Beware. There's a whole lot of "start an e shop and get rich quick" bullshit out there.
https://www.gimletmedia.com/reply-all/117-the-worlds-most-ex...
https://www.gimletmedia.com/reply-all/117-the-worlds-most-ex...
There were some people a few years ago that managed to sell off a few hundred Hawaiian shirts that were most likely drop shipped from China by using some well targeted FB (and probably Instagram) advertising, and giving the shirts funny names (named after local alcoholic drinks). They were probably making $20 or $30 per shirt.
An interesting take on the Aliexpress game is theive.co [1]. It's basically a curated list of stuff on Aliexpress with referral links. Since I last looked at the website they've apparently launched a product aimed at drop shippers, where you can get market insights. Morally it's murky, but it's clever.
No offense, but this is the kind of thinking that holds back people from succeeding in business. I see it a lot from non-biz engineering types.
There is nothing, nothing “morally wrong” with dropshipping. The main value you provide is discoverability; if the customer finds a product through you that they would not have found otherwise, then you added value. Also, you provide customer service and return policies that the supplier may not. Finally, you also provide value to the supplier by selling their merchandise in channels they are unable or unwilling to reach.
In fact, all that really matters is that the customer made a voluntary decision to purchase a product from you, and was not misinformed about the terms of purchase or shipping.
You are under no obligation to inform the customer of your suppliers. If you disagree morally with that, then feel free to link them to a site where they can buy your product from someone else.
The idea that there is something “wrong” with selling a product for more than you pay for it is ridiculous, at best. That is literally what business has meant since the dawn of civilization.
On the other hand, there are some complaints you can level at the industry. One is that they're exploiting an information asymmetry between the buyer and the seller; buyers as of yet haven't realized just how cheap and available things are on Aliexpress, and the sellers do their best to hide the source of goods. I think this will resolve itself over time as buyers get more savvy.
There are also some questionable practices. "Free, you just pay [$10+] shipping" seems aimed at some sort of psychological defect in the part of the human brain that calculates value. And digital marketers often are often rather indifferent to IP rights.
I guess my biggest complaint is that there are an awful lot of online marketers that really just don't seem to care all that much about the customer. They're often selling one-time impulse buys which are priced too low to be worth the trouble to return and they don't expect a repeat customer, ever. They've never even seen the products they're selling. I guess I want a little more value-add from my vendors - I've gone back to buying things offline where I can.
(I'm sure the article author is in a very different category of seller, which is heartwarming!)
I used to work for a company that was intending on selling all their user data to third parties (anonymised, of course) as an extra revenue stream. It definitely made me uncomfortable, my boss fully intended to sell as much of the data as legally possible. It was one of the reasons I left the company, especially considering the nature of the data we held.
Now, back to dropshipping. Falsely representing your product as "normally $80, now free if you just pay $10 for shipping" like in the linked podcast is false advertising. It's also probably illegal, you can't put product costs into shipping costs. It's a pump and dump scam. It's like the classic fake watch scam run on street corners all over the world, except you're now wheeling and dealing on the internet instead.
Selling a bunch of drop shipped Hawaiian shirts by using clever marketing, that's fine. The shop I mentioned made no misrepresentations, they didn't claim they were bespoke shirts made in some little village on a Pacific Island. They didn't claim that they were offering a massive discount.
But if you claimed that you were some bespoke Hawaiian shirt manufacturer who's just started up, and you're giving away shirts if you just pay shipping and tag your mates in the post. That's sort of sketchy isn't it? You can see the moral difference here? Maybe you buy some likes and followers on Facebook or Instagram to make you look more legitimate. Put a couple of stock photos of your "employees" in some remote village in the Solomon Islands. Maybe claim that your shirts are ethically sourced. Are we getting into morally wrong territory here?
In this case you're entering the supply chain of a product (cut fabric), which end customers cannot do for themselves and wholesalers cannot scale.
Wayfair is a 9.7B company, that dropships. They found a way to make it profitable.
I do have to disagree on this. This is them trying to increase the "social proof", proof that you are making a solid choice in buying this item. Nike doesnt need to do this because everybody knows nike, and feels that they are good shoes worth their money.
Showing proof of other purchases increases that proof, and you are more inclined to buy it. Of course this all assumes legit "soAndSo bought it too" messages
And this is why I would never trust such messages. It's way too easy to fake it, and too much work to make it real, and there's no way for customers to verify it's real anyway.