eCommerce 101: How to avoid scams

Huge discounts offered by Evaly, a trending eCommerce corporation attracted a lot of people. Some people see these discounts as a new business prospect. They invested more and more. But there was one constraint.
According to customer reviews, it took a long time to get those products. In the meantime, Bangladesh Bank published a report. The whole discounting thing took a new turn. People’s trust in Evaly was starting to fade away.
Then, the Jamuna group came up with a 1000 crore taka investment plan. It even initially invested 200 crore taka. And the investment made by Jamuna brings back some sort of trust again.

Cool story, right? We all hope that the company flourishes. Maybe, one day people write books about them if they fight back against all odds to become the market leader. But again, the future is uncertain.

Speaking of the uncertain future, another big news broke the internet of Bangladesh eCommerce users. This time, it’s not about Evaly. It’s about E-orange, another eCommerce site in Bangladesh. But this time it’s a bit worrisome since the two major owners of E-orange were sent to jail. Earlier on, the company replaced owners. And it created tensions in the market. By the way, they too offered huge discounts and were late to deliver the products, reportedly.

The accusation against E-orange was pretty big. The amount relating to the accusations was eleven thousand and one hundred crores taka. If it turned out to be true, many customers would be financially broken. It would also affect their mental well-being. And, it would create a negative impact on the market. We hope, people will be able to get their money back.

Again, even if the accusations against E-orange were false, we need to do something. Money embezzlement is a fact. It happened earlier. One month ago CEO of Neerapod, another eCommerce site was arrested with the allegations of money embezzlement. And maybe, we all know about Destiny-2000. So, it’s not something new. These incidents ruin the potentiality of a new startup. It discourages people to invest when a new company with so much potentiality requires investment.

But what can we do as a customer? What is supposed to be our responsibility? How can we avoid such situations? Let’s talk about it then!

Grasp all lose all

I don’t want to be harsh here. But I have to say few words relating to the huge discounts. I got the point of some companies giving enormous discounts to capture the market cap. Yeah, it does make sense. At first, it may seem they are losing money. But most probably, they can yield profits by gaining a huge market share.

But what about others? Some of them may enter the market to do scams. Maybe, these scammers use people’s materialistic viewpoint. And some people may fall into their traps.

Again, I have no intention of insulting anyone or making obscure assumptions about any legal business structure. Rather, I would like to say that we have to be careful when we pay a huge amount for a product in advance. If we are talking about the business, the shortcut way isn’t sustainable growth. You have to think about the leverage. Considering leverage is essential.

Knowledge is power

When you are going to invest, please research. Read all of the reviews. Don’t rely fully on the company’s page reviews. They may hire paid reviewers who may not have ever used or ordered the products.

Learn about the investment. If you are a businessman, take a class on how accounting, finance works. It will be effective. If you don’t have that much time, please ask your nerd friend who knows a lot about finance and accounting.

When you’re a businessman, you have to rationalize the profits. If you think it’s not possible to get that much profit, then don’t invest it. If you think no one can’t yield the profit, maybe the company you’re investing in maybe probably a scammer. Read a lot. When you know these incidents can happen, you will be cautious.

Anybody can be a brand ambassadors 

Sometimes, these so-called famous people don’t know what they are preaching. Sometimes they don’t even care. It’s happening all over the world. The product they are preaching, may not be used by them. Don’t invest blindly in a company just because your favorite “stars” or “idols” are associated with the company.

Again consider the above points I mentioned earlier. Please rationalize when you do invest. It’s not just applicable when you invest, rationality is important in every step of your business.

And, for consumers, whatever your favorite “stars” say, don’t take their words for granted. I am not saying that you should distrust them. What I am trying to say is that you should do your own research. It’s your money. You are doing the hard work. Don’t let anyone take it from you.

Sometimes friends or family members may not act rationally

It’s obvious. Our family members, co-workers, friends influence our daily life decisions. When it comes to investment, it does the same thing. When we see our friends gaining lucrative profit from a project we have never heard of, some of us sometimes try to invest money in the same project without having adequate knowledge.

Sometimes we are too lazy to research the project. And boom, one day we find out that the company is gone. Should we blame our friends? Even if they pursue us to invest there, we can do nothing about it. When the money is gone, it’s gone.

Blaming friends or family members doesn’t matter. And, it never works. It just ruins a relationship. So to avoid these situations, we should do our own research. When we are going to invest, we need to take our time.

Find the financial statement of the company. Take a look at how many assets they own against their liabilities. If you can’t understand, find a business graduate who can read for you.

Then, think critically about whether the reputation of the company is fragile. Find out for how many years the company is doing business in the industry. If they maintain the reputation for a long time, most probably, they may not have any intention to scam you.