Escrow is uses a 3rd party who is independent of the buyer and seller to ensure that the product and money changes hand and thereby not shortchanging both parties. Usually, in business, Escrow services are generally done by lawyers. It is helpful when both parties are new to dealing with each other and the dollar value is somewhat high which the parties cannot just brush off as business loss if things go sour. A typical transaction would be start off with the buyer sending the money to the escrow company who would hold the money in trust. Once it certifies that it received the money, the seller can ship the product. Once the buyer received the product and is happy, the money is released from the escrow company to the seller. Then everyone is happy. If the buyer is not happy with it during the inspection period, he can return the product and the escrow will return the money to the buyer and no one is at the disadvantage apart from the shipping and escrow fees.