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Comment by threeseed | Hacker News Reader

There are many people who make their livelihood by drop-shipping products from China.

Since the products are identical the only way of succeeding is being the store that the customer sees first. Some invest heavily into SEO/Paid Ads. Others try and harm competition like the DCMA requests and leaving negative reviews.

But one thing I've seen first hand is that the competition is brutal. Everyone just steals website content, images, marketing material etc from the competitors. Whatever they can do to get ahead.

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I’m sympathetic to content creators generally but I find it hard to sympathize with drop-shippers - it seems like such a silly, useless and unnecessary business. Perhaps there’s an analogy to High Frequency Trading though - they “provide liquidity at the margin” for crappy goods?

Drop-shipping DID have a purpose back in the 80-00s when you couldn't buy the stuff one off from platforms like AliExpress, but most dropshippers aren't doing it like the drop-shippers of yore did it.

Starting the "back in my day rant": In the past, you would actually negotiate with your manufacturers about how many items you would purchase over the year, and that would determine the discount you got on their SRP. You could then mark it up, but for the most part you didn't, and your profit was your discount.

Now days, though, everyone is just plugging directly into AliExpress/Temu/Wish, and marking it up. They are just a lazy low/no-value middle-person between me and cheap knockoffs from China. The "clever" ones are worse, because you might not even realize you are buying a knockoff. The packaging, images, titles, and descriptions will be 1:1 with the real product.

While this is true of people only doing drop shipping, my company does a lot of drop shopping and JIT delivery. We have our own inventory, but we also have contracts with vendors that are not available to consumers.

We are also better equipped to guarantee supply chain integrity and have much better customer service. Getting a warranty on a part can be difficult, but we have dedicated people who work with vendors every day. All the customer has to do is stick a shipping label on box.

Philosophically, how do drop-shippers compare to, say, furniture shops that only have showpieces on display. And when you pick a piece, they pass along the order to the manufacturer to deliver.

Or for that matter, car-dealerships operate on the same model.

They're not operating a showroom.

It would be more analogous to hft if

1. Platforms could detect they're sellng the same piece of good and automatically sort by price

2. There's no material difference between vendors other than pricing and offering, e.g. in customer service

3. vicious anti-competitive behaviour like those illustrated here are heavily regulated

When all these are true the vendors that survive would be ones that offer the best price among those who offer goods of the same level of crappiness.

You raise a interesting point that is lost on a lot of anti wall street folks. Imagine if consumer products had Reg NMS.

No matter where you go and buy a fungible consumer product (SKU), the retailer was regulated by law to give you the best price available anywhere in the world at that exact microsecond.

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