In the good old days, no business deal was complete without a handshake. You knew the people you were dealing with, visited their companies, and achieved a level of confidence based on the knowledge that the business partner was willing to look you in the eye and the contract was enforceable in court.
When you perform a transaction on the Internet, not only do you not get to have a face to face meeting, you may not even know in what country the customer or business associate resides, and you may not have any legal recourse on a breached contract if the contract is made with someone outside your country's borders.
To provide a certain level of protection, a number of insurance and B2B risk management programs are being launched, and you can look for more of this in the future.
In the meantime, there are several steps that can be taken to help apply good business acumen to an Internet B2B transaction:
- Start out slowly
- Do business with partners you know
- Seek references when doing business with new partners
- Do business with members of Netmarketplaces that are only open to preapproved members
- Research the potential business partners through independent third-party sources
- Send a trusted representative to meet the potential business partner
- Beware of an offer that sounds too good to be true