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Photo by rupixen.com on Unsplash

Dropshipping: What is it and how can you avoid falling for what is essentially an online scam?

Dropshipping is an order fulfilment system that sellers use to profit off consumers without needing to handle or store stock. Instead, sellers will use a wholesale platform or manufacturer to fill orders, jacking up prices and profiting as the middleman. This means that dropshippers are essentially scamming consumers, selling items for multiple times their listed prices. So how do you recognize dropshippers and avoid falling into their traps? First, it is important to understand exactly what dropshippers are doing.

Dropshipping essentially allows people to insert themselves as middlemen on platforms such as Amazon and eBay. Hustlers will list items on these websites while sidestepping the traditional reselling model of purchasing goods in bulk, storing them in a warehouse, and then distributing them to consumers as their merchandise is purchased. Instead, items are posted from cheap retailers, particularly Chinese companies such as AliExpress or Alibaba for incredibly marked-up prices. Then, when someone buys the item, the dropshipper will use the address given to send the item directly from the cheaper site, pocketing the difference as profit. Essentially, the dropshippers are ordering goods for other people while inflating prices.

The pandemic has made many people aware of the benefits of working at home, which has led to a rise in starting online businesses among those trying to keep the lifestyle as offices reopen. Dropshipping has become a popular side-hustle, a response to a post-quarantine environment as well as the higher demand for online shopping created by COVID.

It has also become popular due to a lack of investment needed to start. Since there is no need to buy stock, there is minimal seed capital; the doors are open to pretty much anyone with a computer and some time to commit to the endeavor.

What makes dropshipping so enticing for many is the ability for sellers to automate the process. Using programs such as Ecomdash, these hustlers are essentially able to make money in their sleep, with the program taking the consumer’s information and purchasing the corresponding product from the merchandiser that is acting as their supplier, all without the seller actually having to be part of the process.

For an example of dropshipping in action, take this shower caddy. On Amazon, the caddy goes for $29.99. However, the same caddy goes for $5.08 on Alibaba. Most likely, this listing is a dropshipper who uses Alibaba as their stock, selling this shower caddy at multiple times the price they buy it for.

Amazon allows anyone to sell on their website for a small monthly fee, which makes it a popular platform for dropshippers. This means that unfortunately, many of the products being sold on Amazon are actually being dropshipped to consumers by third party sellers who make their profit off playing middleman. So, if you’ve ever bought an Amazon product and been disappointed with the quality or shipping time, chances are you have fallen into a dropshipping trap.

Dropshipping does not end with retailing websites such as Amazon. Suprisingly, many online stores use this model, as not having to directly handle stock makes the business easy to manage and not very risky, as there is very little overhead. Many small companies that you may see selling trendy clothing advertised on platforms such as Instagram are run entirely through dropshipping.

Take the company Streetgram for example. They sell clothing that is originally listed on Alibaba as their own product, even recycling the photos from the other site. For example, this rhinestone hoodie, listed on their site for $45, is originally listed for $5.98 on Alibaba. Streetgram is one example out of the hundreds of companies that make incredible profits off people who are simply unaware of this sneaky business model. So how do you make sure you do not fall victim to dropshippers’ ploys? Here are a few tips to keep in mind when online shopping.

When shopping on Amazon, a key giveaway of a dropshipping listing is the lack of Prime shipping status. As the companies that dropshippers use are commonly based in China, shipping usually takes a long time, meaning that sellers are unable to offer Prime shipping as an option. While dropshippers can use various merchandisers, and therefore this is not a foolproof method, this tip can save you from having to wait for an item to be shipped to you from China and protect you from buying items that are originally priced much lower.

One more thorough way to ensure you are not overpaying for items is to simply check the commonly used dropshipping companies like Alibaba and Aliexpress for whatever you are looking for. Oftentimes, you can find the same item listed for the real cost of manufacture and skip out on padding a middleman’s pockets.

Frequently, dropshippers will use the same picture as the original listing, so another way to check for a dropshipping scam is to reverse image search the listing you are looking at. If you find that the image pulls up multiple websites as a result, it is most likely an item that is being dropshipped.

Overall, one telltale sign to look for in listings is images that are poor quality, as many sellers will simply screenshot the original listing to post. Additionally, as these listings’ images are coming from another source that the seller does not control, clothing items will often be photographed on different models or look like they come from an Instagram post.

Sometimes there will be no picture of the clothing item itself, but rather a compilation of images of the item being worn. This is because listings on Alibaba and AliExpress are commonly displayed this way, and dropshippers recycle these exact images as their own. To really feel like a sleuth, you can also check a website for the use of the same models. A website selling original items pays models to sport their goods, and often will use the same models for different listings. A company that is dropshipping, rather, will be recycling images from various listings and therefore will not have the same models across their website.

As we enter an age where online shopping plays a bigger and bigger role in people’s lives, it is important to be an informed consumer to avoid getting scammed. Many people are trying to make a quick buck off you, and if you are not careful, you may end up spending way more on an item than you need to. So, when shopping, even on sites that feel as trustworthy as Amazon, it is important to check for the fingerprints of a dropshipper.

Writer Profile

Kaitlyn Anderson

Cornell University
Communication, Biology and Society

Kaitlyn Anderson is a student at Cornell University. She loves to explore the intersection between science and humanitarian studies. She lives in New Hampshire where she enjoys hiking and surfing.

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