7 Ways to Get Scammed on Alibaba : Under30CEO 7 Ways to Get Scammed on Alibaba : Under30CEO
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7 Tips to Using Alibaba Correctly So You Don’t Get Scammed

| December 12, 2011 | 74 Comments

Money_TrapWhere can you get products to resell on eBay and make a 200% profit? Where can you find a supplier without having to worry about having physical store location? Alibaba, the world’s largest B2B online trading marketplace for small businesses, is your answer. Finding a market for products you want to sell is only half the battle. You have to make sure that you have a reliable, price friendly, supplier of goods in the first place. Although Alibaba is a fantastic way to find a wholesaler, distributor, or manufacturer, its message boards are filled with buyers who got scammed by the suppliers it featured. Alibaba is a trading platform which brings sellers and resellers together, meaning there will always be scammers trying to rip buyers off, despite Alibaba’s best efforts.

Here are the top 7 ways to get scammed by suppliers on Alibaba…

Buy something brand name

iPods, Nike shoes, Samsung digital cameras are all available for purchase from Alibaba. However, your “purchase” will result either in you getting a counterfeit product or not getting any product at all. Your only real chance of re-selling these products is if you buy these at a retail store and sell them to someone on the street for the “convenience” factor. Aside from that, forget about profiting from brand name goods bought from Alibaba.

Manufacturers like Samsung, Apple, Sony, etc, already have strict arrangements with select manufacturers, distributors, and wholesalers. Even if one of those was on Alibaba, you’d need to buy a minimum order quantity (MOQ) in the million dollar range.

Buy Sub-Par Quality Electronics

There are a lot of Gold Suppliers on Alibaba who sell everything from music players to car navigation systems. Before making a significant order from one supplier, buy small orders of their product and test them out for a significant period of time. You don’t want to buy $5,000 worth of LCD screens and realize, 6 months after you sell them to your customers, that half of them don’t work.

The more “simple” a product is (like a pillow), the less chance you have of it breaking down. Even if a manufacturer claims that they have a warranty, if 15% of your purchased products fail (a very real possibility), no warranty can compensate for the opportunity cost of you buying working products. Furthermore, if your products are quickly breaking down, your manufacturer may simply refuse to honor your warranty.

Purchase a Supplier’s Minimum Order Quantity (MOQ) Immediately

If you buy in increasing increments, rather than going all out with your first order, you will figure out whether the products are the quality you expect. Furthermore, you will realize whether selling them is a good idea in the first place.

Although many suppliers tell you that they have a MOQ in their advertised product pages, most will work with you on smaller orders in order to build your trust. Make a small order and keep on increasing the order size at intervals that work for you.

Believing that Gold Suppliers Are Scam Free

A Time article noted that 1% of Gold Suppliers engaged in fraudulent transactions for the year 2009. This isn’t to say that Gold Suppliers don’t come with an extra level of trust. You should simply be aware that they are not perfect. Alibaba makes thousands of dollars off of those who apply for its gold supplier membership.  A crafty scammer can pose as a supplier to Alibaba, sign up for its Gold Supplier membership, and scam for a lot more money than the cost of the membership.

Getting Samples

Some scammers can be generous and send a sample of their product, maybe for free or at an increased unit price. For example, they may send you a brand new iPhone, trying to make you believe that they have a whole stock of them. Or, they may send you quality office furniture before sending you thousands of dollars worth of junk when you place your big order. To avoid being duped, simply don’t buy brand name electronics and gradually increase the size of your orders rather than going from a one piece $100 sample order to a ten piece $1,000 order.

Not Doing Your Due Diligence

Check the company’s website. How long has it been around? Check the Alibaba forums. Are there any scams relating to the particular company or products they are selling?

Talk to your supplier on the phone and/or on Skype; maybe even visit them in China if your order size warrants the trip. Keep in mind, however, that no amount of investigation can completely eliminate scams or your not being happy with an order.

Not Using Escrow Service

Rather than paying the supplier of goods, you pay Alibaba, which will hold the money until you receive the order. If you are not happy with what you received or did not receive anything at all, Alibaba will hold the funds and refund the money back.

Nickolay Lamm protects consumers from online scams at InventHelp Scam Watch and invention company scams at InventHelp Invention Scams.

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  • http://www.ProForeclosureList.com DBarrett26

    We got scammed by a Gold Star seller once a few years back. We sent them a money order for a little over $500 and that was the last we heard of them. Live and Learn. We also had many good experiences on the site as well…So it really is just a matter of playing it safe and not getting greedy/careless.

  • http://twitter.com/HarrisRoberts Harris Roberts

    If it’s too good to be true…it probably is.  I was scammed last year but didn’t lose any money due to escrow.  

  • Noscams

    I’ve tried to order products several times from Alibaba. Every single one, EVERY one, has been a scam or an attempt at a scam. Out of 16 separate attempt to order products, not a single one ever resulted in something salable being delivered. Although I almost did sell the box of rocks I received one time. I recommend that you keep your money as far away from this site as possible. Alibaba exists for only one reason: to part us silly westerners from our money. If you want to order products from China for import and resale, there is only ONE way to do it that will not result in you getting scammed: go there in person. Check out their facilities. DO NOT SKIMP on this. Occasionally you will see offers to go check out a place for you so you do not have to travel to China yourself. These are also 9/10 times scams, where the person will take your money and either never talk to you again or give you false “all clear”.

  • Mstina

     So the scammers didnt take your money……  what exactly is escrow?

  • Beuler42

    Although I havent exactly encountered a scam yet, but customs is another story, ive had items bound up in customs, returned or destroyed… at that point find out just what the supplier is all about. Usually doors shut, your problem not ours. I find customs more an issue than suppliers :O

  • Beuler42

    Although I havent exactly encountered a scam yet, but customs is another story, ive had items bound up in customs, returned or destroyed… at that point find out just what the supplier is all about. Usually doors shut, your problem not ours. I find customs more an issue than suppliers :O

  • Strongfuturenow

    Watch for Stradalli roadbikes or other brand name bikes at Alibaba its posible that you can find this bikes at alibaba but i tell you some doesnt buy from this guy paypal email ba9yurri@126.com 
    he ask for western union or monety transfer dont do that i allways use pay pal doesnt trust i nthat escrow bullshit of alibaba paypal refund you the money guaranteed 
    ba9yurri has other sites on the web other than alibaba yardsell, craiglist and other similar sites like dhgate and made in china this guy is a scammer once you pay never answer your emails and doesnt have any phone number

  • anti scam

    there is a guy trying to sell iphone5 and i caught him in his lie before i did something i regret. thank you guys. here is his b.s. claim. dont buy anything from him he’s a lier http://www.alibaba.com/product-tp/133930488/Wholesale_for_App_e_iPhons_5.html

  • West Indies, t&T

    I got scammed over $10,000usd from on on this website.they are a bunch of crooks.

  • http://www.facebook.com/denise.junk Denise Junk

    I think most of the items being auctioned on Tophatter Auctions are from Alibaba , huge selection of generic tablets being drop shipped and they sell like crazy to unsuspecting buyers who actually believe the quoted “retail value” . (Speaking from experience as a duped buyer).

    Also a hot market for knock off European style (panda beads) stamped with a .925 stamp that can not possibly be real silver .

    I did order some jewelry making supplies and got some quality items , well packaged and as described but thank goodness for escrow .

  • http://www.facebook.com/profile.php?id=641984960 Elizabeth Caffey

    There are fraudulent art reproductions being sold there too I discovered one of my paintings being reproduced by a seller, I am sure it is a print on canvas, They just stole a photo of it from my website and cut the signature off,

  • http://twitter.com/bukavu mwanabk

    did you use escrow?
    it looks like the best way to protect yourself against not receiving goods is through escrow. although escrow will hold your money for unnecessary longer.

  • Wish I could trust

    I see a lot of folks saying that Escrow is good and a lot of other folks saying that it’s just yet another scam since they don’t control the Escrow money fairly. There is something I would love to buy that costs $3,000 on Alibaba and several times that in the US. But so far it all still seems to risky. I would love to see an impartial survey of the Escrow system. But right now, I’ll probably go for a US company and pay vastly more since I don’t trust Alibaba enough. The only reason to not have a trust system is because they don’t care to promote businesses that are trustworthy.

  • http://www.facebook.com/fred.onnen Fred Onnen

    I would like to make a purchase from a Chinese Company found on Alibaba. I have been in touch with them directly and gotten prices etc. They gave me a paypal a/c to make payment in order to start production of the goods I’m after but paypal will not let me make the payment as they feel it is an unsafe transaction. How on earth do we know which Chinese (or other) manufacturers are the real deal. I am now not sure about going ahead with my order but cannot find anything in Australia in this line.
    How can I make certain i am not being scammed?

  • Srsly?

    “… there will always be scammers trying to rip buyers off, despite Alibaba’s best efforts.”
    As far as I know Alibaba aren’t aggressively trying to catch scammers; “best efforts” – HA!

  • Pingback: Progress Thread: Import/Brand product

  • patricio leonard

    watt do you meanwith god times
    watt did you bout and from ho and how can I pike the god wanes out.

  • robert

    what do you want to buy because i am buyer as well and i have a company that i use to buy from … email on rt0479@yahoo.com

  • ricardo

    The name of the site shoud be Alibaba and the 40,000 thieves…….

  • Bob

    Always pay with PayPal and always use a credit card. Ultimate protection. 99% of sellers who don’t accept PayPal even when you offer to pay the 4% fee can’t be trusted.

    When I request a price, I get a copy and pasted piece of text that most of the time doesn’t make any sense whatsover. It’s quite hard to find a good supplier on Alibaba. If you want to make a large purchase, it’s better to just go to China yourself and talk to the manufacturers directly, Alibaba sellers are just the middleman.

  • Jason

    This is a great article and I agree with most of it. I have been using Alibaba successfully for over 3 years and have not been scammed. I have developed a business in the US that has been growing each year.

    If you are trying to build a legitimate business and looking for suppliers, Alibaba is a great resource. Use common sense and if it is “too good to be true” then walk away.

  • chad

    Jason,’

    can you email me at hondocrm@yahoo.com

    thanks

  • Ignominious

    It’s not always easy to determine “too good to be true” as some products have massive mark ups as they go thru all the middlemen. I deal in automotive parts and the mark up can be astounding at times.
    I am in the process of arranging to buy thru Alibaba to see if the parts are legitimate. I’m hopeful but worried too.

  • John L

    I have bought a few cycling jerseys from different vendors on alibaba without any issues. Not sure I want to pull the trigger on a bike tho.

  • Kus

    i got something form aliexpress order not posted so i was refunded ,if you push order received it is only then funds go to the seller . i brought a few thinks from aliexpress ,deal extreme ,and dhgate and never had a problem .

  • Kus

    another thing is they are not meant to get money up front why would you ppl send them money up front i use a pre paid visa card it is not till i get my goods and hit received that then they get there money .

  • mark

    I Was also Looking at a automotive part supplier in Alibaba myself I found one I REALLY LIKED, I check the web site and all there info and seem to be pretty legit. I’m looking just to specialize in older car parts. The only thing is a mim order of a 20ft container. That makes me a little worried.

  • Ignominious

    That’s a lot to lose! I would suggest asking them to do a smaller order so you can check the quality. Shipment by express is expensive but fast. I got my parts, from order to delivery in one week.
    I made a small order ( $265) and am fairly happy except the parts look like they were poorly handled before shipment with minor dings and scratches. The irritating thing is that I went with the highest of the 3 quotes. One was $80 cheaper but they made me nervous. My next order will be thru them though because they are by far the larger company and that’s a big price difference which affects how much I can mark them up to resell. Hopefully I’ll get parts that are in better condition.

  • Ignominious

    What I did was order a small quantity to make sure they were genuine and to see the quality. Better to pay a higher price for a small quantity than get a whole lot of crap at a low price!

  • Ignominious

    Alibaba takes the payment and holds it until you get the goods for inspection. When you give the ok they give the money to the seller. There is a percentage fee but it’s better than getting screwed. My only order so far was thru Paypal with a credit card. I’ll be using the Escrow soon and will also use a credit card to get a another layer of protection.
    I would recommend NEVER SENDING MONEY DIRECTLY (Western Union) TO A SELLER and ALWAYS USE A REAL CREDIT CARD, not your bank account number or a debit card.

  • Kallias

    Don’t forget to ask about repair and return policies. Its no good if the item arrives then dies in 3 months. The I chose a supplier with loads of above average feedback and the item arrived OK but now they wont reply to my emails. Its a small lesson for me but something more to worry about if you are spending large amounts!

  • Carmen G

    hey robert the email you have presented is that for a company you buy for or not?? I am looking to buy a cellphone from a reliable company and I am not fully sure on alibaba yet and I just got scammed… ??

  • Helen

    BEIJING MEDICAL BEAUTY COMMERCE CO., LTD.

    David Wang, who represents this company manufactures the
    worst equipment. I ordered 2 Elight and 1 laser machine. All the three had
    several problems. They say they give you warranty, but they don’t. They charge
    you for the products. They do it cunningly. The say do not pay for the item but
    pay for the shipping and they charge 3 times the shipping saying the shipping
    cost is high. Inspite of that, they still send you worst quality items and it’s
    obvious they do not work.

    I personally have been their victim. I have ordered
    accessories and they still do not work.

    I regret buying from them and their quality is very poor.

  • Helen

    BEIJING MEDICAL BEAUTY COMMERCE CO., LTD.

    David Wang, who represents this company manufactures the
    worst equipment. I ordered 2 elight and 1 laser machine. All the three had
    several problems. They say they give you warranty, but they don’t. They charge
    you for the products. They do it cunningly. The say do not pay for the item but
    pay for the shipping and they charge 3 times the shipping saying the shipping
    cost is high. Inspite of that, they still send you worst quality items and it’s
    obvious they do not work.

    I personally have been their victim. I have ordered
    accessories and they still do not work.

    I regret buying from them and their quality is very poor.

  • keri

    If you ordered SEVERAL times why did you keep going back if they were scams ??

  • rachid

    Hello Guys

    this is : Order No. 60056938200198 has been closed ( 24Aout 2013). I bought a product but the seller cancelled the order and they told me you will receive your money to your debit card/credit card but ..

    7 days Passed, I Haven’t get my money ,Please i want refund money Asap

    Reply me when you can

    All Regards

    Buyer

  • N.S.A CONSULTANT

    Write me an email, tony_obrianllp@consultant.com . We will help you in recovering the funds. Thanks

  • Cindy Folviks

    please share me ur sucess story and the way you have been handling it aLL ALONE??? i will greatly appreciate! write me an email please, sherwolf_62@outlook.com. thanks. Cindy

  • Erwinar

    CHEATING ON ALIBABA DISPUTE CENTER

    I think maybe alibaba cheating our dispute. I had a case where I am required to reply within 3 days or the case will be canceled by the administrator. But there is no limit to the administrator that do not take care of the case that I asked. example Case Number: 412830501 till date there is no handling of the administrator. Last answer of the administrator is dated 20/08/2013. I even can not find any chance to contact the Aliexpress administrator to say: What’s going on with my claim!? Actually I can not contact Ali if the status is not “Waiting for my response”. Ali administrators but sometimes seems to forget there is a claim not finished.

    I would not care, even if it takes a year I still would take care of this case and will not close it, before the case was settled. I also suspect that this is a collaboration between alibaba and the seller to gain time and cheat the buyers.

  • John Duggins

    Can you be more specific – what were you trying to buy? I don’t want this to happen to me.

  • Egads!

    Good grief…WHAT is that? Is it English!? Have you ever been arrested for murdering a language before?

  • Egads!

    Perhaps because it is difficult to draw a statistical conclusion based on a small sample size. It’s not as if the person were trying to determine if cutting off a finger is painful and ended up with 10 bloody stumps. Do you usually quit something after your first failure?

  • Junaid Muhammad Syed

    :)

  • Exodus Leviticus

    someone offer me Toshiba L800-S22B price is $105 should i buy this laptop?. i just want to ask question because i dont want to be scammed for second time

  • kjmix

    heyy have you gotten your refund? the same thing just happened to me :(

  • Erich Berger

    We are a reputable B2B manufacturer of plastic blow-molded products based in North Carolina, that has been in business for over 50 years. I’ve just come on board as the Marketing Director for a new line of B2C products, and I am trying to find a wholesaler. I thought perhaps I could find one on Alibaba, but I am thinking maybe wholesale our initial product there myself? Not getting a lot of “warm and fuzzies” about Alibaba in general from this discussion, but I can certainly prove who we are and that we are legit…is it worth the effort?

  • Christina Jones

    Hello Jason, I am very interested in knowing how you have had such great success with Alibaba as I am starting my own business and have been looking into using some suppliers from Alibaba and AliExpress. After seeing all the negative reviews, I have truly been scared. Please contact me via email at bobbysavoy1@gmail.com. thank you!

  • Simonsaid

    Shite i just wasted a whole lot of my money on chinese air.
    Dont do anything with these small dicks.

  • sam

    am currently planning to buy a laptop on alibaba,but most sellers dont want to use escrow thay want to transact using western union. please should i still go aahead and pay.

  • Bertolini

    Well, my last experience was with ADA LIU seller,
    Shenzhen Tiande Electronics Co., Ltd.. Everything was OK until the phone stopped working properly after almost 1 month of using. When you see the bottom “return policy” http://www.aliexpress.com/snapshot/275554324.html you can see that there shouldn’t be any problem with claim. It’s a problem, seller doesn’t reply to e-mails, messages via aliexpresswmessage centre, I also wrote a message directy aliexpress. NOBODY CARES! NO ANSWERS! Buy goods in Aliexpress… but when it brokes you do absolutely nothing, no warranty, zero protection… I CAN’T RECOMEND.
    At the end I send link to BAD SHOP/SELLER where I was cheated http://www.aliexpress.com/store/203238 Don’t care 95% possitive feedback, I gave 5* as well…. After delivery worked all well and now I can’t change feedback. Really good shopping system :)

  • Abhishek

    never go elsewhere except Escrow.

  • Alex

    Thank you for the article. I’ve been ordering from AliExpress for over 3 years now, and countless times I opened dispute and was refunded, Well, at least that’s what it said on the order details. I used to trust Aliexpress and I was so freaking busy back then that I never checked my credit card invoices to see if the refunds were really there. I had sorf of loosen control of my invoices. But a couple of months ago that changed and I started checking my invoices, not only recent ones but the old ones too. And for my surprise, there was never a refund there. That’s worth over U$2000.00 of refunds for products I never received, and they never refunded me once. I don’t know what to do, It’s not easy to contact the website. I looked on the internet to see if there was some step I was skipping to get my money back, read the website’s policies, but nothing about that. Don’t know what to do, honestly. Do you guys have any suggestion? I’ll appreciate your help.

  • Steve Martin

    LOL

  • Jerry James Villarva

    Does anyone know about Guangzhou Huiyin Science and Technology Ltd. in alibaba.com?? Is this company trustworthy?? Thanks a lot for your help.

  • ROSE

    I am buying some accessories from koda lee.. IS IT SAFE ?

  • monicale

    Now, I really prefer to buy everything from Thailand now, this is where I buy my stuff, for $20 “Personal Shopper Bangkok” (Google it I don’t have the exact link) will go shopping for you (anything), cheap and good, I would love to find the same cheap service in Paris or New York !!!

  • simon

    furniture and all purpose 12 volt batteries

  • Ariel

    Can you also email me at arielpund2@gmail.com? I’m interested in getting parts from alibaba to expand our business a great bit. After all the terrible reviews, I’d like to know which suppliers you are using. Thanks.

  • Triambak Sahai

    I am planning to buy around 50 hard drives( WD my passport 1 tb ). I searched on alibaba and found a few sellers from thailand. Is it worth buying from one? I don’t want to get scammed at all kindly help. Email me at triambaksahai@rocketmail.com. Thanks

  • kikiasumi

    that’s not always true. Paypal guarantees you buyer protection but only if the seller’s paypal account has money in their account to withdraw from.

    If they are a scammer with a paypal account that is unverified, and you make your purchase and they receive the money and withdraw whatever it is immediately. Paypal has no where to take money from to give you your refund (no money in the account, no bank account to take money from) so you won’t receive one. And there’s no way to trace the seller through paypal if it’s an unverified account.

    This is why you should only pay by credit card.

  • Gerard

    Here is one company on Alibaba to stay away from.

    Henan Zhen
    Bang Textile Company LTD

    Add:Song Shan
    Bei Lu 93 Hao ,Zhengzhou City,Henan Province,China

    Tel:86-371-67971928

    Fax:86-371-67971928

    Phone:8615838081948

    If you want to do business, do it only with Escrow services via Alibaba’s website.

  • 4000minus

    robert hoover is a scamm artist be alerted!!!!!!

  • Adrian Gerreyn

    BEWARE I just purchased $1000 worth of HD & USB sticks 8gig 2gig from them below via Alibaba. 8 HD apparenly lost in mail due to Chinese new year, Usb sticks packed in box so bad just thrown in some broken scratched, some asking for reformatting with only a 4mb capacity. The others so slow in data transfer they are about 10 years old compatible with win vista…I am a victim
    Beware of the company below….id love to know if there was anyway I could get a refund or some compensation.

    Lance Lin

    Website:www.sinotech-electronic.com

    Email:willz@sinotech-electronic.com

    TP:13172472362

    Skype:sinotechelectronic

    Office Address:

    D 808 Hua Qiang Garden, Fu Hong Road, Futian District,Shenzhen, China

    Factory address:Floor2,Block 10,Xiaxue Village,Bantian,Buji,

    Shenzhen,Guangdong China(mainland)518031

  • Lc

    I got scammed , but got my money back from paypal ,

  • John Smith

    Just TRY to use the escrow service. The sellers don’t want to pay the fees (take less money) so they still pretend they don’t know how to get money through Alibaba.

  • Barron

    im closer than most of all of you. im an American living in phillippines and I STILL wouldn’t risk it. if you think you’re hearing bad things where you are you should be closer to the source! the series get more and more frequent…. these people DO NOT share our values, morals or views of right or wrong… from the drop you are MISMATCHED and if ( and only if ) you come out unscathed its likely ONLY because youre being fished in for a bigger payoff…

  • Rob

    Want to take a trip to Shenzhen? This scumbag is trying to hook me as I type this.

  • Joel A Bosch

    A Seller Company scammed our company of over $3200 USD. This entrusting that they were a verified gold business, after asking for quotes from different suppliers, they all came back and said they would only take wire of western union. If Alibaba allows these practices to continue on their platform they are part of the problem. All businesses should be verified and they should only be allowed to sell via Alibaba escrow or be banned. Alibaba fails customers, fails sellers by allowing wild wild west on there platform. Alibaba should stop all these practices and engage in responsible behavior or they will have a non trust worthy company and platform. STAY AWAY

  • Dion

    In english, this translates “What do you mean with Gold star seller? What did you do about and from who and how can I pick the [dodgy] gold ones out?
    Stay of the fucking English pages if you can’t speak it mate.

  • FarmerJohn

    Switch from Alibaba.com to Aliexpress.com – same company, slightly different platform, buyer protection with money back guarantee. The chance to get scammed is greatly reduced.

    If a seller on ANY site insists on wire transfer (T/T), Western Union, or any other method of payment that cannot be reversed then don’t buy from them.

    I have spent the past 3 days on Alibaba.com trying to find a seller that will agree to escrow. I finally found one, asked about the escrow, was told “No”, and 1 minute later their page listed T/T, Western Union, Money Gram as methods of payments – escrow removed. Scammers are everywhere on there.

    I am glad I switched over to Aliexpress.com, at least they have a buyer protection system on there.

  • FarmerJohn

    After spending way too much time looking for reputable, trustworthy suppliers I have the solution for me. I’m looking into starting a business in China. There’s a lot of hoops to jump through for China, Hong Kong not so much.

    I figure if it’s too difficult to determine who is legitimate and who isn’t then if I set up a Chinese sales company to sell the products that I’m interested in, then I won’t have a problem with reliability and honesty.

    It may cost me money to do this, but it’s a lot less than what I stand to lose from dodgy sellers and the hassles with refund claims, etc.. It’ll end up being a tax write-off partially so it’s not a big deal, most important is the lack of problems I should have as I’ll be selling to myself.

    As a bonus I may get other sales and actually have the operation be profitable.

    Having access to all the manufacturers will be a big bonus as I’ll be able to give myself deep discounts, but still sell to the general public at markup the same as everyone else.

    Yep, I can see this working for me. Good for me!! hehe

  • ken

    I have bought 20 things on aliexpress.com a sister,smaller website and am very pleased with it so far great prices and ok knock off products for self use

  • hatecheaters

    Robert Hoover ?s a seller on alibaba he use victor bunor awana when you make your payment, he is a lier he took the money and he didnt send products!!!!!!!!!!!!!!!!!