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The weird, get-rich-quick world of dropshipping
- orasis 6y agoThis kind of “journalism” that drips with judgement in every sentence makes Wired look like a cheap tabloid.
- techslave 6y agowell if the shoe fits ... i can’t imagine what you were expecting
- SI_Rob 6y agoprobably not related except by irony, but Wired's original print format used a large tabloid-like page dimension.
- lidHanteyk 6y agoDropshippers are literally rent-seeking [0] middlemen, though, and their actions are contemptuous on the surface, for the harm done to consumers. In addition, it seems like their relative wealth is creating wealth inequality in some Southeast Asian locales, which is the calling card of neocolonialism [1]. I don't see why we shouldn't judge marketers harshly, in general, and these folks in particular seem particularly unctuous. [0] https://en.wikipedia.org/wiki/Rent-seeking https://en.wikipedia.org/wiki/Rent-seeking [1] https://en.wikipedia.org/wiki/Neocolonialism https://en.wikipedia.org/wiki/Neocolonialism
- ryanwaggoner 6y agoDrop-shipping is not rent-seeking, any more than any retailer or wholesaler is rent-seeking. Is anyone you buy from other than the direct manufacturer a rent-seeker? From WP: Rent-seeking is an attempt to obtain economic rent (i.e., the portion of income paid to a factor of production in excess of what is needed to keep it employed in its current use) by manipulating the social or political environment in which economic activities occur, rather than by creating new wealth. Rent-seeking implies extraction of uncompensated value from others without making any contribution to productivity. Drop-shippers don't manipulate the social or political environment, and the value they provide is the same as any retailer. They just don't take on as much risk or physically handle the goods. It's a sales and marketing business only, and margins are both more volatile and slimmer on average as a result.
- lidHanteyk 6y agoI think that you're overestimating what dropshippers actually provide to the economy. Like Instagram-style influencers, dropshippers are ultimately advertisers; they create consumerist desires where none previously existed. To quote from "Office Space": > Bob: So, what would you say you do here? > Tom: Well look, I already told you! I deal with the goddamn customers so the engineers don't have to! I have people skills! I am good at dealing with people! Can't you understand that? What the hell is wrong with you people? Just like Tom, dropshippers are redundant at best and harmfully interfering at worst.
- heliheliheli 6y agoThere's value in advertisement. No more behaviorist mumbo-jumbo for you, the mind creates desires, external circumstances do not.
- blast 6y agoPart of why they seem particularly unctuous is that the article is written specifically to make them seem that way.
- cookie_monsta 6y ago> it seems like their relative wealth is creating wealth inequality in some Southeast Asian locales Yes, because that didn't exist before. And what's with the wiki links to the commonly-understood terms? Condescending much?
- lidHanteyk 6y agoSadly, HN regulars neither understand nor respect the concept of neocolonialism. The typical HN user seems in denial about the existence of the American Empire [0], and it's not obvious that American expats form a network of global influence, from operating PMCs [1] to OFCs [2], unless one either does the hard work of reading, or one gets linked directly to the relevant articles. Additionally, HN is not built on very good software. On higher-quality fora, like Lobsters [3], hyperlinks can be embedded directly into paragraphs and do not disrupt the flow of text. HN is a backwards and primitive site in comparison. Imagine if the regulars were willing to tackle ideas like the concept that the USA itself is a tax haven [4]! No way would people be able to talk about that. So we must take it slowly and carefully introduce folks to these ideas. Edit: [5] just broke within the hour. Here's a story of an American expat engaging in bad conduct abroad. I didn't even have to go searching for this; it showed up on Imgur while I was trying to forget the fact that I am being downvoted, yet again, for being a leftist with facts. [0] https://en.wikipedia.org/wiki/American_imperialism https://en.wikipedia.org/wiki/American_imperialism [1] https://en.wikipedia.org/wiki/Private_military_company https://en.wikipedia.org/wiki/Private_military_company [2] https://en.wikipedia.org/wiki/Offshore_financial_centre https://en.wikipedia.org/wiki/Offshore_financial_centre [3] https://lobste.rs/ https://lobste.rs/ [4] https://en.wikipedia.org/wiki/United_States_as_a_tax_haven https://en.wikipedia.org/wiki/United_States_as_a_tax_haven [5] https://twitter.com/JackHHazlewood/status/1256183497762406405 https://twitter.com/JackHHazlewood/status/125618349776240640...
- wdutch 6y agoAnd what credit this lobste does to the Republic of Serbia. I hope they pay their taxes there.
- 55555 6y agoThe largely white people dropshipping in SEAsia are a drop in the wealth inequality bucket compared to uber rich SEAsians living in their own countries.
- DogOnTheWeb 6y agoWired is a lifestyle magazine, not a wire service. Editorial voice is part of the appeal.
- chiefofgxbxl 6y agoHas anyone on HN done any dropshipping? What was your experience?
- LargeWu 6y agoI have sold some t-shirts in this manner, which is one of the primary subclasses of these stores. Doing this has the advantage of access to legit suppliers based in the USA, so you get predictable shipping times and pretty good quality and customer service. However, it's way more expensive, and the quality of DTG (direct-to-garment, essentially inkjet printed t-shirts) is not as good as screen-printing. I now print my own stuff out of my garage and use on-demand printing as a way to validate ideas or fill gaps in inventory.
- ParanoidShroom 6y agoI did it before the hype and found some trending items. Check the google adwords and the math added up. It worked, no record profits tho. Then big local sellers started undercutting me a lot. I assume they have some data mining trending processes running. Ad costs spiked and it wasn't profitable anymore. It was a fun try, but not worth it for me.
- econcon 6y agoIt works and it's easy to test. When I started machinist shop it took me wayyy longer to profit from that shop than dropshipping. Testing is easier and cheaper. Just don't buy bullshit course from idiots. It takes special type of person to crack dropshipping. If you know how conversion rates work, you've basic math, design, and copyrighting skills and you know how statistics work, you can make good money. That said, don't go crazy with greed or you'll blow up your merchant processing account - that's a huge problem to recover from. You don't want bunch of angry customers and if you are totally unempathic to them, you'll lose in long run.
- sacks2k 6y agoI've had a few dropshipping businesses over the years. Here is my experience: Margins are tight. You need to have enough money in the bank or credit to cover loss. This will happen, especially if you are buying anything overseas. All suppliers need to be vetted and checked out. Companies will lie to you, just to get your business. Counterfeits are rampant. If you have a supplier that will sell you something name brand for 1/3 the cost, it's 99% a fake. This will result in: possible lawsuits (if they are in China, our laws don't apply, so the law will go after you), lost shipments at the border (you will most likely eat the cost for this), and losing customer's trust. On top of this, it's so easy for your dropshipping company to steal your customers from under you. Creating your own product/service is the best way to have a long-lasting business and you really won't get rich quickly with any dropship business.
- LargeWu 6y agoMany "successful" dropshippers simply sell success. That is, they make claims about how much money they're making, and sell courses or coaching to unwitting marks. And if their marks' stores don't pan out, they an always offer the "advanced" course, the "super secret" formulas, just give me another $3000 please. There might be a few bros out there doing well at this, that is, actually selling things to consumers, but mostly it's selling inessential products to indifferent consumers at tight margins. There's nothing wrong with dropshipping as a business model, per se, but there's a lot of hype and shadiness going on in these circles.
- techslave 6y agowish.com is a pretty wildly successful drop shipper. everyone else, not so much
- econcon 6y agoI am a dropshipper and average margin on products I sell is 60-100%. I don't sell course because i really doubt I could make much money by doing that when I can just keep dropshipping. I never bought any course but I had a startup so I am familiar with sales and how you make conversion happens.
- LargeWu 6y agoYeah, I mean, if you have it solved, then that's great. I just tend to see a lot of comments in some communities I'm in to the tune of "I spent $2000 setting up my store, lots of traffic, no sales, please help". It's often touted as a get-rich-quick scheme when in fact it takes a lot of hard work and an understanding of how to sell.
- voldacar 6y ago> margin on products I sell is 60-100% what kind of products do you dropship?
- tehwebguy 6y agoThis is the one question no dropshipper will ever answer.
- weeksie 6y agoI spent a while in Thailand and the dropship-bro "digital nomad" culture is just everywhere. During burning season the Chiang Mai dudes would come down to the islands and the rest of us expat/nomad types would bail to avoid them. Lots of Tim Ferris cultists and so forth, though there were also a lot of sincere people just trying to get out of the rat race. All chasing the four hour workweek thing. It's a weird subculture.
- deleted 6y ago[deleted]
- ashtonkem 6y agoI genuinely wonder if there was a point where these 4hww tactics worked before the book was released, or has it always been this way?
- Nextgrid 6y agoDrop shipping and similar high-margin ventures work when there’s no competition. There’s no reason why it wouldn’t work in the beginning but eventually competition appears and margins go down as the market readjusts.
- lsalvatore 6y agoI read the book 10 years ago and it was hugely inspirational to me. From what I remember it was not about drop-shipping or specific tactics (it does mention virtual assistants), but general ways of thinking, like the 80/20 rule. For me, he really pioneered the idea of "the side project" as a thing people were doing seriously, and gave many examples of different businesses people started on their spare time that lead to a full time income. So Tim Ferriss is not a "get rich quick guru". The 80/20 rule, outsourcing things you're not good at, will always be relevant, and that's why his books/podcasts are so successful.
- beh9540 6y agoI have had two relatives get roped into this world - one ended with them forgetting they had to pay sales tax and owing massive amounts of money, to the tune of millions in back taxes, the other fizzled out pretty quickly. The craziest part of it was they totally bought into the "super secret" nature of the whole thing. There was a huge amount of family drama when someone in the family mentioned that her brother had a business on Amazon. He said it was top secret and he had access to trade secrets that no one else had. Having unfortunately been involved on the tech side of MLM early on in my career, it was painfully hard not to point out the predatory nature of the whole thing.
- NikolaeVarius 6y agoThat just makes it seem that the relative was making tons of money and made a "dumb" mistake
- Justsignedup 6y agowith drop shipping literally every penny counts. You are competing against prices that are identical to yours, so shaving a few cents off your prices actually matters. He forgot that taxes are needed and shaved those cents off only to be hit in the face.
- thisisnico 6y agoI know a few people that claim 100K a month. That's all they claim, they don't say what that 100K a month is. I found out later it was 100k a month in what they managed in the store of a customer. They were the ecommerce middlemen that set up stores for successful brands that wanted to branch into eCommerce. They likely still did make more money then the non-consulting DIY dropshipping middlemen that provide no value.
- j-c-hewitt 6y agoThey will inflate the number by just citing their revenue similar to pyramid schemers. You can write a bot that will generate lots of revenue, and any idiot can generate lots of revenue with dropshipping. The trouble is risk and the cost involved in turning a profit from such a business. I am confident that any 10 year old could sell $100k+ per month online with about a week of training if that was the only requirement and they were allowed to spend $120k. Actually earning significant profits is the difficulty here, and that only gets easier with the standard toolkit of running a successful online retail business: understanding the products, knowing the market, and understanding all the legal hurdles.
- nine_zeros 6y ago> western immigrants – expats, as they prefer to be known Made me chuckle.
- Anthony-G 6y agoI’ve noticed that British and American migrants usually refer to themselves as expats while most other nationalites that I’ve spoken to refer to themselves and/or their fellow citizens as migrants when living and working in another country. It kind of bugs me; it’s as if there’s an unspoken assumption that an expat is better than a regular migrant who may have uprooted themselves from their native land due to economic necessity. Disclaimer: I’m Irish and spent a couple of years as a migrant worker in other European countries during the mid-90s – mostly to get a better cultural understanding of what life is like for our fellow European citizens.
- jariel 6y agoExpat and immigrants are usually completely different categories. Technically both are 'migrants' but it wouldn't be the best term. If you work for a bank in Ireland and they ship you off to Germany (or wherever) for a 2-year stint, you're an ex-pat. If you marry a woman from Germany, move there, and start your citizenship process and plan to live there, 'immigrant' is a good term. In between, it's gray.
- Anthony-G 6y agoThanks for the clarification on the usage of those terms. I grew up in the 80s where emigration and the plight of Irish emigrants were hot topics. Thankfully, the economic situation had improved by the time I reached adulthood so migration was a choice but it was still many years later before I came across the term, “expat”.
- cmdshiftf4 6y agoThere's Irish people in the south of Europe who consider themselves expats and that they're part of the Irish expat community too. My own interpretation is based on the underlying intent of someone moving countries. If you're not intent on pursuing citizenship and are there mainly for business or retirement, you're probably going to call yourself an expat. If you're intent on moving, building a life and becoming a citizen then you're an immigrant.
- jariel 6y agoI suggest maybe there's a huge difference between true 'drop-shipping' and literally creating a product for export. You don't need to 'touch the product' to become a business. Selling a commodity product is like having a little store on the web. Running ads and the shipping right from some regular retailer, the most 'pure' form of drop-shipping is really just price arbitrage, this will always exist but I can't imagine for too long. Working with a factory to develop a product, marketing it, and selling it, well that's a regular business.
- ashtonkem 6y agoI feel like we should talk about how immigrants get to re-title themselves as expats if they’re rich enough. That doesn’t sit right with me.
- scottLobster 6y agoThey do? An expat by definition is a citizen of another country living abroad. An immigrant is someone who changes citizenship.
- ashtonkem 6y agoAh, I was not aware of that difference. Edit: hold on. I have several colleagues who are foreign citizens in America on visas; and I’ve never heard of them being called expats. I feel like I only ever see that word when applied to Americans or British citizens moving to cheaper areas of the world.
- phalangion 6y agoIn my mind, it's the word Americans use for Americans living in other countries. I doubt the locals in whatever country they're in consider them "expats." Just Americans.
- ashtonkem 6y agoI’ve heard in connection with other English speaking countries, usually UK or Australians living abroad.
- stevekemp 6y agoUK folk living abroad, often in Spain, definitely refer to themselves as ExPats. Me? I moved from the UK to Finland, and I'm definitely an immigrant. (As are most of the people living in the part of the city I'm in. Weird.)
- jariel 6y ago
- exabrial 6y agohttp://archive.is/fJ195 http://archive.is/fJ195 No stupid cookie popups
- j-c-hewitt 6y agoThis is not actually mainstream dropshipping. Not all dropshipping is from China or international in general because of the unpredictability and latency. It makes more sense to dropship from stable and predictable suppliers for products that you don't have to spend a lot to create demand for. This article could have been written in 2005 and I think a lot of the reason why many of the people mentioned are expats selling to international markets is because ad rates in the US are generally too high to support this kind of business model in the US currently in 2020. In the US the dropshippers I work with and am very familiar with use mainstream sources with predictable shipping times as do I when I dropship a selection of items very occasionally. The course sellers would generally not be selling courses if they could be scaling their business instead. Dropshipping is not generally a high margin business whereas course selling is. A scaled dropshipping business can make a lot of money but it is not a laid back type of operation really -- it's labor intensive and generally requires some in house automation to make sure that your offers for products match the offers you have from your suppliers. GRQ dropshipping seems exciting and sexy because you never have to take possession of the inventory and you don't need to put a lot of cash up front if you get paid fast enough. Normal dropshipping is as boring as a wrench or a hammer. Also this article sort of conflates private label dropshipping with dropshipping more generally. They are really quite different things. The typical private labeler takes possession of products here in the US and probably does not dropship the bulk of their stuff just because customer expectations are pretty high for delivery speed and predictability. If you are sourcing from AliExpress or what have you, it's just a lot easier to suck up the unpredictability as the seller and then to sell it to the final buyer with more predictable fulfillment without dropshipping.
- RandallBrown 6y agoAlso, dropshipping is something that many brands offer to retailers. Like if you buy a Patagonia jacket from Nordstrom, it might be sent directly from a Patagonia warehouse instead of a Nordstrom warehouse.
- theturtletalks 6y agoAmazon did this for years. Brand products were listed on Amazon and pushed directly into the brands operations system when sales came through.
- throwaway3563 6y agoI somehow knew this was going to be about “rich kids of Instagram” before even opening it. The part about renting and posing with the Lambo is tragic.
- dagnabbit 6y agosomehow it had never occurred to me that they were renting those. i had assumed they were leasing, and I still thought that was a sad flex.
- cookie_monsta 6y agoApparently there's a whole side industry around renting out sports cars and other bling to people making hip hop videos. Now there's a growth market
- cmdshiftf4 6y agoThere's even services that let you rent private jets when they're grounded to take instagram photos on. NYMag but there's other sources - https://nymag.com/intelligencer/2017/10/you-can-rent-a-grounded-private-jet-to-take-instagram-photos.html https://nymag.com/intelligencer/2017/10/you-can-rent-a-groun...
- hckr_news 6y agoSpeaking of which I used to watch MTV Cribz back when I was a kid. The cars were rented, and the homes apparently never even belonged to the celeb. Was all manufactured, which I understand given the amount of crazies, celebs would not want to show off their homes. And the cars being rented to maintain their status.
- roel_v 6y agoI was watching an episode a while ago (forgot which one) where it was obvious the two rappers had never even been in the house before, like having to look around what sort of room it was before saying 'this is the lounge' or whatever. There was a picture of a sail boat that they looked at for a bit, slightly perplexed, and then said 'yeah this is a picture of a boat because we like boats' or something like that. It was hilarious.
- the_watcher 6y ago> 2015, the year Facebook Ads Manager was launched but before dropshipping got big. Is this right? I was definitely using Power Editor prior to 2015, and am almost sure that Ads Manager predated it.
- aantix 6y agoWhat is Power Editor?
- purplezooey 6y ago"...explains one digital nomad over the fart of hot tub jets in Amo, a luxury spa." This is a unique way of describing the sounds of a hot tub.
- seemslegit 6y agoHow come the people doing this don't get hammered on chargebacks and refunds ? What payment platform is willing to put up with them ?
- advisedwang 6y agoThey are providing real products, as advertised, and usually process refunds etc honestly. While quality and service aren't likely to be amazing, I doubt they get scam-levels of chargebacks. Besides, payment platforms don't mind if there are chargebacks and refunds. _They_ still get paid.
- paypalcust83 6y agoI ordered some boxed EPYC processors from an East Coast online shop who dropshipped OEM/tray processors from Ingram-Micro (a large US wholesaler of computer parts used by many small stores) thinking I wouldn't notice the difference. Either the store or the dropshipper substituted cheaper parts that don't have a warranty, so I turned around and sent them back. They can both finger-point to each other if anything goes wrong. Complete waste of time and credit card space. In my view, a successful company should own as much of production, supply, distribution, sales, and support as close to the customer's last-mile as is pragmatic. For example, Moen (US market) plumbing fixture products seem to have excellent customer/tech support, documentation and parts dispatch. McMaster-Carr, a commercial parts and tools supplier, carries zillions of hard-to-find SKUs and dispatches them quickly. I can't see how outsourcing the most vital departments to the lowest bidder does anything but introduce potential risks for organizational self-immolation.
- joejerryronnie 6y ago1990 called, they want their business model back.
- xhruso00 6y ago...claims to have made “around 400k, I guess” in his dropshipping career. (When asked to provide evidence, he told me that he didn’t keep records. ... I don't understand how a this youtuber person can get successful?! Is it his speech, his appearance or some other magic?
- system2 6y agoAnother typical online scammer scamming people. Nothing new to see.
- system2 6y agoI am tired of seeing sleazy scammy dudes making money or pretending to make money with weird Instagram and youtube channels. And people are dumb buying into their scam. It takes 5 seconds for us to see it, why can't average person see their bs from a mile?
- patio11 6y agoWorth noting that dropshipping is not particularly new nor particularly the province of undercapitalized mom-and-pop operations. Some of the largest retail/wholesale companies in the world also dropship; it's an obvious thing to do if you own a channel, don't want inventory risk, and can put up with the substantial challenges involved. (I learned the word in 2000 when working for an office supply store, which was happy to take inventory risk on paper or printer ink but did not want it on $X,000 pieces of furniture, so if you ordered them they'd arrive at your door straight from the factory.)
- JJMcJ 6y agoIt was also a way for small timers to get into mail order business without an inventory. Of course it meant thin margins, especially if you were getting print ads as well, but some people got it to work.
- mindfulplay 6y agoThere used to be a time when products and innovation made in America were deemed high-quality and highly desired for. I am talking non-software. Here we are talking about people who make a living out of cheap potentially slave labor and to top it off, selling courses to others to be a marketing/ecommerce snakeoil salesperson. Truly disgusting to think about what we are turning into as a society. Is there a future in which manufacturing would ever return to the US? Legit question....
- tehwebguy 6y agoI did drop shipping and retail reselling as a hobby to earn a few million airline miles, AMA.
- jklepatch 6y agoI used to have a ecommerce website with 50k USD of monthly revenue. I am very bearish on the future of this industry, with de-globalization, trade wars and the ever expanding reach of Amazon.