you:

(10) Become an expert. You will be competing with thousands of other sellers and consignment stores who are also looking to get offload their inventory. Knowing how to create the listings most likely to attract buyers, and how to build-up your sell-through rates will either set you apart from other sellers or lead to your demise.

(9) Keep your overhead down. Some months will undoubtedly bring about more business than others. There is no sure way to predict what your next month's sales will be, and there are often some months that are slower than others. Make sure that you plan ahead and keep overhead low. You will likely need to withstand 2-3 slow months every year, and you do not want your fixed costs to be weighing you down.

(8) Do not ignore the season. Keep in mind that people will likely be bringing you products when they no longer have any use for them-- often this means that other people have less use for them. For example, selling skis immediately after the ski season ends will not bring you the greatest return. You may want to advise your customers and wait a few months when you might be able to get twice as much for the same product. Otherwise, look to offload the item in the Southern Hemisphere, where winter is just round the corner.

(7) Although you have a big store in the brick-and-mortar world, buyers will see you just like any other store in the virtual world. Building up your feedback is very important, and without sufficient feedback you won't be getting enough bidders to get the highest sales.

(6) People often do not know how much money you can get them for the junk they have around their homes. When you reach out to someone, be equipped to let them know just how much they might be able to get for the stuff they aren't using.

(5) Word of mouth is key. You are operating in a community, and if someone has a good experience with your service, they will likely share that experience with their friends and family. Nothing will help your business grow more than satisfied customers.

(4) Pick the right franchise for you. There are literally hundreds of franchises that have cropped up since the drop-shop trend came to life. Today, a few major players still dominate the market. On the positive side, they have a business model that works. But on the other hand, they likely will be charging you larger franchise fees. Don't be afraid to shop around, but also don't settle for the cheapest option unless it's the best option. Some extra expense may provide you with the added exposure and brand reputation that you need to survive. You need to weigh these things.

(3) Talk to other franchise owners. If you feel like you've settled on the right franchise for you, don't be afraid to contact some other franchise owners. Don't settle for whatever references you receive. All the major franchises have their store listings available on their sites, and most of the store owners will spend a large portion of their time in the store itself. Get the contact information off their web site and contact these individuals to find out whether the business model has worked for them.

(2) Location, Location, Location! You probably want to start a drop-shop in your neighborhood, or a new neighborhood you want to move to, but does it make sense to open up a store in that area? How much will the rent run you? What does the competition look like? What are the demographics in your neighborhood and will you be able to attract the type of clientele that will not only use your service once but keep coming back to you? You must be able to answer these questions to make sure that you will have long-term success.

(1) Invest in retaining your customers. Remember, a store is bound by geographic constraints. Retaining customers is essential in this business. You must provide customers with a great experience to keep them coming back to use you to sell more. Customers are looking for someone who is an expert, who can get them the most value for their goods (even exceeding their expectations) and who gets them their money quickly. You must be able to deliver on all these fronts to keep the locals coming.