I would never believe that anybody would send a dead watch, that would be just plain stupidity. I do prefer someone like TTK who handpicks watches though. Just because a watch "runs" doesn't mean it "works". TTK runs his watches for a period of time, so you know its not going to lose 20 minutes a day (not sure what his acceptable deviation is however). Also, you know that you are not going to receive the wrong watch by mistake.
I really believe that over the past half year the quality of our dealers has gotten better. The long standing vets like TTK have picked it up a bit, and new additions like Ruby, Razorfish, and Sash have givin us more options.
What I would like to see however is the distribution to the customer be handled by distributors in the U.S., Canada, Europe, etc., with people like TTK supplying them. Having to ship individual pieces around the globe does not seem to me to be the best way to do things, and I believe customers would be more comfortable purchasing watches without customs issues. Also, this would open up other methods of payment (CC, cash) and get rid of PP or WU fees.