What is dropshipping? Let’s break it down together. Put simply, it’s an order fulfilment model wherein a business selling goods doesn’t actually have any of its products in stock. When consumers buy these mystical items from such retailers, the businesses receive their orders and then forward them on to third-party suppliers for shipping. It might sound like a bizarre set up, but it’s far more common than you’d think.
Dropshipping isn’t a new phenomenon, in fact it’s been around for a while. Huge e-commerce retailers, such as Wayfair and IKEA, use this business model on a large scale in order to sell and move goods worldwide. Today, however, dropshipping has transformed into a smaller, entrepreneurial side hustle that seemingly anyone can do as long as they have a semi-stable internet connection. However, it’s not as simple and carefree as it sounds.
There are a number of online creators who produce content specifically to provide hopeful hustlers with dropshipping tips and tricks. YouTubers Austin Rabin and Jordan Welsh are very big in this arena, while an influencer whose page is aptly titled moneywithmac dominates the TikTok side of things.
Their stories are immediately enviable and, as so many of these scams are, they’re sold as being easily replicable. Rabin and Welch, for instance, are both 25-year-olds with more than six-figure incomes to their names, which they implore “you can do too” if you simply follow their step-by-step videos.
However, when you dig a bit deeper, it appears that most people involved in dropshipping are actually losing money. Hoards of evidence of this can be found in the very helpful and always sarcastic subreddit dedicated to the trending business model.
It’s easy to see why dropshipping is such an attractive venture for so many. The online fascination with the business model lies in its apparent ease, lack of upfront investment and of course the huge profits to be had. But the real money to be made in dropshipping seems to actually come from selling the one-on-one lessons and digital how-to-content that so many in the community peddle to unassuming victims who’re wanting to enter the marketplace. Doesn’t seem like a very fair deal to me.
Built on hustle culture platitudes, these dropshipping influencers paint themselves as hugely successful and trustworthy business gurus. There’s a big catch though, there’s often no way to verify whether or not their income is coming from their digital storefronts, or the advice that they’re selling to those hoping to get rich quick..
As explained by Vox reporter Terry Nguyen: “they are glorified pawns in the creator economy, a middleman monetising the secrets of his unverifiable “success” and marketing it to anyone willing to pay for it.”
Unfortunately, for those hoping to strike it rich with dropshipping, the market has now become highly oversaturated. The finite products that are available on Wish, AliExpress, Alibaba and other international suppliers favoured by dropshippers can now also be found on countless Shopify websites across the internet.
Take the website CozyToesCo for instance. The site is full to the brim with photos of Louis Vuitton cladded women wearing the coveted, sold-out mini UGGs—or, more accurately, a pair of cheap knock-offs. By reverse image searching the photos left in the reviews section, I’ve found several other websites selling the faux UGGs.
So why is dropshipping over-saturating the internet now? Just like ghost kitchens, dropshipping storefronts can be thought of as ghost stores. They’re a product of the increasingly symbiotic relationship between social media and shopping.
If you’re a regular social media user, you’ve most likely engaged in ambient shopping, and you may have even purchased a product from a dropshipping website without realising it. Spooky, I know.
Ambient shopping, as defined by Nguyen, is “either actively looking to buy something, or being told to by targeted ads or influencers.” You might not initially think it, but social media is a fertile breeding ground for dropshipping.
Another internet activity that goes hand-in-hand with dropshipping? The infamous ‘TikTok made me buy it’ phenomenon. As of 2 February 2023, the tag #tiktokmademebuyit has more than 7.4 billion views, revealing just how many of our shopping decisions are fuelled by what we see on our phones and how a product can go viral at a moment’s notice.
As social media scrolling and shopping become even more intertwined, consumers are more prone to impulse buying, meaning that in the heat of the moment, they probably aren’t paying as close attention to where they’re buying from. If you see that out-of-stock TikTok item you’ve been wanting on a Shopify storefront, chances are you won’t be reverse-image searching or checking out the website’s FAQs before purchasing.
The rise in popularity of Shopify can be linked directly to this uptick in dropshipping. Previously, online sellers hoping to drop ship would typically post their products on Amazon’s Fulfilment by Amazon (FBA) service—and many still do. Third-party sellers make up about 50 per cent of the retail giant’s commercial activity.
While Amazon does provide quality assurance on all items, they take a 15 percent commission on each product purchased through their site. For this reason, many sellers have jumped ship to dropship on Shopify. The storefront creation platform offers an easy—almost foolproof—way to design a functional, aesthetically pleasing website that directly links to overseas suppliers, like our highly problematic friend AliExpress.
Ultimately, entrepreneurial dropshipping mimics large-scale global supply chain systems on a micro level, with success for some and loss for others. The real point here is perhaps how dropshipping businesses—at any level—profit from overseas labor by upcharging items without doing much, if any, actual work.
So, next time you purchase something in a TikTok-induced haze, be sure to consider where your product is coming from, whether you actually need it or not, and who it may be negatively impacting along the way.