Is Dropshipping a Scam?

Dec 07, 2020

Dropshipping is a type of e-commerce business model where a store owner sells products that are directly shipped from the manufacturer and doesn't need to hold or deal with any inventory. Not having to deal with inventory is one of the key reasons many entrepreneurs get into the dropshipping world, as this is one of the most comfortable business to start.

There are options available to become a dropshipper on platforms like Amazon, Flipkart, Shopify, Wix, WooCommerce, Ecwid and many more. You need to sign in to those programs and can become a dropshipper in no time. What if I tell you that the websites you are using for shopping groceries and all those fancy dresses are dropshipping stores?

So, do you think Dropshipping is a scam?

There cannot be a single YES or NO answer to this question. Not all dropshipping stores are scams. But as with any business, there is both good and bad. There are dropshipping stores that scam people if you are not cautious. It entirely depends on your call to order from a particular store or not, which I'll go through in detail in this article.

Nowadays, you only need a good website and a few advertisement mechanisms to give it a push. The road is too normal to walk. Zero inventory makes it far easier to carry the procedure in the current world.

Let me throw some light on this topic by giving you an example.

You purchased an item from Mr. A for $1200, and then Mr. A purchased the same thing from the manufacturer for $300 and shipped you in a day. The total Mr. A earned will be $900 without even keeping any inventory at all. This is called DROPSHIPPING.

Now where the SCAMMER rang the bell?

I told you that this work is far easy than it seems. It makes the owner benefitted in no time. Hence it attracts the energies of negativity too. Scammers know how to make someone fall into their trap very easily. They simply make a website that looks exactly like those you genuinely trust, with a similar logo and graphics. As soon as you purchase something from their website and make all the payments, they deliver you the products that have worse quality than you can imagine. Now, as soon as you go back in search of those Dropshippers, you find nothing. NOTHING. Because deleting a website or jumping off from this internet world happens with just a small press of a button. That's how people get scammed by the Dropshippers.

Now, this makes people wonder that is it that easy to scam or it is truly an illegal activity.

SO, Is Dropshipping a complete SCAM?

No, a complete NO. It's just another e-commerce model that sells products with minimal effort compared to the general e-commerce stores. This is far much better than really manufacturing something and then selling it to the customers. Dropshipping is a new business strategy to earn more in less time.

Let me clarify this by giving you a proper answer to all your doubts.

  1. It's NOT cheating if someone is selling you a product higher than the manufacturing cost. Because these dropshippers are the middlemen, and they do pay taxes and other deductions.
  2. You are scammed only if you are getting useless junk. Suppose the person or the website promised you to provide a product and then gave you something completely different. That is what I consider a Scam!

How to prevent yourself from getting Scammed on Dropshipping sites?

  1. Check for validation – Yes, if you are purchasing anything from a dropshipping website, check for their details like location and contacts. A genuine Dropshipper must have their location listed on their website. If you don't see anything worthwhile, then leave, and DON'T purchase anything from them. Also, there should be the proper name and address of the manufacturer on the website.
  2. Giving the option of full refund – Are they giving you a choice of a full refund if you find the product broken or of low quality? Those stores are better off than others. This option shows that they are indeed working with a trustworthy manufacturer, the same one you want to buy your product from.
  3. A full refund in case of non-arrival of product – This matters a lot. Check if they are giving you the option of a refund if you don't receive any product from them. Every valid Dropshipper will allow you to get full payment back if you don't get your product at all.
  4. Customer Support – Along with the above ones, check if they are providing good customer service and the options like email id and contact number so that you can text or call them afterward in case of any issues.
  5. Distribution Channels – Along with the location, if you are also getting accurate details about tracking your order or the distribution channels the dropshipper is using, you can be confident that the store is genuine. It can help you to trace back the order too.
  6. Know the manufacturer first – The simplest and most comfortable way to decide is by getting in touch with the manufacturer. This will give you the best assurance you want to have. The manufacturer will quickly provide every detail about the product and the legit drop shipper you should opt for.
  7. Check the delivery times – Suppose you want to get some product from a different country, and the Dropshipper is taking half of the time; it can be a sign that something is wrong. Moreover, you should track the delivery status of the product from time-to-time.
  8. Check the performance – Check the store background if any available until now, along with the people's reviews about the dropshipping store. It matters a lot. The reviews can provide a more in-depth take on the dropshipper and the product. It acts merely as a guide describing the experience of people who have purchased the product from the store you are interested in.
  9. Take power in your hands – Search as much as you can before going for the last option, i.e., payment. Understand that once the payment is made, it would be tough to get back your money.
  10. Start with little- If in doubt,  purchase something small and cheap from the Dropshipper. And if it goes smooth, only then decide on a high investment product.

Pro Tips for Shopping on Dropshipping Stores

Check the presence of the dropshipper and the information provided on the website. Finally, you need to contact the authorities and maybe file a case if you got scammed.

If you are a dropshipper, you can also purchase Shopify's Fraud Protect, fraud insurance. Many third-party apps help you prevent fraud on Shopify's store.

Hence this complete road goes like searching the website, checking their location and plant information, then checking their manufacturer. After this, check the manufacturer validation and what people have to say about the manufacturer's work.

Then as soon as you do it, contact the manufacturer about the Dropshipper. After that, purchase a small product. You should check the quality of the product that you received before making any big purchases from the same store. Before making the payment, do look for the refund option as mentioned above.

It will assure you that the dropshipper will not disappear after selling the product. Also, do look for the customer support they provide so that you won't regret your decision later on.

You're Scammed! What's next?

Even after this, you don't need to get stressed if you are getting scammed in the end. There are authorities and people who will help you trace out the scammer and get your money back.

But the customer need not be blind when the scammers come from behind to stab them from their back. They should know how to differentiate between a fake and a true dropshipper, and that's it.

This business is the most profitable one, now in 2020. People from developed countries go for this option by purchasing products from around the world. As a customer, you need to be smart enough to avoid getting scammed online.

Scammers Role In Dropshipping

Even though Dropshipping is not a scam, scammers do use it to channelize their evil intentions. The most common scamming method is if the scammer uses an identical website to a genuine dropshipping store.

The scammer steals images and text from a genuine dropshipping store and fakes the product listing and other details. Now, here is where people are trapped if they are inattentive and casual about the whole deal.

Placing an order usually results in receiving damaged goods or products having compromised quality or other reasons. After getting such a disastrous service, you would surely like to return the product, but the scammers don't leave a trail behind.

You won't be able to contact the seller, and sometimes, you may not even identify that the order was placed from a fake website.

One of the main reasons why you could be lured to their website is the price they offer. Providing products at a comparatively lower price induces consumers' minds, and they are inclined towards buying.

Virtual competition has also been on a surge these days. Every vendor wants to expand his consumer base, and what better way than reaching out to people through these dropshipping websites.

They apply various schemes and strategies to fight the competition.  This is one of the main reasons, why majority of people think dropshipping is a scam.

Is Scam a Threat To  Dropshipping?

WELL NO. Dropshipping is booming day by day. The scammers have arisen from the dark end of high profitability. But, with increased competition and smart customers, it hurts them. Nowadays, every customer knows it is better to surf and get valid data before deciding on the purchase.

So it has become a next to impossible task for a scammer to earn through this mechanism. Also, the customers are well trained when it comes to giving their card details on the website they don't trust.

The era has changed now. People are habitual of online purchasing now. So it takes too much effort to fool anyone. Even after that, in case of such a purchase, people go for paying in cash. Hence it again becomes a bottleneck for the scammers to sustain in this new era.

The whole point is the "Information" — the information a customer must have before making any online purchase. And the way to come out also matters a lot. The validation process a person needs and the procedure he will follow talks a lot about his smartness.

So the point that dropshipping is a scam is so untrue. It depends on the customers whether they are falling into a trap or using a torch to see the loophole. And hence this is not a fraudulent activity at all.

Final Words!

I love shopping through dropshippers, and by maintaining a level of awareness, I never got scammed online. If you keep your eyes open and verify the manufacturers before placing an order, there won't be a reason to panic.

Often people select the most straightforward path like, in this case, a low price offering can attract many customers. But, if you do not receive products at all, there is no point in the discount you have received.

Prady

Experienced dropshipper with significant success and valuable failures! Here to share all my expensive dropshipping learnings, experiences and fun facts. I'll be dropping value packs here every week!

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