The other day Jade and I were driving to Indianapolis when we saw a large sign that said “For Sale by Owner.”
I laughed and commented that I sure hope it is the owner who is selling the property. I wouldn’t want to buy from someone who doesn’t own it – if I was going to do that, I would buy the Brooklyn Bridge.
I thought I was being smart.
A friend is in the process of buying a home. When he received the contract, he found the following statement: “The terms and conditions of this contract, which apply to Seller, are Subject To the Seller becoming owner of the subject property. . . If the Seller does not become owner, this contract is null and void.”
What is really amazing to me is that the contract comes from a Real Estate company and was submitted through a third party realtor. So, “For Sale by Owner” is actually a big deal.
I started thinking about the concept of selling what you do not own. I’m not talking about consignment – that is a whole different ballgame. With consignment, the owner is actually selling the product with the selling representative receiving a commission.
Instead, I am talking about fraud and deceit. Not a day goes by where I don’t read about someone being “taken” by a Craig’s List advertisement or by promises to do work but fail to show once payments are made – or even the now infamous Nigerian Prince.
These are scams. These are frauds.
Unfortunately, these are a normal part of the world we live in.
But then, I realized that selling what you do not own has become a way of life in today’s world – Sometimes with honesty – sometimes not.
For instance, I think almost everyone has bought something from Amazon. And, if not, has at least heard about Amazon, which is perhaps the leading online seller of anything and everything a person could need – want – or just have the urge to buy.
Amazon has a massive warehouse in Hebron, Kentucky – a warehouse that ships thousands of products in thousands of packages every day. There can be no doubt but that if it is listed on Amazon, sold by Amazon, and shipped by Amazon, and owned by Amazon.
In other words: “For Sale by Owner.”
However, much of what is listed on Amazon, sold by Amazon, is neither shipped by Amazon nor owned by Amazon. In fact, much of what is sold on Amazon and thousands of other sites is not owned by the seller, nor is consigned to the seller.
And it is all legal.
For instance, if you want to buy an alternator for your 1958 John Deere tractor, you might go online and search first for a part number for your alternator and then search for possible availability of that number.
Much of the time, Google will aim you to Amazon where you will find one or two or twenty different companies selling the alternator you need. You will find prices that range from low to reasonable to ridiculous.
Most of the time you will find prices that differentiate by pennies.
What you won’t find, is who actually owns the alternator being offered for sale. Often, it is the manufacturer who has the unit in its inventory. When you put the alternator in your “basket” you assume the seller has the unit available.
After all, he said he has “only four left” while in reality he has no inventory of his own – not the alternator you want – and not any of the perhaps thousands of alternators he is advertising on Amazon.
Instead, when you push the “buy” button, he places an order to the manufacturer with the request to “drop ship – no invoice.” That way, the buyer never knows the seller did not own the unit at the time of the sale – and the buyer receives his alternator in a day or two.
This process isn’t a scam or a fraud – It is a business profile that is being embraced by thousands, of entrepreneurs and businesses with more selling to online sellers than selling online themselves. With this profile, the seller does own the item being sold, if for only a minute or two, before it is shipped, but not before it is sold.
So, how do we differentiate between those who sell what they do not own, but have a business relationship with a supplier that ensures delivery of products that are sold versus those who have no intent to deliver what they sell?
Actually, the answer is fairly easy – buy from a reputable Internet site such as Amazon. Amazon and hundreds of other sites have strict requirements that must be met before a business is allowed to sell on that site. These sites continually monitor customer evaluations to determine if the business is meeting the requirements on an everyday basis. And, these sites remove any business that does not comply with their requirements.
While these safeguards do not ensure that everything you buy through their site will be what you expect, or even that you will receive what you order, you have a better chance of getting exactly what you order.
Even if the product is not “For Sale by Owner.”
– Mike Cooney