How to Pay Your Suppliers
I love simple questions, which is why I love how so many people ask me how they can pay their product suppliers, because it really is so simple!
Essentially, there are two ways you can pay a supplier: Through safe options, or non-safe options.
Safe options offer you some form of protection when dealing with suppliers, whereas non-safe options do not, so if something goes wrong, you will be in trouble!
You may be limited to what your supplier will accept, but generally speaking, only dodgy suppliers won’t accept any form of safe payment. If you do come across such a supplier, I strongly recommend you reconsider using them - or at least do a little research on them to find out whether they are the real deal.
To avoid getting stuck by using a non-safe payment option, you need to know which are the safe methods, and which are the not-so safe options. Because I have learnt the lesson about using safe payment options the hard way (and would prefer that you didn’t) I am going to let you in on which ones are proven to be either good, bad, or downright ugly.
Safe Options
- PayPal. It’s the king of all payment methods, with millions of members all over the world. The reason it’s so popular is because of the level of security it offers the buyer (which sellers love because it means more sales as potential buyers feel more confident in buying from them). What makes it safe: If you have a problem with the items you purchased (say they don’t show up, or they are broken) you can inform PayPal and have the transaction reversed.
- Credit card purchases. These are easy and convenient, and like PayPal, are safe because paying with a credit card gives you a window of opportunity to cancel the payment and file a chargeback with your card provider.
- MoneyBookers. It’s accepted by eBay, so it’s got to be good! MoneyBookers works in a similar way to PayPal – you enter your credit card information at the checkout and the supplier gets their money sent to their MoneyBookers account. I like it because it’s authorized and regulated by the Financial Services Authority and also because you do not have to reveal any sensitive financial information.
Unsafe Options
- Western Union. This option is unsafe because it can’t be traced or refunded. It offers buyers no protection whatsoever, and I highly discourage you from using it. Never be fooled by suppliers who say something along the lines of “please pay me through Western Union, I can give you a discount because I don’t have to pay PayPal fees” or “my PayPal account is down for a few days, please pay by Western Transfer so that I can send your shipment immediately”.
- MoneyGram. This operates on a similar system as Western Union which makes it another unsafe option to use. MoneyGram has even admitted themselves that using its service to transfer money to unknown sellers is unsafe. This was originally set up for people to transfer money to friends or family, and therefore does not have processes in place to offer any kind of protection.