Dropshipping is a business model that let you eliminate the stress of inventory and it is becoming increasingly popular in the e-commerce world.
But it’s not as easy as it seems. There are many dropshipping scams, and you could lose a lot of money if you’re not careful.
In this article, we provide a guideline. It will help you avoid dropshipping scams and guide you on how to find a reliable dropshipping supplier.
What Is Dropshipping?
When using the dropshipping model, e-commerce companies do not store their own inventory, meaning any products sold by the store are not stored in their warehouse.
Instead, when a sale is made, the dropshipping supplier purchases the product from a third-party company (wholesaler or manufacturer) and ships it to the end consumer on behalf of the e-commerce company. As a result, the e-commerce company never handles the products directly.
You may learn more on our blog about Dropshipping Process for details below:
Dropshipping Process: How to Start Dropshipping Business?
What Are the Benefits of Dropshipping?
Dropshipping is less risky for a new e-commerce company because it does not require inventory or warehouse space investment.
This freedom from the traditional wholesale model gives the dropshipping business greater flexibility regarding location and product availability.
No need for inventory at dropshipping may also lead to easier expansion, product testing, and less material or space needed to launch an e-commerce business.
Is Dropshipping a Scam?
For sure, it is not a scam. It is essentially the same as any other business model. The only difference is that dropshippers don’t need to store large amounts of inventory.
They just get orders from customers and then purchase from suppliers. The supplier ships the goods directly to the end consumer, and the dropshipping supplier acts like a middleman.
In fact, many sellers on some e-commerce platforms such as Amazon are also operating dropshipping businesses. Therefore, dropshipping is a legitimate and real business model.
You may learn more on our blog about Dropshipping Legal for details below:
Is Dropshipping Legal? Everything You Must Know In 2022
Why Do People Think Dropshipping Is a Scam?
The following are the reasons that make people think dropshipping is a scam:
1. Poor quality of the product
As a dropshipper, you have no direct touch with the goods and no control over the quality of the products. As a result, you may receive many bad reviews from customers who claim that the quality of the products they receive is not good.
Gradually, these bad reviews will greatly affect your business’s sales. Finally, you may fail in your business. So, you may think that dropshipping is a scam.
2. Slow transportation time
The dropshippers don’t have to do any manufacturing work. Instead, they purchase the product from suppliers, which may delay shipping to a few weeks. If you store the product yourself, it will take less time to ship.
Delayed delivery of products can affect your business because consumers will give negative feedback. Therefore, the customer may think you are a scam.
3. Fake products
A fake item is a copy product with a famous brand’s logo or label. The item may look safe, but it is sold illegally because the consumer is not buying the product from the brand owner.
Fake products can be very profitable for dropshippers but are a scam for the consumer.
Top 5 Common Dropshipping Scams
Dropshipping scams are too common, so you must do research before choosing a supplier.
Here are some of the most common dropshipping scams include:
Scam 1: Good quality products at low prices
Dropshipping suppliers offer their products at low prices. If you work directly with them will get a higher profit margin.
But in the end, you may receive bad feedback or refund requests from customers who complain that the product they received is not as described. This kind of feedback is bad for your business.
Scam 2: Fake wholesalers and reviews
Fake dropshipping suppliers appear convincing by presenting a beautiful inventory and claiming to sell their products at wholesale prices.
In addition, these scammers can easily generate fake websites that closely resemble a legitimate wholesale business, including pages with lots of fake or misleading reviews and feedback.
Scam 3: Make a down payment
The dropshipping supplier will ask you to pay a fee for an automated dropshipping system that generates revenue quickly or a high-value catalog to perform well in the marketplace, making you smile every time you see your bank balance. Don’t be fooled by such gimmicks.
Scam 4: Fraudulent orders
In all the orders you receive, some must be genuine and some fraudulent, which is common in the e-commerce industry. As a new e-commerce company, you will be happy to receive an order, but you must first identify if it is a real order.
Scam 5: Get a rich quick plan
In this plan, a dropshipping platform, usually a membership or pay site, will offer you a “fool-proof proxy formula”. This formula will allow you to make thousands of dollars in dropshipping income in just a few days, provided you pay a subscription fee. You should avoid these types of scams.
How to Avoid Dropshipping Scams?
Use these tips to identify dropshipping scams so you can avoid them:
1. Check tracking records
Legitimate dropshipping suppliers and wholesalers have tracking records to show how long they’ve been in business, the number of customers they serve, and more. If a dropshipping supplier lacks these, it may indicate that it is fake. Be cautious and vigilant.
2. Lack of legitimate contact information
Usually, larger dropshipping suppliers will clearly list all contact details. While contact information is a good indicator, it does not necessarily prove that the source is trustworthy.
Therefore, reviewing your vendor’s contact information and address is important. You can easily verify this.
3. Promises of quick riches
Any company that promises big money fast is probably not legitimate, just like other industries. Dropshipping or not, any company that promises profits with little effort is best avoided. Scammers and middlemen promise big promises but make you pay monthly or upfront fees.
How to Find a Reliable Dropshipping Supplier?
If you want to perform dropshipping without scams, a reliable dropshipping supplier is necessary. A good dropshipping supplier must have solid capabilities and an adequate supply of products.
Dropshipping is a good option for beginners without a brand or experience. However, operating costs are increasing. Therefore, dropshipping can be a profitable business if you choose a good supplier.
Yansourcing has a professional team to control the quality and sourcing of products. They can upload new products, test models, take photos, ship goods, and follow up with customers. These significant benefits allow effective cost control and ensure product quality.
Dropshipping is a long-term growth strategy. Finding a good supplier is essential to have more exposure to dropshipping. Yansourcing is an excellent place to start with dropshipping. Many sellers have used it to save time and effort.
You may learn more on our blog about Dropshipping Websites for details below:
Complete List 2022: Top 15 Best Dropshipping Websites
Dropshipping Scams FAQ
1. Is dropshipping a good idea?
Yes, it is a good idea to start a dropshipping business. After all, this business is easier to start and expand because of its low risk, low capital, or low/no inventory management obligations.
2. Is dropshipping profitable?
You can get rich from dropshipping if you work diligently, persistently, and with dedication and use the right business methods. However, dropshipping is not a get-rich-quick plan.
3. Is dropshipping unethical?
Dropshipping is not unethical, and it is not a scam. Dropshipping is just a method of fulfillment. Dropshipping supplier delivers all products directly to the consumer.
4. Does dropshipping support international shipping?
You can start a dropshipping business from anywhere in the world. Over the years, dropshipping has developed into an international business where you deliver goods worldwide.
Dropshipping Scams Conclusion
Spotting a dropshipping scam can be a challenge. The best way is to double-check everything, do your research, and ensure you’ve set yourself up for success before receiving your first order.
Are you finding a reliable dropshipping partner? Contact the experts at Yansourcing, who can help point you in the right direction.
If you have any questions about the dropshipping business or have ever encountered some dropshipping scams, you can share your valuable experience and advice by leaving a comment below.
