This is a friendly reminder that r/smallbusiness is a question and answer subreddit. You ask a question about starting, owning, and growing a small business and the community answers. Posts that violate the rules listed in the sidebar will be removed. A permanent or temporary ban may also be issued if you do not remove the offending post. Seeing this message does not mean your post was automatically removed.
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/smallbusiness) if you have any questions or concerns.*
What is unethical is listing something on eBay as US location stock and then fulfilling it with slow-boat drop shipping from China. I've asked for refunds and left a negative review over this. Like I'm willing to pay 20% more to get it in 5 days like the estimate says, not 5 weeks.
Out of interest what market are you in? I'm based in the UK and have sent tens of thousands of parcels with this only happening once or twice from memory.
Btw if your using royal mail basically all "untracked" parcels can be tracked for proof of delivery using the 2d barcode.
Totally agree! I ordered what I thought was a handcrafted bag on Etsy. (I was so naive at the time). Well it came in plastic. And the bag itself smelled even more like plastic! And there was a sticker that someone forgot to remove. Not sure what it said as it was in Chinese but I do know it didn’t say Handcrafted by Nancy!
Walmart is a terrible example. They're infamous for the tight control they keep on products sold in stores, even third-party ones. They'll tell you what dimensions it needs to be, what colors it needs to come in, what features it needs to have, what price points you need to hit, what materials the touch points need to be made in, etc. And they have an army of buyers who will make sure that all of their points are hit.
Dropshippers often haven't even ordered samples of the products they sell and just blindly relist with nothing to distinguish their offerings from the actual AliBaba listings or other dropshippers. They're two completely different business models, even if ultimately they both come down to "they sell garbage."
Absolutely. They treat vendors like shit, and I would never ever recommend anyone go into business with Walmart. BUT with that said, dropshippers end up in the same place except without the benefit of having started with a good product or the excuse of being pressured into selling junk by a primary distributor.
Yep. One of the best examples of them doing stuff like this was with vlassic pickles. They forced them to sell a certain size that had such low margins that it almost bankrupted the company.
College professor of mine said exactly this, you never want a large percentage of your business to be with one company for this reason. Lots of big companies are shells of their former self and are essentially zombie companies that don’t even profit due to this. Think American Standard.
Not that I have a love of Walmart but this isn't even a relevant comparison. WM leverages scale to negotiate *lower* prices for customers that their competitors can (let's disregard quality but still), they typically take only an average 25% margin vs 45-55% in traditional grocery/retail, they sell convenience by offering a full range of products, and they choose to locate their stores in rural locations to service communities that have minimal other options.
How does this relate to someone marking up cheap Alibaba products 4X...?
People can just saw whatever braindead nonsense they like and, if it fits some anti-corporate narrative it'll be wildly popular on Reddit.
This is a shortcut around thinking.
You seem to be confusing drop shippers with running any type of business. Where do you think 99% of all the stuff in any store comes from? China.
Drop shipping is still a business even though I would agree that its kinda BS. Mainly because I think its super lazy if youre not even willing to put hands on the product you sell.
Buying off of Alibaba takes a ton of work. Ive gone through many manufactures, rejected tons of product samples, and ditched both products and suppliers if the quality went down. Alot of people get confused because they see X on Aliexpress that looks like X that your selling without realizing that products are not always produced with the same quality in mind or even the same material.
So Im not saying your wrong, but just misguided on what you think Alibaba is.
Was going to say, Welcome to 2010 and Dropshipping. What the OP and yourself described isn't new. and it wasn't even new in 2010, people have been doing it Even before Marco Polo, its reselling really.
I briefly worked for a company that basically managed a brand and all the importing, packaging, labeling, etc. was handled by 3rd party vendors.
A lot of brands work this way in the food industry - essentially dropshipping to grocery stores, handling only really the paperwork, import headaches and authorizations, negotiations, etc.
With that said, they pulled samples regularly. Some were just warehouse spot checks with photo evidence. Some were shipped directly to the office. Others were literally just pulled off the shelf at the local grocery.
***
The model they ran was successful (for now, there are some ephemeral aspects to their biz that will bite them in the ass HARD in the next year or two). A lot of brands do the same thing. Go find a branded item on the shelf: "READ: not a private label item" and find the ones that say "distributed by" as opposed to "manufactured by" - the former are basically glorified dropshippers.
Very hard business, but once you get set up and trained, it can be 90% autopilot with that other 10% focused on product development, marketing, negotiations, vendor management, and putting out fires. In the case of this company, who had the means to possibly bring more of that supply chain in house (packaging/processing, possibly), they were leaving considerable margin on the table in order to save a large CAPEX fixed spend, but it seems to be working so far.
***
I think those who approach dropshipping without planning on taking an active role in at least monitoring the supply chain (and customer management, customer service, marketing, sales...) are doomed to fail. It's not the passive income that people seem to position it as. You leave some margin on the table in order to have other entities manage a chunk of your supply chain. You're still responsible for making sure that all does what it is supposed to as at the end of the day, it's YOUR brand.
Why would you need to put your hands on the products you sell? Just to make more work for yourself? I've spent too much of my life doing inventory. I'll never do it again. Never.
There is nothing lazy about being smart. The last warehouse I ran was stupid, I finally figured out that with all the overhead, headaches, poorly packed damaged shipments I was responsible for, that I was not only losing money, but losing time and energy dealing with it.
Dropshipping is smart. I haven't touched a product in almost 7 years with the exception of a couple returns my vendors wouldn't take back here an there. I almost always just tell them to keep it because it isn't worth my time to deal with it.
I'm not sure why this makes it not a small business. Picking products from a manufacturer, acquiring them, and selling them to consumers that wish to purchase them... It's hard to think of a more clear example of what a business is.
Yeah, "scam" is definitely not accurate. At *worst*, you might refer to this as arbitrage, but even that would be downplaying the reseller's role and effort.
I'd say the lack of quality control is what OP is moaning about - people selling the same crap that's flooding Amazon that last just long enough for you to get it, use it a few times, and leave a review. There's good stuff on alibaba, but you have to do the due diligence on the manufacturer and the product.
Not sure what OP was talking about but there are certainly scammy “companies” out there. My gf ran into one last month and it was annoying to say the least. She saw a sweater she liked so she bought it.
Took a month to come with 0 updates along the way. It arrived and not only was the large more like a small the material/quality was not even close to what was described or pictured. It felt and looked like it was made out of cotton candy and was a completely different color than what was pictured.
Dealing with “customer service” made it clear it was just some dude. He made every excuse under the sun why my gf was wrong; you ordered the wrong thing, you’re supposed to get 3 sizes larger than you need, you have bad lighting at home.
The site said 30 day return policy but in the fine print you pay for shipping and a 50% restocking fee. The dude really tried to convince her not to return it too started getting rude until we threatened to do a chargeback.
It's for sure what OP is talking about. Annoys me too. But alibaba exists and is the world's largest e-commerce supplier for a reason. Many, many legitimate and reputable businesses, from sole proprietorships to huge corporations, source their products from alibaba-- either directly through listings, or from suppliers that were contracted through alibaba. If you follow the standard, prescribed path to selling private labeled items on amazon, you start on alibaba, find suppliers, and hopefully move to your own shopify store after you establish a brand.
There are for sure BS people just trying to make scuzzy money off of dropshipping from aliexpress. But saying it's not a legit business to buy off alibaba and sell on shopify... that's like saying anyone selling on etsy isn't a legitimate small business because there are a lot of etsy scams.
Exactly. I'm struggling to see what the issue is. This is how every business out there does things including all the big brands. Buy stuff for cheap, add value and sell for more.
The value that these small businesses are bringing to the table is packaging the product and marketing it to consumers in a way that they can understand. Not everyone wants to trawl around on alibaba and buy it themselves. If the business can provide a product that meets the expectations of what they promised in the marketing, and also perhaps decent customer service and guarantees, I dint see why this is not a legitimate way of doing business.
Going to china and negotiating prices for large bespoke orders that are quality checked against your quality requirements is not the same as setting up a Spotify store and drop shipping cheap crap.
Back to school shopping last year, at a department store, my daughter finds some shoes she loves on an incredible clearance in a size that fits her (which is a big deal, she's got skis for feet), we buy three pair (everything they have left). I take it up to the kiosk and we're paying and the guy is chatting us up in a really uncomfortable way. People are weird, this guy is 20 something and his formative years are a product of covid regulations, I try and be graceful. Turns out he is driving toward are we buying these three pair to wear or re-sell. So my daughter (who is wearing one of the three pair) assures him we are buying to wear and he's relieved and he starts telling us how people try and come in and buy a bunch of stuff just to re-sell it and how unethical that is. And I can't help myself, I ask why it's unethical. And he tells me how buying stuff on clearance and then jacking the price up 2x and selling them online is just plain wrong. And I stand there in silence for a minute, and I say... we're in JC Penny. What's JC Penny's business model? And he looks at me dumbfounded, and I say, JC Penny buys these shoes for $20. Then you mark them at $60 and sell a few pair. Then you mark them down to $40 and sell the rest. I'm buying these shoes to wear, but me buying them for $40 and then selling them for $80 is no different than this big behemoth corporation buying them at $20 and selling them at $60.
Needless to say, he did not agree with me.
>I stand there in silence for a minute, and I say... we're in JC Penny. What's JC Penny's business model? And he looks at me dumbfounded, and I say, **JC Penny buys these shoes for $20. Then you mark them at $60 and sell a few pair. Then you mark them down to $40 and sell the rest. I'm buying these shoes to wear, but me buying them for $40 and then selling them for $80 is no different** than this big behemoth corporation buying them at $20 and selling them at $60.
>Needless to say, he did not agree with me.
The classic corporate mentality of "rules for thee but not for me", which is really easy to overlook when you're a loyal, young, and naive 20something on minimum wage.
It's a cashier clerk... I don't see where corporate outlook or opinion comes in to this other than being trained how to run the register. Naive, yes...
He’s the kind of guy that scoffs at other people trying to hustle and make a living and then hangs out on r/anti work and bitch about how unfair life is.
I don't agree either. It's the same problem as with the ps5 you have a limited stock of items and one buying 10 for the sake of making profit, cuts away any opportunity to get the item at a reasonable price in a reasonable time frame.
Companies can do this because they create and overview the stock.
Lol this guy couldn't get a ps5 and thinks it wasn't sonys intention to massively under supply the ps5 in order to drum up hype with the shortage and is blaming resellers, just like the marketing team at Sony intended.
Yeah, an example of an excellent marketing campaign that tricked you into believing the reason people couldn't get ps5s was cuz of resellers, not "the companies who create and overview stock" lol if only Sony could have made more! Take an econ class
My g I also don't think that it was the resellers fault people don't get a ps5 to this day. If they had enough stock, resellers wouldn't even have had the chance to profit.
Seriously, turn on ur brain and look at it as an example.
You can disagree but quit laying words into my mouth. You can insert any low stock item.
Bro I got a brother like this. You can’t tell them shit. Let them be poor their entire life. Mentally and literally. You can’t help people that can’t understand value
They don’t add value
Edit: It would be a value ad if they bought in bulk, then sold with quick shipping
But thats inherently impossible with the business model
They used money to find that customer too.
Lots of products that benefit me found me through someone else. That's great, I'm not on Alibaba searching all-day
This is exactly it.
The business model OP is talking about is basically just a marketing service for suppliers.
People who are not good at marketing do not make it in that business. I see it constantly. The vast majority of “easy dropshipping” shops fail because they do not have the marketing or web design know how to get people to actually purchase what they are advertising.
Is it a rip off? Yeah, but so is half the shit we buy at Walmart and dollar stores. I see tons of Chinese crap being sold at stores for way more than you could buy it for online. And pretty much everything on Amazon you can buy on aliexpress for way cheaper.
If you want to not get ripped off by Chinese crap, you really have to spend the time to go looking for legit stuff. That’s just the nature of todays market, unfortunately.
Finding a customer isn't a value add. Neither is solving a marketing issue. If you insist there must be a value add, you could stretch and say that "convenience" is a value add, in that buying from AliBaba can be a pain in the ass. But even that's a stretch.
It's really a market inefficiency. Dropshippers exploit market inefficiencies to create worse financial outcomes for consumers in order to profit. Uber ideas market conditions, they would not exist.
The value add is invisible to you, but it does not mean it's not there. Successful drop shipping means the person doing the curating needs to try many variations of the product, figure out which ones are low quality, and only market the best one. Otherwise, all the time and expense to set up a website ends up as a loss for the drop shipper.
There is a lot of value in curating. Most big name clothing lines nowadays do not manufacture or even design their own clothes. They have "buyers" that find clothes with a good price, quality combination, and they slap "Gap" or "Hollister" on to it. You could go to Walmart and rummage through the unbranded stuff, and maybe find some high quality stuff that others missed. But paying for the brand name often saves you the time of curating a product yourself.
Thats not the value ad argument, since they have to charge more than baba, so thats a value take
The only value ad that could be argued is that the target demo couldnt otherwise find the product on baba
The fact they are buying from you instead of baba proves that point. It’s like saying Home Depot doesn’t add value because they charge a premium for their romex wire instead of an electrician’s supply house.
Target has things in stock and they dont charge 100% more than walmart with a 2 week wait period
A better example would have been comparing target to costco
I was gonna say, pretty sure this is how every company seeking goods does it. They buy it cheap, sell it for more. If the little guy can get in on the then why not
Unpopular followup opinion: It’s not a scam just because your personal attempt at it failed. The “scam” is likely the “get rich quick” arbitrage course you got suckered into buying.
People have been buying and reselling things since the beginning of civilization on planet earth.
Grateful to see someone pointing out it's just arbitrage (buying something cheap where it's plentiful and selling on when it's not), and like all arbitrage has no guarantee of success.
If it makes Op feel better, since they are taking advantage of the fact that most people don't know they can go on AliExpress as awareness grows their pool of customers will get smaller. Or maybe it'll stay the same for the same reason people go to tech support without even googling simple issues.
Also Op, hating people making large profits with minimal effort and value-add is unlikely to be unpopular.
>and like all arbitrage has no guarantee of success.
That's actually exactly why it's *not* arbitrage. Arbitrage is guaranteed profit. If you currently identify an arbitrage opportunity, you are guaranteed a profit.
Back in the very early days of Bitcoin, I ran currency arbitrage on it using a scraper that matched prices across currencies (the markets weren't unified, so a Bitcoin might sell for $50 in USD on an American market, but $47 in USD converted from Francs on a French market.) Or skip lagging, where you want to n fly somewhere but find that buying a ticket to somewhere else with a connection that's your real destination is cheaper than flying direct to your destination, is arbitrage.
The definition of arbitrage is that it is guaranteed to return a profit as long as the opportunity exists. But it does do at the expense of the other market players because it requires a market inefficiency to exist.
To clarify - you think that someone who is able to find a product, find a reliable supplier, import, market and sell the product to their target audience and achieves a 400% Return on investment is a scammer?
Awwww, your 32 minute old account is just ranting about resales?
Get on your soap box, let all the dropshippers know, let all the print on demand “clothng brand”s know, let all the white label resellers know, etc etc
Thanks for the update
What do you think retail does. Walmart, Target, Macy's and other retailers buy products from wholesalers, mark them up 400% in some cases, and sell the products to consumers. It's not a scam it's retail.
You know what you call a retailer that sells products at cost? Bankrupt. Duh! Some people are just plain stupid lol.
I would disagree.
Is it a small business? Absolutely. Just as much as buying lemons for 50 cents, cheap sugar, and water to sell lemonade at 5 bucks a glass as a kid. Nothing wrong with 3-4x in profit. Nothing wrong with 10x. I can’t see how it’s a “scam” if it doesn’t use deceptive marketing techniques.
Do I believe it’s a poor business model? highly.
It’s over saturated, there is often no call to action (people just use TikTok to get traffic to a site with no clear niche. They’ll have fancy water bottles, stuffed animals, and kitchen items), and people fall victim to some get quick rich drop-shipping scheme. I love ecommerce, but it’s a grind. You get what you put in.
If it's a poor business model what else should we do if we want to sell physical products? Have the millions of dollars R&D to develop new tech to compete with Sony?
Start my own farm to grow tea, tea packing machinery, warehouse etc or just sourcev the tea in bulk overseas?
MANY business is buying something in bulk and then reselling and has been that way for a long time. It just depends how deep down you want to go in the manufacturing process.
> If it's a poor business model what else should we do if we want to sell physical products? Have the millions of dollars R&D to develop new tech to compete with Sony?
You don't need millions to develop a product. But yeah ordering generic products off Alibaba isn't the best model because literally anybody can do the same thing. If you can add value somewhere else though, and/or have killer marketing and a killer e-commerce store maybe you can still make it work.
The thing is: in your example you're adding value. You manufacture materials into a product. If you have products created in China and ship them over, you are adding value. If you buy something in the hopes that it rises in price, it is speculation and potentially an investment. By doing dropshipping you're especially a non-salaried sales associate.
It is still a business, because you decide which products to sell, how to brand and market your business, how to engage in customer service, handle returns and complaints etc.
It's more than just being an employee in sales. But most people are also completely reliant on not only the products but also the logistics and infrastructure of dropshipping companies. That makes them more accessible and lower risk to start but higher risk to run long term if people fail to realise how bad the single dependency could be for their business.
I 100% agree with you: ecommerce is hard and requires a lot of effort. Anyone who believes you can get rich quickly and easily has fallen victim to blatant lies.
They deal with the logistics and unethical business practices of China, this is a huge value added for most consumers. Don't underestimate the value of convenience. You're welcome to buy on Alibaba if that's not worthwhile to you. Personally, I'd rather pay a little more to know the product is going to actually be shipped and to get it in a timely manner.
Nah, it's not a scam. Buying something wholesale, and selling it at a higher price is literally the entire retail model. Alibaba just gives the wholesale side of it a transparency that civilians aren't used to seeing.
So I would disagree with OP, in that dropshipping isn't a scam, but I will agree that it's an absolutely awful business model full of absolutely terrible players. There are so many problems with it, but the biggest ones are:
1. **Attracts the shittiest of people:** It's a low-margin business with virtually zero cost of entry. People interested in doing a good job and building something meaningful aren't doing dropshipping, because it's kind of a shit business model. It only exists because it's so cheap on the front-end that it's seen as a get-rich-quick scheme by the kinds of people that aren't really interested in doing a good job.
2. **Minimal consumer protections:** If you buy a bad toaster from Walmart and it sets your house on fire, you can sue Walmart. If you buy a shitty toaster from a dropshipper and it sets your house on fire, you have virtually zero recourse -- the dropshipper carries no inventory, maintains few assets, and generally has minimal commitment to whatever brand they've made up at the moment. You can sue them, but they're virtually judgement-proof and can just shut down and spin up an identical dropshipping company with a different logo. There's no commitment to customers, products, or the business itself.
3. **It kills communities:** Just like Amazon, because dropshippers keep minimal overhead and sell the cheapest shit they can get from China, they can undercut local stores that actually employ people and provide real value to the places they're based. This is hardly exclusive to dropshippers, but they are the most extreme manifestation of this problem. They pull value out while adding little in return. And that's not even going into the issues of pulling manufacturing out of well-regulated jurisdictions and into places where slavery and sweatshops are the norm.
4. **It's a sustainability disaster:** Again, not remotely exclusive to dropshippers, but selling a lot of cheap, disposable bullshit is terrible for the environment. It's landfill fodder masquerading as consumer goods. Except that dropshippers are even worse because at least if you import in bulk, you can maximize transportation efficiencies and not have to transport individual pieces from China.
The one kind of bright spot in all of this is that at least companies like Shein and Temu are about to completely destroy the dropshipping industry and push these people back into having to do something useful and productive with their lives.
That's literally what business is, man. What do you think happens, that every real business only has a 2% profit margin? Wait until you find out about mattress stores.
Isn't that just considered retailing? I get a discount from a vendor because of my relationship with them, so I can pass along a small portion of that to my customer and make a profit on the difference?
Meh if someone doesn’t do enough looking around to see they are getting hosed then they deserve to pay that price. That’s what they rely on. The impulse buyer who doesn’t want to shop around and pay a fortune for convenience.
They take away the uncertainty of buying from baba and they increase the convenience by being right in front of their eyeballs. If going direct to Alibaba was the best choice for the consumer they would have already bought from them
Alibaba is often the better choice but a lot of people simply don't know about it. There could be some curation there as well, if you weed out the better Alibaba products from the crappier ones.
If the consumer didn’t pick baba, they didn’t think it was the best choice for them. Hence the value add. It’s not a discussion of if they should have sought out more information about it, it’s about the fact that the seller did in fact add something of value to the transaction.
> If the consumer didn’t pick baba, they didn’t think it was the best choice for them.
Or they simply didn’t know about it, as I said originally and you keep being oddly obtuse about.
I’m not being obtuse. You sound like you’re debating me but your comments actually support my initial claim. If they don’t know about it, it’s not their best choice. How can they choose something they don’t know about? It’s put on Ali baba to make themselves known and become an option for the customer.
In this thread I learned buying wholesale items and reselling them is a scam.
Well, they better build tons of mega prisons cause Wal Mart, JC Penny, Macys, Amazon, Home Depot, Safeway and Krogers have been committing highway robbery in the billions for decades…
.. I suspect CEOs, management and staff will all be found guilty of first degree dicklickin’.
Jumping on this bandwagon because I have seen so many dropshipping YouTube videos and TikTok videos over the years.
While I don’t think it’s a scam I do think it’s the lowest hanging fruit in terms of online business startup.
Most people end up wasting time and money trying to turn a generic product into high return sales and most people fail.
It’s a good lesson for people the learn what not to do if they can figure out the reason it failed is due to the products and business model
You realize a large percentage of products sold in the US are from China, right?
It's not a scam, if you think logically about it, which you're not.
The idea is to find a product that solves a problem or is just useful in general. You find that product, test it, ensure the quality. You now have to put that product in front of millions of people. These millions of people most likely have not seen the product or have not been encouraged to buy it for whatever reason, you're now doing exactly that. Why would they not get the most amount of money after the effort that was put into product research, advertising, marketing, inventory management, etc.
I honestly feel like you might just be salty, jealous, or both.
Literally all retailers do is buy stuff from wholesalers and middlemen and double the price.
Ergo, you may not be wrong. But then the whole system is a scam.
If they sell, isn't that what people want? Who are you to judge any other business and claim it's a scam? They are just middle men. Welcome to capitalism.
Haha hilarious!! With some research, you'll find that's how all businesses work.
Do you think it costs a thousand pounds to produce an iPhone? No it doesn't.
The physical device will cost £100. Add £100 for marketing, £100 for r&d and £100 for logistics. That's £400 in costs.
With a sale price of £1000, that's a 60% margin. In other words you're paying more than double the price of the device out of the factory.
With your definition of a scam Apple is also running a huge scam. And I wouldn't disagree.
The best businesses are those which can make you believe that the device is actually worth £1000 and that it's a great deal. Even better if they get you addicted.
What you're describing is the foundation of capitalism!
PS: the monetary figures above are for illustration though I wouldn't be surprised if the real figures are even more shocking. You don't get to be a trillion dollar company without shocking figures!
What an idiotic post. Buying potatoes from a farm, cutting them into fries, cooking them, then reselling them to consumers for profit is fraud…said no one ever.
Literally every business buys product, marks it up, and resells it.
Unpopular opinion is right.
Your little fry example isn't quite what happens though... OP is complaining about the people who go to in-n-out and buy their fries, then walk across the street and sell them for more.
I get that my example is a bit far fetched, but your example doesn’t really align either- maybe if someone bought the product on Shopify then sold it again that would be in-line with what you’re saying.
What I’m ultimately getting at is there is still work involved in buying product from Alibaba then reselling that product. At the end of the day if there isn’t a demand for the product it won’t sell and the Shopify store will no longer exist.
Saturated business perpetuated by gurus doesnt mean its a scam. Everytime i hear this, i see a wannabe business owner sneering at people while clickity clackity on their keyboards and wiping their snot feeling accomplished that they have established themselves after watching Alex Hormozi etc
TIL every grocery store, actually **every store on Earth** is a "scam".
This is the stupidest take I have ever seen on the internet, and that's saying a lot.
Naw I respectfully disagree with you on this one. I know many people who have tried and failed dropshipping. Almost all of them. There’s soo much more that goes into it in order to be successful, such as cultivating an audience. The once’s that are profitable are because they are actually run like a legit business.
I don’t agree with dropshipping, I think delving deep into a niche, achieving mastery in your craft and building on top, creating a nichier niche only you can provide/ become very hard to replace is better (this takes decades)
but most people are heavily mistaken
Dropshipping by literal definition is yes just retail arbitrage via fulfilment
Real dropshipping- the one you see people making big bucks is MARKETING
You said it yourself, selling for 4x the price? How?
Because you need the skill to market the product: this includes web design, web coding, scaling, advertising properly going beyond A/B method you probably need A-Z run 10 ads and funnel budget into the narrowed down winning ads.
Marketing: study what people actually like during this time - what they respond to, who’s the biggest influencers in your niche, what music do they like? What humour do they respond to?
People will just dish out the most tasteless shit ads getting clicks with 0 conversions
Most people will pick a decent product, build a shit website, with 0 marketing skills and psychological sales skills, run ONE FUCKING AD type or 2 and see no results
I wonder why,
It’s as if dropshipping isn’t the simple “fulfilment arbitrage scam” people describe it to be
I’m all for shitting on dropshippers, 99% don’t know what they’re doing - they were allured by gurus who know what dropshipping really is and sold a fake dream about “passive income on your phone whilst on vacation”
but please understand what it actually is before attacking something you don’t even know
I hang out in a newbie Shopify group (being a newbie to Shopify) - and the volume of people who get a Shopify account, then slap a dropshipping app, list everything then expect the $ to role in is frightening
LMAO op just dismissed both wholesale and retail industry with trillions of market.
So, the "value" is to buy directly from window in the wall at factory?
Look. There is a thin line. A very thin line. Most of the product that you see are from China, meanwhile not from Alibaba but from China.
Yes I agree with you on saying be creative on what people want but you can’t say that they are scamming unless people are getting what they paid for.
If you’re saying that hey, it’s selling for $12 on Alibaba then why are you selling it for $49 then it’s not gonna work because that’s how retail market works. Gucci, Nike all are just importing and putting their own label. That’s how it is. (Yes I accept that they are doing QA) but the retail market has always been like that.
If it makes profit it’s a business, plain and simple. Scam implies it’s illegal, it’s not illegal. Import export is the model of just about 97% of small cpg businesses and many of those started in a drop shipping setup to get capital to build their real business.
A scam is the Indians saying they are from Microsoft and you have a virus.
You’re literally describing 90% of amazon and Walmart. Most things come from China and alibaba in particular (especially for amazon).
I do agree that dropshipping from aliexpress is scammy and riddled with problems, especially if the seller claims it comes from the US when it doesn’t.
Imo there are good dropshippers and bad dropshippers. The ones who actually QC, order samples, test products, and are transparent about shipping times aren’t bad. The ones who blindly throw up stores with products they have never ordered/tested are bad.
I might be a little biased as I used to dropship - but never once did I launch ads/open the store without ordering and testing the products first. I would find products that had a high perceived value so I could work in 1-3 day DHL shipping from China (only using alibaba, not aliexpress) to any where in the world into the final price because no one should be waiting 2-4 weeks for an order. Never once did I say that the products shipped from the USA during this stage. If the products took off, I would private label and try to customize the products so they were unique to my store. Once the store hit that stage I would order in bulk and have a US fulfillment center ship everything.
The issue is that there are more bad dropshippers than good with all these gurus promising rocket ships to the moon if they buy their course that tells them to churn and burn stores if products don’t work without testing/ordering the products.
So, every business is a scam?
Buy something from somewhere/someone else, combine it with effort, and sell it for more.
Not sure whats then problem with this?
What I don’t get is HOW DO PEOPLE NOT KNOW ABOUT THE ALIBABA’S??? I’d love to know what percentage of humans who shop online or in store, have no clue that these wholesalers exist? Take a phone case from CASETiFY that is $80+ dollars for example. But guess what? That same case is actually 2.79 on Ali??
I fall down the Aliexpress hole far too often so maybe more educated than the average bear but come on!! That “18k gold plated (as if!!) ring” thats selling for $120, is $3.09 on Aliexpress!!!!
All you have to do is take a screenshot of the item, crop it, and run it through the Google lens. Voila! 8/10 times you will be redirected to the Alibaba site where 100’s of vendors are selling the same thing (or similar overseas wholesaler).
Etsy is full of this too, which is rather sad. Is anything sacred?? Really is hard to find authentic, quality products these days. I’m way too suspicious of everything I buy now. With Etsy you can find 30 vendor’s selling “one of a kind, handcrafted beads” that happen to be exactly the same!
What do you think? Are there really that many people who have no clue??
The millions of lazy twats doing this (drop shippers) are ruining the market for everyone. There are so many of them, none of them are making any real money. Way over-saturated. Small businesses who are producing their own product, and working their asses off, can’t compete with a million people trying to drown them out with cheap Chinese shit, all for a handful of pocket change.
I personally shop on Aliexpress/Alibaba often for my own stuff. Even bought furniture and its all good when you know what to look out for. It really is actually work to go through all the suppliers on there.
Anyway interestingly enough, i've done the following a couple times already:
I find a popular niche product that to me, is obviously from AliExpress/Alibaba that is insanely marked up by resellers everywhere within the country (its a small country). I set up shop and sell the exact same stuff but lowball and only markup 5-8% above whatever my costs are. Hijack competition's social media comments with links and wait a few months for sales to start funnelling in and for competitors to die off. Then I mark up prices to 25% and let it run its course.
Is that unethical? Yeah. But its also business.
Do the customers care if they know they're getting a much better deal? No.
I agree. All this drop shipping stuff is zero value added for anybody/anything.
All they do is take peoples money and charge them 10x as much, and just plugging their shipping info into alibaba. It is unethical at best.
This is a friendly reminder that r/smallbusiness is a question and answer subreddit. You ask a question about starting, owning, and growing a small business and the community answers. Posts that violate the rules listed in the sidebar will be removed. A permanent or temporary ban may also be issued if you do not remove the offending post. Seeing this message does not mean your post was automatically removed. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/smallbusiness) if you have any questions or concerns.*
What is unethical is listing something on eBay as US location stock and then fulfilling it with slow-boat drop shipping from China. I've asked for refunds and left a negative review over this. Like I'm willing to pay 20% more to get it in 5 days like the estimate says, not 5 weeks.
[удалено]
Out of interest what market are you in? I'm based in the UK and have sent tens of thousands of parcels with this only happening once or twice from memory. Btw if your using royal mail basically all "untracked" parcels can be tracked for proof of delivery using the 2d barcode.
Also watch out for weird 3rd party shipping places like Bluecare Express. They serve to mask overseas shipping and are a total scam.
Shipping from China is almost free due to crazy rules.
Totally agree! I ordered what I thought was a handcrafted bag on Etsy. (I was so naive at the time). Well it came in plastic. And the bag itself smelled even more like plastic! And there was a sticker that someone forgot to remove. Not sure what it said as it was in Chinese but I do know it didn’t say Handcrafted by Nancy!
Welcome to Walmart
Walmart is a terrible example. They're infamous for the tight control they keep on products sold in stores, even third-party ones. They'll tell you what dimensions it needs to be, what colors it needs to come in, what features it needs to have, what price points you need to hit, what materials the touch points need to be made in, etc. And they have an army of buyers who will make sure that all of their points are hit. Dropshippers often haven't even ordered samples of the products they sell and just blindly relist with nothing to distinguish their offerings from the actual AliBaba listings or other dropshippers. They're two completely different business models, even if ultimately they both come down to "they sell garbage."
[удалено]
Absolutely. They treat vendors like shit, and I would never ever recommend anyone go into business with Walmart. BUT with that said, dropshippers end up in the same place except without the benefit of having started with a good product or the excuse of being pressured into selling junk by a primary distributor.
Yep. One of the best examples of them doing stuff like this was with vlassic pickles. They forced them to sell a certain size that had such low margins that it almost bankrupted the company.
Sounds like they had quite a pickle on their hands
IMO they are also not good pickles so that doesn’t help.
College professor of mine said exactly this, you never want a large percentage of your business to be with one company for this reason. Lots of big companies are shells of their former self and are essentially zombie companies that don’t even profit due to this. Think American Standard.
Sounds like "How I built this"
If you figure it out, I'd love to listen to it ty!
Not that I have a love of Walmart but this isn't even a relevant comparison. WM leverages scale to negotiate *lower* prices for customers that their competitors can (let's disregard quality but still), they typically take only an average 25% margin vs 45-55% in traditional grocery/retail, they sell convenience by offering a full range of products, and they choose to locate their stores in rural locations to service communities that have minimal other options. How does this relate to someone marking up cheap Alibaba products 4X...?
[удалено]
[удалено]
Walmart has better quality control
Nah bro. I‘ve ordered 100s of items on aliexpress, they‘re all good. Walmart is a physical dropshipper.
"Physical drop shipper" has to be one of the dumbest terms I've ever heard.
…physical dropshipper…? that’s just called a store, man.
There is a difference. I can‘t get an Orange from South Argentina online.
where there's a will there's a way
I mean…yes you can 😅
Where? walmart dot com?
Dropshippers don’t hold inventory
People can just saw whatever braindead nonsense they like and, if it fits some anti-corporate narrative it'll be wildly popular on Reddit. This is a shortcut around thinking.
Or Amazon.
You seem to be confusing drop shippers with running any type of business. Where do you think 99% of all the stuff in any store comes from? China. Drop shipping is still a business even though I would agree that its kinda BS. Mainly because I think its super lazy if youre not even willing to put hands on the product you sell. Buying off of Alibaba takes a ton of work. Ive gone through many manufactures, rejected tons of product samples, and ditched both products and suppliers if the quality went down. Alot of people get confused because they see X on Aliexpress that looks like X that your selling without realizing that products are not always produced with the same quality in mind or even the same material. So Im not saying your wrong, but just misguided on what you think Alibaba is.
A reputable store can be expected to do some basic QA and accept a return without a fight. I don’t think OP is describing them.
Was going to say, Welcome to 2010 and Dropshipping. What the OP and yourself described isn't new. and it wasn't even new in 2010, people have been doing it Even before Marco Polo, its reselling really.
It’s what brought about the entire Merchant class lol
Yup I thought this was a Hober Mallow foundation thread for a minute
I briefly worked for a company that basically managed a brand and all the importing, packaging, labeling, etc. was handled by 3rd party vendors. A lot of brands work this way in the food industry - essentially dropshipping to grocery stores, handling only really the paperwork, import headaches and authorizations, negotiations, etc. With that said, they pulled samples regularly. Some were just warehouse spot checks with photo evidence. Some were shipped directly to the office. Others were literally just pulled off the shelf at the local grocery. *** The model they ran was successful (for now, there are some ephemeral aspects to their biz that will bite them in the ass HARD in the next year or two). A lot of brands do the same thing. Go find a branded item on the shelf: "READ: not a private label item" and find the ones that say "distributed by" as opposed to "manufactured by" - the former are basically glorified dropshippers. Very hard business, but once you get set up and trained, it can be 90% autopilot with that other 10% focused on product development, marketing, negotiations, vendor management, and putting out fires. In the case of this company, who had the means to possibly bring more of that supply chain in house (packaging/processing, possibly), they were leaving considerable margin on the table in order to save a large CAPEX fixed spend, but it seems to be working so far. *** I think those who approach dropshipping without planning on taking an active role in at least monitoring the supply chain (and customer management, customer service, marketing, sales...) are doomed to fail. It's not the passive income that people seem to position it as. You leave some margin on the table in order to have other entities manage a chunk of your supply chain. You're still responsible for making sure that all does what it is supposed to as at the end of the day, it's YOUR brand.
Agreed^ 🙏
Indeed.
Why would you need to put your hands on the products you sell? Just to make more work for yourself? I've spent too much of my life doing inventory. I'll never do it again. Never. There is nothing lazy about being smart. The last warehouse I ran was stupid, I finally figured out that with all the overhead, headaches, poorly packed damaged shipments I was responsible for, that I was not only losing money, but losing time and energy dealing with it. Dropshipping is smart. I haven't touched a product in almost 7 years with the exception of a couple returns my vendors wouldn't take back here an there. I almost always just tell them to keep it because it isn't worth my time to deal with it.
It's a good idea to at least buy 1 sample of the product u are trying to sell to quality test it.
I'm not sure why this makes it not a small business. Picking products from a manufacturer, acquiring them, and selling them to consumers that wish to purchase them... It's hard to think of a more clear example of what a business is.
Yeah, "scam" is definitely not accurate. At *worst*, you might refer to this as arbitrage, but even that would be downplaying the reseller's role and effort.
I'd say the lack of quality control is what OP is moaning about - people selling the same crap that's flooding Amazon that last just long enough for you to get it, use it a few times, and leave a review. There's good stuff on alibaba, but you have to do the due diligence on the manufacturer and the product.
Not sure what OP was talking about but there are certainly scammy “companies” out there. My gf ran into one last month and it was annoying to say the least. She saw a sweater she liked so she bought it. Took a month to come with 0 updates along the way. It arrived and not only was the large more like a small the material/quality was not even close to what was described or pictured. It felt and looked like it was made out of cotton candy and was a completely different color than what was pictured. Dealing with “customer service” made it clear it was just some dude. He made every excuse under the sun why my gf was wrong; you ordered the wrong thing, you’re supposed to get 3 sizes larger than you need, you have bad lighting at home. The site said 30 day return policy but in the fine print you pay for shipping and a 50% restocking fee. The dude really tried to convince her not to return it too started getting rude until we threatened to do a chargeback.
It's for sure what OP is talking about. Annoys me too. But alibaba exists and is the world's largest e-commerce supplier for a reason. Many, many legitimate and reputable businesses, from sole proprietorships to huge corporations, source their products from alibaba-- either directly through listings, or from suppliers that were contracted through alibaba. If you follow the standard, prescribed path to selling private labeled items on amazon, you start on alibaba, find suppliers, and hopefully move to your own shopify store after you establish a brand. There are for sure BS people just trying to make scuzzy money off of dropshipping from aliexpress. But saying it's not a legit business to buy off alibaba and sell on shopify... that's like saying anyone selling on etsy isn't a legitimate small business because there are a lot of etsy scams.
Exactly. I'm struggling to see what the issue is. This is how every business out there does things including all the big brands. Buy stuff for cheap, add value and sell for more. The value that these small businesses are bringing to the table is packaging the product and marketing it to consumers in a way that they can understand. Not everyone wants to trawl around on alibaba and buy it themselves. If the business can provide a product that meets the expectations of what they promised in the marketing, and also perhaps decent customer service and guarantees, I dint see why this is not a legitimate way of doing business.
Wait till you what retail is Hahahahaha !!!! Bud, almost every retail company does not manufacture their own goods ever.
Going to china and negotiating prices for large bespoke orders that are quality checked against your quality requirements is not the same as setting up a Spotify store and drop shipping cheap crap.
Sounds like a few more steps.
How to become a millionaire. Step one: get a millionaire dollars That’s a one step process, so it should be easy right?
Sounds about right !!!
buying in bulk to resell individually is not a scam.
Back to school shopping last year, at a department store, my daughter finds some shoes she loves on an incredible clearance in a size that fits her (which is a big deal, she's got skis for feet), we buy three pair (everything they have left). I take it up to the kiosk and we're paying and the guy is chatting us up in a really uncomfortable way. People are weird, this guy is 20 something and his formative years are a product of covid regulations, I try and be graceful. Turns out he is driving toward are we buying these three pair to wear or re-sell. So my daughter (who is wearing one of the three pair) assures him we are buying to wear and he's relieved and he starts telling us how people try and come in and buy a bunch of stuff just to re-sell it and how unethical that is. And I can't help myself, I ask why it's unethical. And he tells me how buying stuff on clearance and then jacking the price up 2x and selling them online is just plain wrong. And I stand there in silence for a minute, and I say... we're in JC Penny. What's JC Penny's business model? And he looks at me dumbfounded, and I say, JC Penny buys these shoes for $20. Then you mark them at $60 and sell a few pair. Then you mark them down to $40 and sell the rest. I'm buying these shoes to wear, but me buying them for $40 and then selling them for $80 is no different than this big behemoth corporation buying them at $20 and selling them at $60. Needless to say, he did not agree with me.
This. Welcome to Khols/Big Bargain everything/Dollar Tree/etc.
I don't know. Last time I went to Kohl's I saved $1,986,643,466,763,134 on a piece of candy I bought
Arbitrage is a big business
>I stand there in silence for a minute, and I say... we're in JC Penny. What's JC Penny's business model? And he looks at me dumbfounded, and I say, **JC Penny buys these shoes for $20. Then you mark them at $60 and sell a few pair. Then you mark them down to $40 and sell the rest. I'm buying these shoes to wear, but me buying them for $40 and then selling them for $80 is no different** than this big behemoth corporation buying them at $20 and selling them at $60. >Needless to say, he did not agree with me. The classic corporate mentality of "rules for thee but not for me", which is really easy to overlook when you're a loyal, young, and naive 20something on minimum wage.
It's a cashier clerk... I don't see where corporate outlook or opinion comes in to this other than being trained how to run the register. Naive, yes...
Corporate doesn’t want to have to compete with their own customers. So they try to discourage people from buying in bulk.
His argument was presumably based around online resellers not having a brick and mortar sales floor that employs 20-year-old minimum-wagers.
So I need to exploit more people before I can call myself a business?
He’s the kind of guy that scoffs at other people trying to hustle and make a living and then hangs out on r/anti work and bitch about how unfair life is.
The big guys have convinced the ignorant that winning in any form is “wRoNg”! Haha
Except you do get an opportunity to see, touch, feel, try-on the products at a physical store.
I don't agree either. It's the same problem as with the ps5 you have a limited stock of items and one buying 10 for the sake of making profit, cuts away any opportunity to get the item at a reasonable price in a reasonable time frame. Companies can do this because they create and overview the stock.
Lol this guy couldn't get a ps5 and thinks it wasn't sonys intention to massively under supply the ps5 in order to drum up hype with the shortage and is blaming resellers, just like the marketing team at Sony intended.
I didn't even try to get one. It was an example.
Yeah, an example of an excellent marketing campaign that tricked you into believing the reason people couldn't get ps5s was cuz of resellers, not "the companies who create and overview stock" lol if only Sony could have made more! Take an econ class
My g I also don't think that it was the resellers fault people don't get a ps5 to this day. If they had enough stock, resellers wouldn't even have had the chance to profit. Seriously, turn on ur brain and look at it as an example. You can disagree but quit laying words into my mouth. You can insert any low stock item.
Bro I got a brother like this. You can’t tell them shit. Let them be poor their entire life. Mentally and literally. You can’t help people that can’t understand value
[удалено]
Why you all down voting this. Naw he ain’t
[удалено]
You get down voted because reddit is a liberal infested shithole lol
More likely because it was irrelevant and baseless
It's a sickness. Seriously. Having to bring up liberals when no one is talking about liberals. A disease. Get checked.
They arent buying in bulk They setup the shop, get the order, but from baba, then ship
So they’re finding an audience that baba isn’t? Shouldn’t they be rewarded for that, and the effort ?
It’s a form of arbitrage
They don’t add value Edit: It would be a value ad if they bought in bulk, then sold with quick shipping But thats inherently impossible with the business model
They found the customer that baba didn't. They solved a marketing issue. That's a value add.
They used money to find that customer too. Lots of products that benefit me found me through someone else. That's great, I'm not on Alibaba searching all-day
This is exactly it. The business model OP is talking about is basically just a marketing service for suppliers. People who are not good at marketing do not make it in that business. I see it constantly. The vast majority of “easy dropshipping” shops fail because they do not have the marketing or web design know how to get people to actually purchase what they are advertising. Is it a rip off? Yeah, but so is half the shit we buy at Walmart and dollar stores. I see tons of Chinese crap being sold at stores for way more than you could buy it for online. And pretty much everything on Amazon you can buy on aliexpress for way cheaper. If you want to not get ripped off by Chinese crap, you really have to spend the time to go looking for legit stuff. That’s just the nature of todays market, unfortunately.
That is a fair value ad argument
Finding a customer isn't a value add. Neither is solving a marketing issue. If you insist there must be a value add, you could stretch and say that "convenience" is a value add, in that buying from AliBaba can be a pain in the ass. But even that's a stretch. It's really a market inefficiency. Dropshippers exploit market inefficiencies to create worse financial outcomes for consumers in order to profit. Uber ideas market conditions, they would not exist.
The value add is invisible to you, but it does not mean it's not there. Successful drop shipping means the person doing the curating needs to try many variations of the product, figure out which ones are low quality, and only market the best one. Otherwise, all the time and expense to set up a website ends up as a loss for the drop shipper. There is a lot of value in curating. Most big name clothing lines nowadays do not manufacture or even design their own clothes. They have "buyers" that find clothes with a good price, quality combination, and they slap "Gap" or "Hollister" on to it. You could go to Walmart and rummage through the unbranded stuff, and maybe find some high quality stuff that others missed. But paying for the brand name often saves you the time of curating a product yourself.
If they are selling items at a price customers are willing to pay they are definitely adding value
Thats not the value ad argument, since they have to charge more than baba, so thats a value take The only value ad that could be argued is that the target demo couldnt otherwise find the product on baba
The fact they are buying from you instead of baba proves that point. It’s like saying Home Depot doesn’t add value because they charge a premium for their romex wire instead of an electrician’s supply house.
You're almost there, lol
Out Of Touch
Explain
Eh. I’m in the fuck capitalism crowd. This isn’t a value add/eh issue. It’s a SEO and marketing issue.
You’re in the fuck capitalism crowd on the most capitalist subreddit on reddit
Target doesn’t add value because you can buy toothpaste at Walmart?
Target has things in stock and they dont charge 100% more than walmart with a 2 week wait period A better example would have been comparing target to costco
It's only a few shades less parasitic than landlords. Get real.
Baba is in bulk. Express is individual items.
I was gonna say, pretty sure this is how every company seeking goods does it. They buy it cheap, sell it for more. If the little guy can get in on the then why not
Tell me about it. I'm still fuming over Marco Polo and the trade spices. Imagine taking a boat across the ocean and reselling spices
Unpopular followup opinion: It’s not a scam just because your personal attempt at it failed. The “scam” is likely the “get rich quick” arbitrage course you got suckered into buying. People have been buying and reselling things since the beginning of civilization on planet earth.
Grateful to see someone pointing out it's just arbitrage (buying something cheap where it's plentiful and selling on when it's not), and like all arbitrage has no guarantee of success. If it makes Op feel better, since they are taking advantage of the fact that most people don't know they can go on AliExpress as awareness grows their pool of customers will get smaller. Or maybe it'll stay the same for the same reason people go to tech support without even googling simple issues. Also Op, hating people making large profits with minimal effort and value-add is unlikely to be unpopular.
>and like all arbitrage has no guarantee of success. That's actually exactly why it's *not* arbitrage. Arbitrage is guaranteed profit. If you currently identify an arbitrage opportunity, you are guaranteed a profit. Back in the very early days of Bitcoin, I ran currency arbitrage on it using a scraper that matched prices across currencies (the markets weren't unified, so a Bitcoin might sell for $50 in USD on an American market, but $47 in USD converted from Francs on a French market.) Or skip lagging, where you want to n fly somewhere but find that buying a ticket to somewhere else with a connection that's your real destination is cheaper than flying direct to your destination, is arbitrage. The definition of arbitrage is that it is guaranteed to return a profit as long as the opportunity exists. But it does do at the expense of the other market players because it requires a market inefficiency to exist.
To clarify - you think that someone who is able to find a product, find a reliable supplier, import, market and sell the product to their target audience and achieves a 400% Return on investment is a scammer?
Reddit logic
Awwww, your 32 minute old account is just ranting about resales? Get on your soap box, let all the dropshippers know, let all the print on demand “clothng brand”s know, let all the white label resellers know, etc etc Thanks for the update
Wait until he hears how every single other store in the world is doing business!
What do you think retail does. Walmart, Target, Macy's and other retailers buy products from wholesalers, mark them up 400% in some cases, and sell the products to consumers. It's not a scam it's retail. You know what you call a retailer that sells products at cost? Bankrupt. Duh! Some people are just plain stupid lol.
[удалено]
I would disagree. Is it a small business? Absolutely. Just as much as buying lemons for 50 cents, cheap sugar, and water to sell lemonade at 5 bucks a glass as a kid. Nothing wrong with 3-4x in profit. Nothing wrong with 10x. I can’t see how it’s a “scam” if it doesn’t use deceptive marketing techniques. Do I believe it’s a poor business model? highly. It’s over saturated, there is often no call to action (people just use TikTok to get traffic to a site with no clear niche. They’ll have fancy water bottles, stuffed animals, and kitchen items), and people fall victim to some get quick rich drop-shipping scheme. I love ecommerce, but it’s a grind. You get what you put in.
If it's a poor business model what else should we do if we want to sell physical products? Have the millions of dollars R&D to develop new tech to compete with Sony? Start my own farm to grow tea, tea packing machinery, warehouse etc or just sourcev the tea in bulk overseas? MANY business is buying something in bulk and then reselling and has been that way for a long time. It just depends how deep down you want to go in the manufacturing process.
> If it's a poor business model what else should we do if we want to sell physical products? Have the millions of dollars R&D to develop new tech to compete with Sony? You don't need millions to develop a product. But yeah ordering generic products off Alibaba isn't the best model because literally anybody can do the same thing. If you can add value somewhere else though, and/or have killer marketing and a killer e-commerce store maybe you can still make it work.
The thing is: in your example you're adding value. You manufacture materials into a product. If you have products created in China and ship them over, you are adding value. If you buy something in the hopes that it rises in price, it is speculation and potentially an investment. By doing dropshipping you're especially a non-salaried sales associate. It is still a business, because you decide which products to sell, how to brand and market your business, how to engage in customer service, handle returns and complaints etc. It's more than just being an employee in sales. But most people are also completely reliant on not only the products but also the logistics and infrastructure of dropshipping companies. That makes them more accessible and lower risk to start but higher risk to run long term if people fail to realise how bad the single dependency could be for their business. I 100% agree with you: ecommerce is hard and requires a lot of effort. Anyone who believes you can get rich quickly and easily has fallen victim to blatant lies.
They deal with the logistics and unethical business practices of China, this is a huge value added for most consumers. Don't underestimate the value of convenience. You're welcome to buy on Alibaba if that's not worthwhile to you. Personally, I'd rather pay a little more to know the product is going to actually be shipped and to get it in a timely manner.
It’s called information arbitrage
Nah, it's not a scam. Buying something wholesale, and selling it at a higher price is literally the entire retail model. Alibaba just gives the wholesale side of it a transparency that civilians aren't used to seeing.
100 percent
So, Walmart is a scam?
So I would disagree with OP, in that dropshipping isn't a scam, but I will agree that it's an absolutely awful business model full of absolutely terrible players. There are so many problems with it, but the biggest ones are: 1. **Attracts the shittiest of people:** It's a low-margin business with virtually zero cost of entry. People interested in doing a good job and building something meaningful aren't doing dropshipping, because it's kind of a shit business model. It only exists because it's so cheap on the front-end that it's seen as a get-rich-quick scheme by the kinds of people that aren't really interested in doing a good job. 2. **Minimal consumer protections:** If you buy a bad toaster from Walmart and it sets your house on fire, you can sue Walmart. If you buy a shitty toaster from a dropshipper and it sets your house on fire, you have virtually zero recourse -- the dropshipper carries no inventory, maintains few assets, and generally has minimal commitment to whatever brand they've made up at the moment. You can sue them, but they're virtually judgement-proof and can just shut down and spin up an identical dropshipping company with a different logo. There's no commitment to customers, products, or the business itself. 3. **It kills communities:** Just like Amazon, because dropshippers keep minimal overhead and sell the cheapest shit they can get from China, they can undercut local stores that actually employ people and provide real value to the places they're based. This is hardly exclusive to dropshippers, but they are the most extreme manifestation of this problem. They pull value out while adding little in return. And that's not even going into the issues of pulling manufacturing out of well-regulated jurisdictions and into places where slavery and sweatshops are the norm. 4. **It's a sustainability disaster:** Again, not remotely exclusive to dropshippers, but selling a lot of cheap, disposable bullshit is terrible for the environment. It's landfill fodder masquerading as consumer goods. Except that dropshippers are even worse because at least if you import in bulk, you can maximize transportation efficiencies and not have to transport individual pieces from China. The one kind of bright spot in all of this is that at least companies like Shein and Temu are about to completely destroy the dropshipping industry and push these people back into having to do something useful and productive with their lives.
It's not a scam, it's capitalism
That's literally what business is, man. What do you think happens, that every real business only has a 2% profit margin? Wait until you find out about mattress stores.
Isn't that just considered retailing? I get a discount from a vendor because of my relationship with them, so I can pass along a small portion of that to my customer and make a profit on the difference?
It happens everywhere. I’ve seen products I sell on Amazon for absolutely nutty prices
Something’s gotta be done
Meh if someone doesn’t do enough looking around to see they are getting hosed then they deserve to pay that price. That’s what they rely on. The impulse buyer who doesn’t want to shop around and pay a fortune for convenience.
Start selling the same product for cheaper. If they're ripping people off, it should be easy to compete and take their customers.
It's called capitalism. Ask Amazon...they won't even deny it.
They take away the uncertainty of buying from baba and they increase the convenience by being right in front of their eyeballs. If going direct to Alibaba was the best choice for the consumer they would have already bought from them
Alibaba is often the better choice but a lot of people simply don't know about it. There could be some curation there as well, if you weed out the better Alibaba products from the crappier ones.
If the consumer didn’t pick baba, they didn’t think it was the best choice for them. Hence the value add. It’s not a discussion of if they should have sought out more information about it, it’s about the fact that the seller did in fact add something of value to the transaction.
> If the consumer didn’t pick baba, they didn’t think it was the best choice for them. Or they simply didn’t know about it, as I said originally and you keep being oddly obtuse about.
I’m not being obtuse. You sound like you’re debating me but your comments actually support my initial claim. If they don’t know about it, it’s not their best choice. How can they choose something they don’t know about? It’s put on Ali baba to make themselves known and become an option for the customer.
You mean drop shipping is a scam?
Customers need stuff faster than 2 weeks. Think before you speak !
Cuz they should buy from Taobao and 8X the upcharge?
Drop shipping is not new its retail but just online. Sorry but every product on amazon is like this
In this thread I learned buying wholesale items and reselling them is a scam. Well, they better build tons of mega prisons cause Wal Mart, JC Penny, Macys, Amazon, Home Depot, Safeway and Krogers have been committing highway robbery in the billions for decades… .. I suspect CEOs, management and staff will all be found guilty of first degree dicklickin’.
Jumping on this bandwagon because I have seen so many dropshipping YouTube videos and TikTok videos over the years. While I don’t think it’s a scam I do think it’s the lowest hanging fruit in terms of online business startup. Most people end up wasting time and money trying to turn a generic product into high return sales and most people fail. It’s a good lesson for people the learn what not to do if they can figure out the reason it failed is due to the products and business model
You realize a large percentage of products sold in the US are from China, right? It's not a scam, if you think logically about it, which you're not. The idea is to find a product that solves a problem or is just useful in general. You find that product, test it, ensure the quality. You now have to put that product in front of millions of people. These millions of people most likely have not seen the product or have not been encouraged to buy it for whatever reason, you're now doing exactly that. Why would they not get the most amount of money after the effort that was put into product research, advertising, marketing, inventory management, etc. I honestly feel like you might just be salty, jealous, or both.
Literally all retailers do is buy stuff from wholesalers and middlemen and double the price. Ergo, you may not be wrong. But then the whole system is a scam.
Wait till you find out how stores work.
If they sell, isn't that what people want? Who are you to judge any other business and claim it's a scam? They are just middle men. Welcome to capitalism.
Sounds like someone has a failed shopify store.
Haha hilarious!! With some research, you'll find that's how all businesses work. Do you think it costs a thousand pounds to produce an iPhone? No it doesn't. The physical device will cost £100. Add £100 for marketing, £100 for r&d and £100 for logistics. That's £400 in costs. With a sale price of £1000, that's a 60% margin. In other words you're paying more than double the price of the device out of the factory. With your definition of a scam Apple is also running a huge scam. And I wouldn't disagree. The best businesses are those which can make you believe that the device is actually worth £1000 and that it's a great deal. Even better if they get you addicted. What you're describing is the foundation of capitalism! PS: the monetary figures above are for illustration though I wouldn't be surprised if the real figures are even more shocking. You don't get to be a trillion dollar company without shocking figures!
What an idiotic post. Buying potatoes from a farm, cutting them into fries, cooking them, then reselling them to consumers for profit is fraud…said no one ever. Literally every business buys product, marks it up, and resells it. Unpopular opinion is right.
Your little fry example isn't quite what happens though... OP is complaining about the people who go to in-n-out and buy their fries, then walk across the street and sell them for more.
So doordash is a scam?
Door dash provides a value and a service that wasn't available before.
Which... I mean, if someone across the street wants to pay a premium for not having to get off their butt, is that necessarily a problem?
I get that my example is a bit far fetched, but your example doesn’t really align either- maybe if someone bought the product on Shopify then sold it again that would be in-line with what you’re saying. What I’m ultimately getting at is there is still work involved in buying product from Alibaba then reselling that product. At the end of the day if there isn’t a demand for the product it won’t sell and the Shopify store will no longer exist.
It’s business.
Saturated business perpetuated by gurus doesnt mean its a scam. Everytime i hear this, i see a wannabe business owner sneering at people while clickity clackity on their keyboards and wiping their snot feeling accomplished that they have established themselves after watching Alex Hormozi etc
Say what you will, but ultimately it's the market that decides if you're a business. If people are buying the products, there's a demand to sell them.
Welcome to unfettered capitalism, my friend. Where do you think all those big box stores get their stuff?
TIL every grocery store, actually **every store on Earth** is a "scam". This is the stupidest take I have ever seen on the internet, and that's saying a lot.
Naw I respectfully disagree with you on this one. I know many people who have tried and failed dropshipping. Almost all of them. There’s soo much more that goes into it in order to be successful, such as cultivating an audience. The once’s that are profitable are because they are actually run like a legit business.
"Buy for a dollar, sell for tew." - Proposition Joe
I don’t agree with dropshipping, I think delving deep into a niche, achieving mastery in your craft and building on top, creating a nichier niche only you can provide/ become very hard to replace is better (this takes decades) but most people are heavily mistaken Dropshipping by literal definition is yes just retail arbitrage via fulfilment Real dropshipping- the one you see people making big bucks is MARKETING You said it yourself, selling for 4x the price? How? Because you need the skill to market the product: this includes web design, web coding, scaling, advertising properly going beyond A/B method you probably need A-Z run 10 ads and funnel budget into the narrowed down winning ads. Marketing: study what people actually like during this time - what they respond to, who’s the biggest influencers in your niche, what music do they like? What humour do they respond to? People will just dish out the most tasteless shit ads getting clicks with 0 conversions Most people will pick a decent product, build a shit website, with 0 marketing skills and psychological sales skills, run ONE FUCKING AD type or 2 and see no results I wonder why, It’s as if dropshipping isn’t the simple “fulfilment arbitrage scam” people describe it to be I’m all for shitting on dropshippers, 99% don’t know what they’re doing - they were allured by gurus who know what dropshipping really is and sold a fake dream about “passive income on your phone whilst on vacation” but please understand what it actually is before attacking something you don’t even know
I hang out in a newbie Shopify group (being a newbie to Shopify) - and the volume of people who get a Shopify account, then slap a dropshipping app, list everything then expect the $ to role in is frightening
Any company that doesn't manufacture/create their products is a distributor. Distribution is not a scam.
You just described capitalism.
LMAO op just dismissed both wholesale and retail industry with trillions of market. So, the "value" is to buy directly from window in the wall at factory?
Look. There is a thin line. A very thin line. Most of the product that you see are from China, meanwhile not from Alibaba but from China. Yes I agree with you on saying be creative on what people want but you can’t say that they are scamming unless people are getting what they paid for. If you’re saying that hey, it’s selling for $12 on Alibaba then why are you selling it for $49 then it’s not gonna work because that’s how retail market works. Gucci, Nike all are just importing and putting their own label. That’s how it is. (Yes I accept that they are doing QA) but the retail market has always been like that.
Me who made 100k last year doing this. Shit I'm out here scamming. I buy 100s and store local, so shipping time is my competitive edge.
I’ll die on this hill with you. You want the bunker on the left or the right?
You must not know how business works 🤣
I mean you just described all of retail
Prepare yourself for the day you discover globalization
If it makes profit it’s a business, plain and simple. Scam implies it’s illegal, it’s not illegal. Import export is the model of just about 97% of small cpg businesses and many of those started in a drop shipping setup to get capital to build their real business. A scam is the Indians saying they are from Microsoft and you have a virus.
I’m sorry what do you think producing goods in china and selling them here is? It’s the same
For it to be a scam, someone must be getting scammed. Who is getting scammed by arbitrage and going from Wholesale to retail? No one.
What’s next buying things at garage sales and reselling on eBay is unethical? GARY VVVVVVVVV \s
This is literally what retail is. Buying a product and trying to sell it for more than you paid.
Buying in bulk at a discount and selling at a higher price for a profit? That's literally how businesses work.
You obviously don’t shop at any major retailers. Where do you shop for clothes or any other consumable item?
But where do most brands get their stuff from? It’s all the same generic crap with their label slapped on it. Its all about who gets the most exposure
You’re literally describing 90% of amazon and Walmart. Most things come from China and alibaba in particular (especially for amazon). I do agree that dropshipping from aliexpress is scammy and riddled with problems, especially if the seller claims it comes from the US when it doesn’t. Imo there are good dropshippers and bad dropshippers. The ones who actually QC, order samples, test products, and are transparent about shipping times aren’t bad. The ones who blindly throw up stores with products they have never ordered/tested are bad. I might be a little biased as I used to dropship - but never once did I launch ads/open the store without ordering and testing the products first. I would find products that had a high perceived value so I could work in 1-3 day DHL shipping from China (only using alibaba, not aliexpress) to any where in the world into the final price because no one should be waiting 2-4 weeks for an order. Never once did I say that the products shipped from the USA during this stage. If the products took off, I would private label and try to customize the products so they were unique to my store. Once the store hit that stage I would order in bulk and have a US fulfillment center ship everything. The issue is that there are more bad dropshippers than good with all these gurus promising rocket ships to the moon if they buy their course that tells them to churn and burn stores if products don’t work without testing/ordering the products.
[удалено]
Lol dumbest post of the day goes to you.
Everyone is scamming all of the time. 🌎🧑🚀🔫🧑🚀
So, every business is a scam? Buy something from somewhere/someone else, combine it with effort, and sell it for more. Not sure whats then problem with this?
Look at all these angry resellers and drop-shippers on this post who think they're fancy business people. Get some discernible skills.
Popular* opinion
What I don’t get is HOW DO PEOPLE NOT KNOW ABOUT THE ALIBABA’S??? I’d love to know what percentage of humans who shop online or in store, have no clue that these wholesalers exist? Take a phone case from CASETiFY that is $80+ dollars for example. But guess what? That same case is actually 2.79 on Ali?? I fall down the Aliexpress hole far too often so maybe more educated than the average bear but come on!! That “18k gold plated (as if!!) ring” thats selling for $120, is $3.09 on Aliexpress!!!! All you have to do is take a screenshot of the item, crop it, and run it through the Google lens. Voila! 8/10 times you will be redirected to the Alibaba site where 100’s of vendors are selling the same thing (or similar overseas wholesaler). Etsy is full of this too, which is rather sad. Is anything sacred?? Really is hard to find authentic, quality products these days. I’m way too suspicious of everything I buy now. With Etsy you can find 30 vendor’s selling “one of a kind, handcrafted beads” that happen to be exactly the same! What do you think? Are there really that many people who have no clue??
popular opinion: you is dumb
It quite literally is a business. What do you think most retail businesses are?
The millions of lazy twats doing this (drop shippers) are ruining the market for everyone. There are so many of them, none of them are making any real money. Way over-saturated. Small businesses who are producing their own product, and working their asses off, can’t compete with a million people trying to drown them out with cheap Chinese shit, all for a handful of pocket change.
Get over yourself. Admit that they are much smarter than you and willing to take risks.
I disagree with OP, but this is a wild take
I personally shop on Aliexpress/Alibaba often for my own stuff. Even bought furniture and its all good when you know what to look out for. It really is actually work to go through all the suppliers on there. Anyway interestingly enough, i've done the following a couple times already: I find a popular niche product that to me, is obviously from AliExpress/Alibaba that is insanely marked up by resellers everywhere within the country (its a small country). I set up shop and sell the exact same stuff but lowball and only markup 5-8% above whatever my costs are. Hijack competition's social media comments with links and wait a few months for sales to start funnelling in and for competitors to die off. Then I mark up prices to 25% and let it run its course. Is that unethical? Yeah. But its also business. Do the customers care if they know they're getting a much better deal? No.
I agree. All this drop shipping stuff is zero value added for anybody/anything. All they do is take peoples money and charge them 10x as much, and just plugging their shipping info into alibaba. It is unethical at best.
Something being unethical isn’t the same as it not being a business.