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Dropshipping: Hustlers making millions from goods they never handle
- peteretep 6y agoThe odds of making a killing on dropshipping seem to be similar to those of making it as a rockstar, with a small but real number of people ending up making it as a session musician asa consolation prize
- wasdfff 6y agoThis is way less work than being a session musician for your beer money, though.
- peteretep 6y agoThe session musicians I know and the people with successful drop shipping niches I know tend to work about equally hard and get paid about the same amount. I don’t know anyone who’s able to keep a drop shipping business going “passively” given the intense competition
- foolinaround 6y ago"the fool and his money are soon parted" This has become quite a phenomenon due to the rise of the 'influencers' and a generation that blindly follows them. Even though this method may be legal, the onus is on the people to look for something like BBB certification, and this new certification, whatever form it may be, should be nimble and easy to initially obtain, and fast to update by the consumers.
- jonathanliu 6y agoThis is why I value Amazon reviews so highly.
- foolinaround 6y agoI agree regarding Amazon reviews. What if there is an independent 3rd party company that is able to collate the reviews from verified purchases from different vendors like Amazon, Walmart, etc. Not sure of the business model.
- danielecook 6y agoConsumer reports goes a step further and tests products. People have to be willing to pay for reviews.
- propogandist 6y agoAmazon is ridden with shill reviews. Most reviews on amazon cannot be trusted
- foundart 6y agoHave you tried fakespot.com?
- somehnguy 6y agoI used that a while back out of curiosity. I used to write fake reviews in exchange for products (Sorry everyone, I don’t anymore!) because it was a free way to get products related to my hobbies. Most of the reviews I knew were fake, it said they were fine. I wouldn’t trust it for anything expensive.
- jonathanliu 6y agoFor sure, but as far as I'm aware, you can't directly buy your way to the top spot. In my experience, the products that earn it have been high quality backed by good customer service.
- dicknuckle 6y agoImagine thinking BBB is anything more than Yelp.
- s5300 6y agoUnless I've been reading absolute bullshit my entire life... The BBB is and always has been a literal "you give BBB money, we give you good rating - no money, no rating/bad rating" They had good enough PR that they made themselves look like an official government/whatever else trustable entity... They're literally just a private business with a name that was good enough to fool people into thinking they're legit/worth something. Can somebody correct me on this? Am I crazy?
- silverpepsi 6y agomy grandpa would say something like "the bbb....", lets give op a break he is probably well into his twilight years
- scribu 6y agoDropshipping has been around for a while. What's new is using Influencer Marketing to lend more credibility to knockoffs.
- im3w1l 6y agoThe influencer is the brand.
- ricardobeat 6y ago> 'It's very easy to take the moral high ground, but if a lot of people had the skillset and were making tens of thousands of dollars profit a day, then they would probably think pretty differently' I imagine this is the way most criminals rationalize their work.
- eertami 6y agoThat quote sickens me, such a tragic waste of oxygen. Worse still, he believes others might share in such an abhorrent world view except they simply aren't "skilled" (haha, yeah right) enough to be scam artists. I've filed a complaint with the BBC, because on top of being purely terrible, this is also blatant self promotion and offers nothing of value to the article.
- kovek 6y agoWhat does the self promotion look like?
- tootahe45 6y agoIt's probably more like 'dumb morons will just waste their money on other worthless consumption anyway', which is not wrong for people buying every IG promotion.
- la6471 6y agoOk another clickbait and shallow article. HN needs to stop promoting these. Dropshipping in itself is nothing wrong. Dropshipping with the intent of defrauding people and selling counterfeits is what is wrong. Why cannot the writers of these articles be precise and responsible in choosing the title of their articles? With one stroke of pen they malign a whole group of people without any second thoughts.
- wschfdkbrmcdf 6y agoIt’s the BBC
- awakeasleep 6y agoYou're taking downvotes here, but I agree. The most consistent source of surface-level, near clickbait articles that make it to the top of HN is the BBC.
- optimalsolver 6y agoThese days, it takes me a moment to realize that term also stands for the British Broadcasting Corporation.
- whoopdedo 6y agoThe question I'd ask is can a dropshipper avoid selling counterfeits? They never inspect the product for QC. How do they know when the exporter is being dishonest?
- gboss 6y agoYes absolutely. There are plenty of dropshippers that have relationships with manufacturers and wholesalers that only buy from the authentic manufacturer.
- dustingetz 6y agoMultiple fallacies in this thinking, see https://thezvi.wordpress.com/2019/12/29/perfect-competition/ https://thezvi.wordpress.com/2019/12/29/perfect-competition/
- sct202 6y agoIf someone's trying to sell you something that takes 1 month to ship out, you might as well go more direct and look for it on Aliexpress.
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- LatteLazy 6y agoI love how anyone doing their own thing must be engaged in something dodgy. The vast majority of people dropshipping are honest and entrepreneurial and doing no hard to anyone. Good luck to them, not everyone wants a 9-5 with a boss and low wages.
- Kaze404 6y agoIn my experience working at a payment processing company that dealt mostly with dropshipping and other barely-legal sellers, I don't believe that's the case. Fortunately I wasn't in the customer service team, but I heard the stories all the time.
- gameofcode 6y agoWas it the payment processing company that were prone to dropshipping and barely-legal sellers, or that what was clogging up customer service? I'd imagine those rare exceptions are exactly where most of customer service time in ecom/payments is spent.
- Kaze404 6y agoMost of our clients were dropshippers, so I don't have any basis to compare. It could be confirmation bias or just misinformation, but I can't not let my experience sway me into at least avoiding them entirely in the future.
- bjyoung93 6y agoOld news here, revenue can be crazy for these stores. Ask them about their profit margin. But hey some really do work, just capital intense
- milesvp 6y agoI got sucked into watching a bunch of videos on youtube from drop shippers, and no one talks about profit, only about revenue. The more I watched the more convinced that the only reason these people are wasting their time posting these videos is that they make more money on their guides and tutorials than they actually make off of drop shipping. And then you can finally start to see the cracks if you watch enough. You see their failed experiments and realize that it's not uncommon to need to spend crazy amounts on ad spend, just to see if you can get any orders. And then you find out that most of these products have a lifespan measured in months. It looks like a total grind looking for new products that might turn a small profit, and hope you get another big one before you can't afford any more experiments.
- tootahe45 6y agoI learnt from the first 5 videos the real money is in selling get-rich-quick ebooks. Some of those guys even do $1000 consultations, i recall one of the top business guru youtubers had a bunch of people pay $25000 each for a 1 week in-person course..
- s5300 6y agoFuck. I'd love to get into more detail and write out a massive essay/text wall... but today's not the day... An unfortunately long time ago now, when I was a younger teen (like, 13), I had a large amount of mechanically inclined hands on hobbies. As a dirt poor person from the really dirt poor part of Appalachia, if you wanted something, especially in a niche hobby, you built it from near raw materials. At the time, a few of the things I needed had a surprisingly small supply chain/availability in the U.S., and with asinine prices at that. One thing in particular, could be found practically nowhere aside from a single source in the U.S., and at something like $20/pop with a business type account necessary to purchase. Frustrated, and having been raised by the internet, I went to China, mainly Alibaba/AliExpress for sourcing - Tangent: as I write out this comment, I was going to state "back before everybody and their uncle knew about AliExpress in the U.S., atleast." - turns out, it was only a year after AliExpress had launched. Didn't know that till now. So, I found the specific thing I was after - needing only two of them. Two were $8 shipped, 10 was $17 - and these were the exact thing being sold for $20/PC from one U.S. supplier, and a pain to purchase. Obvious what choice I made, luckily had an older friend to use their credit card for purchase. Since I only needed the two, I for some reason thought, hey, maybe somebody else might be in my same situation, put them up on eBay for $5/PC + shipping, and hoped that maybe 2 or 3 would sell in a month and I'dve gotten what I needed for basically free. By the end of the night, all eight of them had sold. Kinda shittered myself, and that's how I became a go-to stateside supplier of a few very niche fans, some other RC-type hobby supplies, and most notably the second top-seller of quality multi-stranded silicone "hobby" (UL 3135) wire on eBay as a sick 13-15 year old. A little over 2500 packages in 2.5 years. And, I think I've forgotten to include the main point - I was making some pretty massive margins on sales - but still undercutting the next seller by half or more. My entire point of doing this was in hopes of making some niche hobby stuff more accessible for people like me. I'm lucky enough to be able say that I'd regularly reach out to buyers and get fairly frequent replies, and found that I was often able to fulfill that goal. Anyways, that's my I should definitely be asleep by now HN ramble of the week. My apologies that it wasn't on topic/directly related to "anonymous" dropshipping in which the "importer" never even touches their "product" cause err, my entire point being - I absolutely fucking HATE this shit ass fad or whatever you may want to call it I hear being talked about everywhere. Honestly, fuck these people. Fuck em like the intro to Method Man.
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- binarymax 6y agoI almost got scammed when looking to buy a miter saw from a big box store. I went to the websites of Lowe’s and Home Depot after doing some research, and seeing lots of reviews on the product by different accounts saying it was $200 cheaper in other places (but not saying where - that’s the interesting thing!). Searching for the model number brought me to a couple places that were selling at the price touted by the reviewers. On one of the sites I got as far as the PayPal checkout button, but didn’t pull the trigger until emailing. Couldn’t find contact info aside from a web form and realized what was going on. Interesting tactic.
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- ta17711771 6y agoStill need one? Happy to help with the best price you'll find on powertools, handtools, or consumables. Drop an email address if interested.
- wrnr 6y agoThis is just arbitrage over time and space, why is it so hard for people to understand that information is also an economic good. Look closely at your life and try to find when you are not doing it. We all know: "It is difficult to get a man to understand something, when his salary depends on his not understanding it", we need something like: "It is difficult to get a man to understand something is wrong when he is doing it".
- optimalsolver 6y agoIf it's not sold by and dispatched from Amazon, I don't wanna know about it.
- muunbo 6y agoThis is exactly how Amazon got its start: Jeff Bezos didn’t have a stockpile of books; he only ordered them when a customer made an order on his site. The difference of course was that he did physically handle the books.
- superhuzza 6y ago>The difference of course was that he did physically handle the books. If that's how it worked, then it wasn't really drop shipping. It's not drop shipping because the goods didn't go directly from vendor to customer. That's more like Just in Time fulfillment. https://retailops.zendesk.com/hc/en-us/articles/202763175-Set-Up-Vendors-for-Dropship-or-JIT#:~:text=Using%20Dropship%2C%20retailers%20send%20customer,forward%20them%20to%20the%20customers https://retailops.zendesk.com/hc/en-us/articles/202763175-Se....
- dorkwood 6y agoI wouldn't be surprised if there was more money to be made in teaching people how to dropship. I've seen a lot of "how I make 30k per month with dropshipping" ads over the last five years or so.
- ChefboyOG 6y agoThis is 100% the case, and it's not just dropshipping. A lot of popular "side income" plays are like this. It's a meme in trading subreddits that the most successful day traders are the ones who sell courses on day trading. (Note: Not critiquing the idea of side hustles or diversifying income streams in general—just making an observation about some specific dynamics in these communities.)
- awinder 6y agoYeah exactly, Financial Independence/Retire Early (FIRE) bloggers/authors are another. Inevitably in any sort of thing you'll have people who are storytellers who parlay storytelling + the thing they're into (which sounds fun) so agreed on not critiquing. One might want to be aware of how much of that is going around though, at least in calibrating expectations to reality.
- dna_polymerase 6y agoYeah, those guys who want to retire early on dividend payments from companies whose products they condemn because consumerism is horrible.
- emit_time 6y agoIf you sell a course you made 100% profit, basically very little chances of loss, and your business can go to zero overnight, but not negative, and very little needed to scale up. Compare that to running a real business where things change all the time
- dna_polymerase 6y agoSure and if they'd market their courses like that there would be no critique. But this is not how these things are sold. They promise unlimited upside and no downside.
- mattkevan 6y agoUnless you started early enough, like a decade ago, or are unusually lucky, it seems like the only way to make money drop shipping is to create a course that promises to teach others the secrets of making lots of money with drop shipping. Bonus points for standing next to an expensive car and holding a wad of cash for the promo photo. Of course if drop shipping was so lucrative, they’d be doing that instead of bilking hopefuls with their expensive courses on Udemy or wherever.
- Justsignedup 6y agoEverything about dropshipping reads like a pyramid scheme
- zalkota 6y agoYou don’t buy the product and store it, you just find the customer and the distributor mails it directly to the customers, not you. In a pyramid scheme, you would be buying the product and holding onto it.
- dexterdog 6y agoIn a pyramid scheme you would be tricking others into buying junk for "their own businesses" to sell to other people.
- bigtunacan 6y agoDrop shipping is nothing like a pyramid scheme. It's just a form of arbitrage. You buy from one party for less money and sell to another party for more.
- ryanlol 6y agoUnless you started early enough, like a decade ago, or are unusually lucky, it seems like the only way to make money starting a business is to create a course that promises to teach others the secrets of making lots of money with a business. Bonus points for standing next to an expensive car and holding a wad of cash for the promo photo. Of course if starting a business was so lucrative, they’d be doing that instead of bilking hopefuls with their expensive courses on Udemy or wherever.
- emmastory 6y agoThere's a really interesting episode of the Reply All podcast that acts as a good explainer for dropshipping from the perspective of people who are encountering it in the wild and have no idea what to make of it. I found it useful as someone who has seen a lot of ads for dropshipped products on instagram and elsewhere but didn't understand how exactly the method was making money and for whom. https://gimletmedia.com/shows/reply-all/dvhe3l https://gimletmedia.com/shows/reply-all/dvhe3l
- msie 6y agoComment on comments: How can someone in one breath mention sourcing material directly from China for their customers while in the next breath say "mass produced China junk/apparel" when referring to other people's products?
- dawnerd 6y agoEveryone seemed focused on dropshipping from China but there’s a lesser known form where they will source from eBay and sell on their platforms. A lot of my eBay sells are obvious drop shippers (asking to ship without a packing slip or anything mentioning eBay). I don’t have a problem with it though, I’ve had zero returns or negative feedback from them.
- hanniabu 6y agoSame with etsy. Create a curated shop of unique items you believe are underpriced.
- jariel 6y agoThey source from Walmart and sell on Amazon. Not kidding. $5 arbitrage. Get an Amazon box, then a Walmart box, then the product makers box. 2020.
- dawnerd 6y agoYep I’ve done that but honestly it takes a lot more work than the youtubers make it out to seem. Much easier to just source from garage sales or thrift stores.
- jariel 6y ago? Sourcing from 'garage sales' means working capital, shipping trickery, limited inventory. Sourcing from 'Walmart' means you just 'click and send' - it's pure arbitrage. No working capital needed.
- dawnerd 6y agoThat’s not how most Walmart arbitrage works. People use tools like brickseek, find the clearance or price mistakes, drive to all the stores then send into amazon FBA. If you get a Walmart box inside of an amazon box that’s precisely what happened - although that’s just really weird in itself but whatever. I make way more money being selective than when I have drop shipping a try. It’s really not all that cracked up to be.
- dang 6y agoA large thread from a few months ago: https://news.ycombinator.com/item?id=23041138 https://news.ycombinator.com/item?id=23041138
- tedunangst 6y agoAre these revenues or profits?
- twat 6y agoDropshipping is like MLM, but the scam part happens after the purchase. Often times the dropship supplier doesn't accept returns, meaning that when the customer returns your product which you have no real quality control over, they get their money back but you don't. The idea that these sorts of online arbitrage opportunities exist or have any durability when everybody has access to Google is flawed.
- Ologn 6y agoI used to sell a particular 3M product via the mail. I generally did not drop ship it, I ordered it in bulk from a wholesaler and then sold it on eBay, as well as on a website I maintained, which ran a heavily modified version of osCommerce. Buying this one item, which I knew had regular demand, from a retailer allowed me to offer a price which was competitive, but from which I could also make a small profit. With dropshipping, I was competing against others who could drop ship the same items, so I could not offer as competitive a price, nor have any kind of margin. I used dropshipping for two scenarios. One was if I traveled and was unable to ship out the item I had in stock. In this scenario, I would drop ship the item and lose any margin (or sometimes even take a small loss). The other scenario was to test new items to sell. My main wholesaler (which I bought my 3M bulk item from) could drop ship a catalog of items at a decent rate from their one watehouse. I also had accounts with two larger dropshipping wholesalers, both of whom had multiple warehouses with mostly the same catalog in stock - with items more likely in stock, but at a higher markup. So what I did was for through my main wholesaler's catalog and see what items they had. I then checked that both other wholesalers had the same item in their catalog, and that all currently had the item in stock. Generally my main wholesaler would drop ship for the lowest rate. So I put the item up on my website, at a break even price. I did this for many items. Sometimes I would have a sale. Often my main wholesaler still had the item in stock. I would break even on the sale, but would know there was demand. Sometimes they would be out of stock - then I would drop ship from one of the two backups and lose some money on the sale. Maybe I would increase my sale price until I knew my main wholesaler had the item in stock again. As margins were small, one goal was to sell more and increase margins. If I bought boxes, tape and shipping labels in bulk, my margins increased a few cents per sale - I could decrease the sale price (and increase sales doing so) while also increasing my cut a few cents. This worked for a number of things - with $3,000 a month in sales my Payapl fees would drop, with $10,000 a month in sales they would drop even more. This would also allow me to offer more items at a competitive price. I'm not sure how it works nowadays. One lesson I learned was what to do when you succeeded. I got to where I was shipping several items a day and making a small margin, and had the opportunity to ship even more. But it would then outgrow my closet space - I would need to rent some warehouse space or something to receive shipments and store items. Also, as sales grew, I spent less time programming my web site, and more time putting items in boxes, taping up boxes, weighing boxes, printing out shipping labels to attach to boxes etc. I figured I eventually would have to hire someone part time to ship items out during the week. By then I was familiar enough with the business to decide I did not want to make this leap, and decided to wound down my business. Actually I stumbled out of the business like I stumbled into it - my friend had some familiarity with some of these wholesalers, knew I could sell online and suggested I try it out, which I did.
- level09 6y agoThe biggest issue I found when I tried dropshipping around a year ago, was the insanely long shipping times. I'm not sure how people get around this problem (who wants to wait 10 days+ for sometime they liked on instagram to arrive?) Maybe nowadays there are some solutions around this? Any dropshippers would like to share their feedback on this?