Knowing what you need in a musical instrument can be a very difficult thing, especially for parents and beginners who know little about these often quite complicated items.

My partner and her (grown) children, between them, teach piano, flute, clarinet, saxophone and trumpet and some time back we decided to purchase some of the cheaper brand instruments you see on ebay with a veiw to supplying affordable instruments to students.
We bought examples of nearly all the "brands" available and were surprised to find that the many brands were made up from only 2 or 3 different makes, merely having different names stamped on them.
We have since found that these are all made by Chinese or Indian makers and that any back yard seller can order a quantity of cheap instruments with their own brand stamped on them!

Unfortunately, we also found the quality of these instruments unacceptably low and had to abandon our plans of supplying them to students.
Students find them difficult to play and often blame their own inexperience for the instrument's shortcomings.
Teachers have difficulty knowing whether a problem is because of the instrument or the student's technique and can't give definitive guidance.

If  we, as informed buyers get stuck with substandard items what chance do you have as a beginner? This is a big problem for students and teachers alike.

So what should you watch out for?

1. Brands you don't see in music shops - internet sellers will often claim their item sells for some high price in shops. This is usually not so - ring around a few music shops and ask about the brand. You'll probably not find it anywhere. Note that shops will sometimes have their own brand of these instruments as well - but not usually the one the internet seller has and usually unique to that shop (or chain).
2. Extravagant claims of professional quality - Professionals don't need to be told it's professional quality and in any case professional instruments rarely suit beginner's needs.
3. Teacher or Band Director approved - another common calim  that should ring alarms. Experienced teachers and real band directors detest these instruments
4. "Fair sounding", "admirable" or "larruping" "musical tool of excellence" - obviously poor translations of some small overseas seller (you may never even see this instrument after sending your money)
5. With a very few exceptions, serious manufacturers of quality instruments do not make a huge range of coloured instruments.
6. Sellers offering replacement only warranties - these guys can't do repairs or get parts and often make their money from the repeated high delivery costs of resending items. Some will go so far as to say they repair under warranty but only really ever send replacements (and more often deny claims all together). We had one very prominent ebay seller say "what did we expect for what we paid for it"
7. Check for negative feedback - It means much more than positive feedback. Most people get their shiny new instrument, it's delivered quickly, so they leave positive feedback. The problems show up a short time later.
8. Ring and ask your local repairer about the brand you are considering - an often overlooked resource.

But it's not all bad.

The appearance of these cheap brands has driven the price of beter quality instruments down quite considerably. Where you were looking at $1000 or more for a quality brand name a few years ago you will now pick one up around 6 or $700 now if you shop around (flutes,clarinets,trumpets that is - saxes are dearer). Brands like Armstrong, Artley, Yamaha, Buffet, Conn and Selmer have come down dramatically in price in recent years - makes one wonder how much they were fleecing us for before!!

The same thing has happened with used instruments - prices have dived for good brands, but you will almost certainly need to spend money on any used instrument - check out servicing and repair costs before you buy.

Hope this helps you guys. It's become a real mine field!