Wednesday 20 Sep 2017

Why Gold Supplier Fraud is a Big Deal

The Gold Supplier scandal was such a big deal for Alibaba.com because it damaged the very integrity of the site.

Alibaba.com makes money by selling Gold Memberships to suppliers.  Suppliers are willing to pay this annual fee because the site attracts potential buyers from around the world.  And these potential buyers are willing to use Alibaba.com because they feel they can find quality and trustworthy suppliers on the site.

The Gold Supplier designation is supposed to be a sign that a supplier is trustworthy.  After all, Gold Suppliers have to be authenticated and verified by an independent third party as a real company, and so would appear to be more trustworthy than free members.

But if the Gold Supplier program is corrupt – and even scammers can easily obtain a Gold Supplier membership – then perhaps there’s really no way to distinguish legitimate suppliers from fraudulent suppliers on Alibaba.com without first risking one’s money.  This obviously makes the site a lot less appealing to potential buyers.  It also significantly degrades the value of a Gold Supplier membership – and this directly threatens Alibaba.com’s bottom line.

That’s why the Gold Supplier scandal was such a big deal for Alibaba.com and forced the company to make some major changes, including firing its CEO.  However, the root causes of the problem remain.  So even today, there’s no guarantee an Alibaba.com Gold Supplier will be trustworthy.  And there’s certainly no guarantee he’ll provide you quality products.

 

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