5000 Cell Phone USB Flash Drives Scammed!

Firstly....before you read this email let me state a few things:

1) This story is absolutely TRUE!

2) The distributor in this story will not be named nor will their company BUT remember this company is a major national distributor of promotional products and the distributor has been in the business for over 20 YEARS! It is not some "ma and pa embroidery" shop who just got stung...

3) The company in question HAD THEIR OWN person on the ground in China.

4) I am putting out this story so you can send it to your clients who think they can do it better or cheaper than you and I can......we need to make sure they understand the consequences.....

5) If you want to forward this to a client or friend...Just hit the big M button on the bottom of this email or simply copy the link http://usbcustomflash.blogspot.com/2011/12/this-is-project-we-did-for-distributor_8910.html   into the email and send it along....

THE TRUE STORY

In early 2011 I was asked to quote on a custom piece (shown above) . Our price on the 5000 2 GB's was second lowest but was 53 cents above the lowest bid.

I stated that I thought they might be getting a faked or scammed flash drive as we had gone in at a very low margin. They were not aware of scammed memory so I sent this link to explain

 

See this ezine article to explain masking http://ezinearticles.com/?What-Is-a-Masked-USB-Flash-Drive?&id=6550235

 

5 months went by and to be honest I forgot all about it......

Then I got a call from the distributor....(Once again..please understand,.....I really like this guy, he is one of those pro's that make up what I think is the top 20% of our business...a good guy in other words)...he said..

"Remember that custom job we quoted on...?"......I nodded and let him explain what happened

"We bought  5000 of these drives at 2 GB (2 GB is what they paid for) ....the 20 preproduction samples were flawless and tested to be Samsung 2 GB chips.....we approved......we sent all of the money as we felt safe as we had our guy on the ground in China looking out for us........however when the 5000 arrived they all had 128MB chips inside the housing instead of the 2 GB......the 128's were masked with resizing software to try and fool us into think they were 2 GB but when the client did a preload.....all of the info disappeared!

 

To make a long story short....

1) The end user refused the product and sent all 5000 back to the distributor.

2) The distributors options were to start all over or reimburse the order to their client.

3) Their other option (which is how I became involved is they kept the housing (it was great) but had to buy ANOTHER 5000 memory components (shown below)

4) They then took all 5000 flash drives apart, throwing out the 128MB chip that was of no value (as it had software on it) and reglued in the new ones from us.

5) The cost for the 2 GB memory components from us at the time was $5 each...or an additional $25,000 plus the labor to pull them apart and reglue them in, plus the original cost of the job....(oh yeah...I forgot to add the manufacturer in China disappeared as well after getting paid)...The distributor did not get their money back from China ...any of it!

The moral of the story should be obvious........so no need to preach.....But I do think this is a valuable tool for you to send to customers who are thinking of "going direct to China on anything"...We all do what we do because we are professionals......