What is a virtual office?
A virtual office is simply a mailbox and phone number, paid for and maintained by a company so they can claim a local presence in their advertising and marketing. Virtual offices don’t have space, staff or products at the location they list; they’re just a virtual online presence with mail and phone calls forwarded to their head office.
Are virtual offices a bad sign?
In a time when working virtually has become much more common, having a virtual office for mail and online listings is commonplace. But not all virtual offices are about making life easier; some are about giving a company the appearance of being local, or appearing much larger than it actually is.
Although virtual offices can be useful, especially for people who run businesses from a private residence, they can also be used to create a fake presence for a business, and trick people into thinking the business is local.
Virtual offices may also use reception services, mail forwarding or call forwarding to create the impression of a local presence, despite being headquartered in a different city, or even a different country.
Some of the things virtual offices are used for include:
- Google Map listings
- Yellow Pages listings
- Online directories
Signs you’re dealing with a virtual office, not a real local company
- Google maps. With Google street view, it’s easy to see the physical location of a business and whether they have a storefront. If the location is shared with other businesses, it may well be a rented virtual office, not a real business location.
- Down to the details. Do their listed business details on their website match the address on their advertising?
- Empty offices. If you visit the office location, are there real staff available to help, or is there a different business located at the address.
- The details don’t match. Despite the local listing, the company’s website and ABN details may list their main office in a different city or state.
- There are many other signs you may not be dealing with a legitimate company, such as forcing you to sign too quickly, never meeting with you in person, or not sending a qualified electrician to check the property, including switchboard, before the installation.
Risks of purchasing through a virtual office
Dealing with a solar company’s virtual office poses a range of risks, both in the short term and for your solar system’s longevity.
- They don’t have a local reputation to protect. Virtual offices can cost as little as $20 per month, and are primarily used in paid advertising such as Google adwords. This means it’s very easy for the company to move its sales efforts to a different location if there are too many complaints.
- They use sub-contractors. Instead of hiring and training their own installers, many virtual companies work on a sales model, selling solar systems but paying low quality third party installers to do the work.
- They don’t last. Companies with a rapid growth, high sales model, often operate on a high risk business model. Many of these companies also intentionally close after reaching a certain sales target, avoiding debts and warranties. This business model is known as a phoenix company. According to Consumer Action’s Sunny Side Up Report (2019), over 650,000 Australians have been left without solar warranties due to the shut down of over 700 of these types of solar companies since 2011.
If you suspect you’re dealing with a virtual office or a sales company without real employees, the best thing you can do is ask more questions and do your due diligence in researching them. Don’t sign anything under pressure, and check the company’s good and bad reviews.