The weird, get-rich-quick world of dropshipping
wired.co.uk
wired.co.uk
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.
everyone else, not so much
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.
what kind of products do you dropship?
wait here it is:
https://www.cringely.com/2009/03/14/parrot-secrets/
This guy had found a niche for an online business.
I can't help but wonder how many competing cookie-cutter copies of the businesses were started the day that article was published.
I don't mean how many people write about tech, I mean how many people write about tech - and the who, and the why... and the why not.
Then go to that advertisers profile and checkout their all running ads on their page, you can easily Google how.
Most newbies fall for sunk cost fallacy.
So a 60-100% margin tells us nothing.
Keep in mind the ones buying either don't have time (to look up on Amazon if it's selling for cheap there) or are impulsive buyers.
You could be selling very cheap items once a month.
At the risk of being nitpicky, it sounds like you may be talking about your markup, not your margin.
Markup = ( SalePrice - YourCost ) / YourCost
Margin = ( SalePrice - YourCost ) / SalePrice
If your gross margin is 100%, it means you got the product for free:
Margin
= ( SalePrice - 0 ) / SalePrice
= SalePrice / SalePrice
= 1
= 100%
Markup
= ( SalePrice - 0 ) / 0
= SalePrice / 0
= Infinity or beyond [1]
Or buy for $25 and sell for $100: Markup is 300% and gross margin is 75%.
[1] https://en.wikipedia.org/wiki/Division_by_zero
But what if your SalePrice is also 0? I asked our Lenovo Smart Display about this: "Hey Google, what's zero divided by zero."
She replied "No one knows. It's possible that zero divided by zero is some unknown number mathematicians have yet to discover. Maybe they'll name it after you!"
Name checks out.
But if you really want to see how prevalent it is, take a look at r/dropshipping. There's tons of posts trying to sell courses, or Shopify themes, or a new commerce platform, etc. There's an entire "get rich quick" industry that's aimed at targeting other "get rich quick" dropshippers.
/s
source: I know someone with a proper addiction to this stuff. Think 6-digits “invested” in “life-changing material”...
;(
There is a lot of scams in there though. Telling the difference is not easy.
I keep thinking I’ll come across as a failed developer who now has to teach for ad money because he can’t do anything else anymore.
I think most will struggle compared to a 6 figure salaried developer consistently bringing in paychecks.
His last php course I think he made 300k+. His latest css framework by my calculations netted him over a million.
His in previous refactoring to collections I think he made between 100-150k.
He recently down turn off all ads on his radioshow because he doesn't need the money.
Taylor Otwell has made millions from laravel ecosystem saas type sites.
Jeffrey Way doesn't disclose figured but based on user count and monthly revenue he must be pulling in at least 500k.
It's out there if you want it. Start a radio show, get opinionated, sell others on your vision. Then offer products to support your new vision.
Why? Youtube is a vast wasteland of videos, if people think that then your videos simply won't get many views, if people do find you insightful you will.
Unless you're specifically worried about the lack of low views maybe upload some random videos of you wandering around maybe even talking about random things first (because there's a trillion videos on youtube of people doing this already) so you get used to it.
2. Before your youtube channel becomes popular to get noticed in a good or bad way, it will probably take a long time. Teaching code, being good at coding and being popular on youtube are 3 skills that dont necessarily overlap.
3. If you do get noticed, the (financial) benefits of it far surpass any developer job. And usually it actually help you to get dev jobs anyway.
Until I realized it was incredibly cynical, selfish and self-centered.
Not everybody has the same motivations, and this is not a zero sum game.
I love coding.
And I love even more teaching other how to code and help them get to where I am.
If you know a stock is going to appreciate in value and you tell everyone about it, they are going to buy it and cause the stock price to rise. If you didn't buy any and they did you will miss out on the appreciation. Alternatively, if you buy enough of the stock and don't tell anyone that will also cause the price to rise in value and other people will miss out on the appreciation.
Teaching someone else how to be a better programmer does not diminish your market value as an engineer in any meaningful way. It most likely increases it. Disclosing your winning trading strategy will make it so you can't profit off it because your trading costs will rise to such a level that the trade is unprofitable.
Actually, that's the part I'm struggling to understand. Why isn't drop shipping automated? And what's stopping consumers from bypassing drop shippers altogether?
Situational awareness and a narrative of trust. The number of advertisements on facebook these days promoting some retail site where every single product can be found on aliexpress for less money _and_ free shipping is staggering. The only reason you would buy from them is 1) You don't know what's on aliexpress because you don't know about aliexpress, 2) You don't know what's on aliexpress because you don't trust rando chinese factory sellers without western-friendly spin.
Though in my experience most AliExpress sellers are friendly and willing to refund or work through issues anyway. I've had fewer bad surprises on there than Amazon.
The part you left out is highlighted:
> They just want to Google $THING and buy it from a website that they've heard of....
People google stuff (or search on Amazon), land on Amazon or some other online retailer, and buy it.
You might be surprised how much stuff is drop shipped via Amazon sales, and that can be direct shipment or to an Amazon warehouse then FBA.
And yes, paying $25 for a $3 rack rate good is close to standard. If you walk through a Target or Walmart, you will see tons of stuff that can be purchased on Alibaba for about that ratio.
Edit: For clarity.
I think people get very angry about dropshipping because there is this self-help industry around it...but what that really reflects is that platforms for acquiring customers have totally changed: costs are nothing, you don't need huge scale to contact customers, etc.
But it is a legitimate business model, people have been dropshipping for decades (shock: most Asian manufacturers have little to no interest in working out how to market to Western consumers), and you can make billions doing this if you want - Wayfair is a dropshipper, Wish is a dropshipper, you can do this if you want.
I'm working on an e-commerce automation platform called Openship and one of our first users wasn't even into dropshipping. She sold her own brand coffee but wanted to sell coffee accessories like french presses, grinders, etc. Her buyers would get these add-ons with the coffee. She would ship the coffee and dropship the other items. Those add-ons would cover her ad costs and she eventually private labelled those items too. That is how you effectively use dropshipping to test and build out your catalog.
Aren’t restaurants calling DoorDash and GrubHub out over exactly this “ghost kitchen” practice though?
Parent was referring to DoorDash pretending to be affiliated with the real restaurant you but from. That's not really dropshipping.
Dropshipping would be setting up a ghost kitchen storefront but not even having a kitchen, just redirecting orders to Chile's or whatever.
Key things if doing the real version of this.
1) In person supplier visits to vet them (yes, you need to fly to china
2) Amazon reviews are everything to these guys. So ad copy that is not too overblown (disappointment), amazing customer service etc. FBA.
3) Stick your own brand on the product and try to build that in a niche.
Lot's of seedy stuff also, but it does make really good money when its working for sure. These guys live in total fear of their accounts being banned / blacklisted (usually by competitors filing fake reports on them).
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.
Like if you buy a Patagonia jacket from Nordstrom, it might be sent directly from a Patagonia warehouse instead of a Nordstrom warehouse.
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.
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.
This 10 year old sounds like they're ready for the next YC batch lol.
The more I read about it the worse it sounded.
Theoretically they should have gotten good help from a CPA by then, but if it's a largely automated business and it suddenly skyrockets, it might be easy to just enjoy the money rolling in without taking it seriously enough.
That one little trick (/s) of developing an audience, especially a devout and loyal audience, is the part that most people are not good at.
They could have 'earned' hundreds of thousands, only to owe millions.
Also he really talked up virtual assistants a lot as you say. I don't hear a lot about them anymore, is it still a useful thing?
With the relatively small start-up costs, if you can limit the downside risk it's worth a shot. But as with anything with a low barrier of entry people grossly miscalculate the odds of success - easy to begin does not equate to easy to win.
And that's when the "$0 to $100,000 in 30 days" ebook hucksters jump in with all the answers.
But the last couple of times I've gone backpacking in Southeast Asia, you can't go to any hostel common area without at least a handful of nomad-bros on their MacBook and a Chang bragging to anyone nearby about "yea I'm a digital nomad, I'm making so much money even while just chilling at this bar". A lot of them have somehow turned the travel aspect of the culture into "just part of the job", as if the only reason they are traveling is because "working and traveling is cool", rather than simply "travel is cool".
The majority of "nomads" I've encountered seem like they are mostly uninterested in travel, but they do it anyway because that's "what you're supposed to do" if you're a nomad. This leads to a bizarre culture where talking about the places they've been becomes more of a "digital nomad resume" than it does a recounting of enjoyable travel experiences. Instead of "I went to the Batu Caves and it was gorgeous, they have such interesting architecture there!", it becomes "yea I've been to the Batu Caves, there's a really nice cafe with good wifi just outside that I used to work from".
Have you ever had a conversation with a professional consultant and they have this weird habit of bragging about waking up at 4am to catch flights to NYC, and the only thing they ever tell you about NYC is how nice the Midtown Marriott's beds are? It's kind of like that.
It's inane peacocking. Virtue signaling without any virtue. Etc. Yuppies never die.
That's one reason I avoid Indonesia. Everyone there is just toxic in terms of tourists.
Japan and Philippines are much more rewarding and much less "digital nomads." It used to be fun, but if you're part of any of the online groups on facebook it's a toxic sub culture.
Personally I found the Ubud-style “wellness” tourist to be the worst.
Digital Nomads are in those places because it affords them a great lifestyle at minimal cost.
Perhaps you’re also confusing travel with sight seeing. For me personally I love to travel but have little care for temples, churches, most waterfalls (unless it’s something truly spectacular) and other architectures which there are millions of around the world, or honestly are just a bit underwhelming. For me, travel is about being in amongst different cultures and experiencing what it’s like to live in a different place, and having unique experiences that you don’t get elsewhere.
Yes, maybe some people are only taking advantage of the lifestyle and have little care for their environment, but like any group of people there’s a spectrum.
*by which I mean, less intense scrutiny at the border, which seems to be a privilege of westerners (I am one) in these countries vs. say, south east asians.
I would expect the economic benefit to the country to be significantly positive:
1. Every dollar spent is foreign income
2. Limited future costs to governmen: no retirement (huge cost), no unemployment benefits, no health (tourists should be insured - foreign income if actually need to use health services), no education.
3. Taxation still occurs (sales tax, wages of anyone working in a business the tourist uses).
edit: 4. If the working tourist wasn’t in the country, the country would see zero of that income... It is marginal income.
edit: In New Zealand for example: 1/2 of NZ government spending is on social welfare and education; another 1/4 is on finance; and Sales tax is 12.5%. We should encourage foreigners to work here as there’s no way their spending wouldn’t help the country, especially if they are earning a lot and spending a lot. Working visas allow people to take jobs from locals, which not what “digital nomads” are doing.
Morally it's a bit hazy at the moment. But if we think we'd be OK with someone living in our own country in three month chunks, while all the income they generate that is not spent on local goods/services essentially goes offshore, then no problem I guess. Add to that the fact that for the analogy to be accurate, our hypothetical person would likely speak our country's language at an extremely basic level, or not at all.
edit: just saw your edit and now I will have to edit accordingly >_<
edit:
>Working visas allow people to take jobs from locals, which not what “digital nomads” are doing.
This is getting into slightly different ground than my OP. In the Asian countries I'm familiar with, almost all visas for foreigners do not take jobs from locals--they are for jobs locals can't do for whatever reason.
I agree with some of what you wrote about NZ and digital nomads' spending generally, but I still think it's reasonable to expect tax revenues from someone who is employed and in a country longer than 180 days. That's when the NZ government starts to consider NZ citizens as NZ tax residents--after 180 days in country. "Wanna stick around? Gotta contribute." is just my basic view I think, but thanks for your input.
NZ export income is ~40 Billion, with 5 million inhabitants (USD4000 each).
So anyone from a first world country earning overseas income and spending it here is a massive win for NZ, even without income tax (which pays for things they don’t get: social services and education)... So long as NZ can send them home if they stop spending, send them home if they can’t pay for expensive or chronic healthcare services, or send them home if it is causing significant negative social externalities. Even retirees from other countries should be welcome if they are spending savings.
The Thailand example is more complicated and I did look at some of the economic numbers. I would struggle to see how getting significant foreign earnings could be anything but economically positive for Thailand - so long as the “digital nomads” are spending above say USD10000 per year and are not causing significant social harm.
The vast majority of them are spending $20,000 or less. VAT is Thailand is 7% so that's $1,400 in tax. And that's probably overstating things because much of their spending will be on things that go untaxed for one reason or another.
There's only a few thousand of these people in any given country, by most estimates I've seen. Which matches my personal experience. In any given country they will only be in 2-3 cities and if you spend time in those cities you'll be surprised how small the expat circles are even in a city of 10 million.
$1,200 in tax from 4,000 digital nomads is...$5,000,000. Thailand's economy generates $500,000,000,000 a year. The illegal expat contribution is a tiny, minuscule drop in the bucket.
Unsurprisingly, countries (just like neighborhoods that crack down on AirBNB) might want to optimize for people who want to stay long term, adopt their values, become part of the social fabric...not just maximize marginal income from people who will never even try to learn the language and don't have a single local friend.
What's more, the arguments all have a whiff of colonialism to them. If having foreigners working in your country and not paying income tax is so amazing....why don't you get your own country to do it first?
At the end of the day, the countries get to set their own laws. You don't get to ignore their laws because "well I'm an entitled middle class white man (there are effectively zero digital nomads who aren't white men, in my experience) and I'm bringing a lot of money into their economy don't you know!"
"Digital nomad" is just a "white person who is an illegal immigrant".
agreed... and there certainly are visa paths for people willing to participate in this sort of optimisation, the Korean visa I hold being a good example.
>What's more, the arguments all have a whiff of colonialism to them.
As do the blithe statements about "<country> is so CHEAP." That's always a bit cringe.
Why would they want that? Perhaps the best part about Westerners, and why they get privileged treatment at the borders, is that they reliably leave.
> $1,200 in tax from 4,000 digital nomads is...$5,000,000.
The export income from nomads spending money earned elsewhere is the total amount they spend less the imports they cost: it is certainly not just the VAT. USD10000 x 4000 is 40 million of export income - that is actually a significant number that politicians would chase after (well, they would here in NZ).
> Thailand's economy generates $500,000,000,000 a year.
Thailand’s export income is ~215 billion (2017), not 500.
> The expat contribution is a tiny, minuscule drop in the bucket.
Irrelevant: you could say about every small export business, so why not close them all?
Economically, look at the marginal benefit of adding one digital nomad, and decide whether the benefits (export income, but also positive externalities) outweigh the costs (negative externalities like social costs of having “bad” foreigners, or “colonialism” etcetera).
The marginal export income from a digital nomad is say USD10000 per annum. That is economically great, so long as the social costs are not too high.
Note that I’m from NZ and I definitely think it would be economically worthwhile to have high income digital nomads come here even if they pay zero income tax (see my cousin comment for that analysis).
Fundamentally: Thailand accepts foreign cockwomble tourists, so I can see little reason not to accept cockwomble “digital nomads” as well.
Edit: I actually empathise with your sentiments: New Zealand gets a lot of tourists (1 in 7 jobs are directly in the tourist industry), and for a long time we allowed foreigners to buy property, so I have seen some of the social damage they do. Albeit the damage from tourists is much less than Thailand from what I have personally seen. Although NZ is more of a “white” country, we still have mixed feeling towards wealthy US people e.g. Theil bought himself a passport here. NZ is more egalitarian than the US, but still has more wealth inequality than the scandy countries (on average most Maori are hit particularly hard).
Edit 2: It’s only really a legal difference between (a) a person that works at home then travels to spend money as a tourist, and (b) a person that works as a digital nomad while a tourist. The distinction is arbitrary. Countries can make whatever rules they like, but if you want tourists, you want digital nomads. NZ gets plenty of backpacker tourists that spend fuck all per day and we welcome them.
As I mentioned, I live in a South East Asian country and have for many years. There is a difference between tourists and people staying long-term and working illegally on repeated tourist visas.
Fundamentally, though, it isn't up to you or me. Those countries have their laws. They made their decisions. They don't want that marginal money. It isn't up to a bunch of white foreigners to tell them they made the wrong decision and laws don't apply to them.
Both Thailand and Vietnam have recently (in the past 6-12 months) changed their visa system to try to get rid of these illegal workers.
1. My summary: it’s illegal to be a digital nomad on a tourist visa. My response: illegal doesn’t mean the law is sensible. You make no argument that it is sensible. We all accept the laws given to us. I’ve argued there is very little difference between a tourist and a digital nomad (within the limits pointed out). “It’s illegal therefore bad” is not a very compelling argument in any country.
2. My summary: Digital nomads don’t pay taxes and are not paying their way. My response: I have pointed out many ways that it surely makes economic sense to have foreign earners in a country even if they are on tourist visas.
Also, repeatedly bringing up “white” in your comments is borderline behaviour IMHO, and doesn’t do you any favours.
> $1,200 in tax from 4,000 digital nomads is...$5,000,000. Thailand's economy generates $500,000,000,000 a year.
How are you only measuring direct tax income? They're spending foreign earned income on Airbnbs, hostels, bars, restaurants, likely multiples more than the average local, to the point that many successful businesses in Southeast Asia would cease to exist without a steady stream of these people.
> want to optimize for people who want to stay long term, adopt their values, become part of the social fabric
These countries don't want these people as permanent residents. As other posters pointed out, part of the unspoken contract is that they're leaving at some point. They come, they spend, and they leave before they get old and sick. If they were really taking more in services than they spent into GDP, the visa situations would change very quickly.
> What's more, the arguments all have a whiff of colonialism to them.
Please go travel to an immigration office in a third world country and see if you feel like you're exercising your white privilege. Officials in these countries tolerate travelers to the point that they're making out economically, but know they are in control. There's no subservience.
> there are effectively zero digital nomads who aren't white men
Sounds like you need to get involved in different social circles. I've seen the split to be about 50/50 gender-wise.
> Please go travel to an immigration office in a third world country and see if you feel like you're exercising your white privilege. Officials in these countries tolerate travelers to the point that they're making out economically, but know they are in control. There's no subservience.
I disagree strongly with this one statement. White privilege is definitely a thing. I have been a white tourist in many countries, and “travelling while white” simplifies plenty of things dramatically, and you can get away with things that a normal local cannot. However, I would guess 95% of that is due to the assumption made by locals that white === tourist === wealthy. The simple ability to fly into some countries immediately shows you are relatively very wealthy compared to the locals. I have also got away with plenty of shit as a English speaking tourist in “white” countries (euro and US), so colour isn’t the only thing. I do try to be generally respectful when I am a guest in other countries. Also I’m not American, which helps a lot as they seem to have a bad reputation most places.... Tourist often gets you the same privileges: I’ve seen white and non-white tourists in NZ get away with batshit crazy shit!
I was in Canggu in feb and it was full of digital nomad types and pretty prosperous. I just looked it up the other day and the nomads/tourists are gone due to covid and the locals are broke and often have no food. I sent some money to a soup kitchen operation to help feed a few who used to have decent jobs. They were definately better off before.
This is an important point. What do anti-immigration people in the US complain about? Immigrants taking jobs and benefits. That's it. Digital nomads are doing neither.
That still doesn't make it right, but maybe it's a low priority problem for the government.
Also most of these countries (ie: Thailand) rely a lot on direct taxation and provide no services for foreigners. So they are not really leaching that much on government expense.
Working, traveling, and BRAGGING about it, is not cool.
Is it worth reading? It sounds like the ideas it teaches might be either outdated or just plain false at this point.
For some reason it reminded me of Trump's first book, The Art of the Deal.
They're both primarily selling the same thing, the glorification of the author's image.
This is exactly why it's so popular.
Even auth (okta, GSuite) is a commodity.
In the business of selling online? None I think, I don't see how dropshipping can fit in the future, what's the value of having a middle man that don't stock when goods producers can setup their own online shop or sell directly via Amazon?
It seems like this scenario wouldn't work so well without a middleman not stocking the product(s).
Can I rephrase your question as "what's the value in selling things on the internet, when Amazon already does that?"?
What I wanted to highlight was that nowadays given that producers can sell directly, or through Amazon if they can’t handle logistics, dropshipping has become irrelevant.
If you really want to work less and enjoy life more, the FIRE community (Mr Money Mustache is a good gateway) is a more sustainable/achievable path. The specific types of businesses that The 4-hour Workweek recommends (dropshipping, podcasts, Youtubing, blogging, consulting) are crapshoots. And we can't have a world where everyone's dropshipping and peddling their e-courses and newsletters to everyone else for a living - it makes no sense on a macro level.
It's still a fun, breezy read and opens your eyes to other possibilities.
IMO The 4-hour Body is way more useful and practical. Pretty much everyone who reads it can find something that will benefit them.
Now there's a growth market
NYMag but there's other sources - https://nymag.com/intelligencer/2017/10/you-can-rent-a-groun...
"There is one who pretends to be rich, yet has nothing;" - Pr 13:7
(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.)
Of course it meant thin margins, especially if you were getting print ads as well, but some people got it to work.
i can’t imagine what you were expecting
I don't see why we shouldn't judge marketers harshly, in general, and these folks in particular seem particularly unctuous.
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.
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.
Yes, because that didn't exist before. And what's with the wiki links to the commonly-understood terms? Condescending much?
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
[1] https://en.wikipedia.org/wiki/Private_military_company
[2] https://en.wikipedia.org/wiki/Offshore_financial_centre
[4] https://en.wikipedia.org/wiki/United_States_as_a_tax_haven
[5] https://twitter.com/JackHHazlewood/status/125618349776240640...
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.
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.
I hacked an oscommerce store and piped in inventory from my drop ship warehouses.
The side benefit was getting all my personal electronics at a discount.
Eventually dropshippers started going crazy low and disregarding MAP pricing so margins were super thin. Some distributers of mine even started direct to consumer sites and selling at the same or lower price as I could get from them.
I switched to selling products overseas to Italy that they couldn't get there. Also found some niche electronic products that had margins, manufacturer support (they dropshipped direct not via a distributor) and did well there. That was fun sourcing and marketing unique stuff I liked.
Outside of selling unique products, I did my best buying closeout or specials from my distributor in bulk and shipping orders overseas myself. Margins were very nice and fulfilling myself was easy.
If you have a business and a sellers permit then you can get setup with distributors. Petra was one I used back then. It's way easier to dropship nowadays, way more competition, terrible margins in general.
I never really set out to do it, just stumbled into it. I had a friend in the jewelry business that tipped me off on the potential so I started exploring the opportunity. I was in college and thought it an interesting real-world challenge compared to what I was working on in my classes. It ended up paying for my graduate degree and then some.
This was years and years before turnkey solutions. So I built my own. Everything was held together with ColdFusion MX 6, which I was a big advocate at the time and into that dev meetup scene.
After 6 months of development putting in tons of late night hours, things were fairly automated. I would scan daily email reports and any process exceptions, too, were emailed to me. I never achieved astronomical volume, but it made a decent chunk of change. Just ran on cruise control sustaining me and my family through graduate school.
I was an early integrator with the jewelry dropshipper. Orders and order status was communicated over FTP. Cue batch processing jobs. They are still around btw. At the time, they supplied most brick and mortar jewelry shops. Probably still do.
This, of course, was before social media of any kind, so my channel was eBay. I was an early integrator with eBay's new API built on something called SOAP. :) I hated it, but after complaining in their dev forums, eBay paid for travel and hotel to their conference in 2002(?) to give feedback in a private session with their developers. I have to give them credit, they were really trying hard to keep things simple and were sincere.
There wasn't anything like Stripe at the time, so I was one of Netsuite's first (very) small business customers just as they were beta testing online payments (iirc backed by Authorize.net). NS had a comprehensive CRM, order fulfillment, etc. solution. It is funny to think that NS was actually cheap relative to other offerings. Open sourced a ColdFusion implementation of the integration and a ColdFusion framework ( bothhosted on tigris.org... anyone remember that?). Both had users for a few years.
I built an e-commerce website (I sometimes go browse it still on WayBackMachine to reminisce) to try to steer purchases away from eBay to avoid fees. Was navigating the gray area of auction, buy it now, and linking back to my site. Sometimes would get reported for policy violation.
In the end, I didn't have budget to market outside of eBay, nor the entrepreneurial spirit to grow it, nor the inclination to bring in investors. My heart wasn't in it once the technical challenge wasn't there. A pattern I've unfortunately repeated over my career.
After my graduate degree, I sold it all to a local jeweler and transitioned it to them. They ran it for a few years to supplement revenue that their brick and mortar store was starting to lose because of online jewelers. I got paid for periodic work to fix a bug here and there. They shut it down in 2009 when their store went under. :(
Overall, it was a fun run. I learned a heck of a lot early in my career.
Worked well - but the problem is that it's easily repeatable because there's no regulatory capture, patents, large-startup costs or other things that makes it hard to start. I soon had competition that killed the margins.
Several people that did likewise wound up training their own competition - there employees would leave and mimic their business model.
So if you do this, or something like this, make sure your profitability event horizon is really short. Make sure you can exit the business without holding the bag of expenses or inventory.
That doesn't sound like drop shipping.
It worked OK, but wasn't lucrative at all, just a bit of side income while studying. Can't recall exact numbers, probably somewhere around $500 / month.
I feel like it’s someone who is fairly well known around here, and considering I have had an account for about 10 years I feel sort of embarrassed that I don’t remember their name.
Based on another article (https://bizshifts-trends.com/stupidity-in-business-a-fine-li...)
I don't know if the TV mount person is David Wurtz, or someone he met.
Article here: https://web.archive.org/web/20091215031722/http://blog.david...
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?
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....
This is a unique way of describing the sounds of a hot tub.
Is this right? I was definitely using Power Editor prior to 2015, and am almost sure that Ads Manager predated it.
I am very bearish on the future of this industry, with de-globalization, trade wars and the ever expanding reach of Amazon.
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.
Besides, payment platforms don't mind if there are chargebacks and refunds. _They_ still get paid.
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.
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.
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.)
The locals definitely refer to them as 'expat' or something along those lines in local vernacular.
And it's generally a Western thing, not just American or Anglosphere.
These people are completely unlike immigrants, there's almost no comparison.
If someone married a woman from Bali, moved in, was working as a manager in her Father's factory ... the term 'immigrant' might apply.
Most ex-pats are temporarily stationed, they are not there permanently, they work for international conglomerates, governments, news agencies, universities. The 'drop shipper' thing is a little specious but roughly in that category.
It's definitely an 'anglosphere' term though that gets used for people from the US/UK/etc... living in other countries.
The only other language I speak well, Italian, doesn't really have an equivalent term.
> Think the difference is that an expat makes his wealth from outside that country he migrated to and Immigrant makes money from the country they migrated to.
None of this stuff is an official definition, but this seems to be how most people essentially mean the term, or rather what happens to be true when they use it.
I'm basically a permanent traveler. I might spend years at one location working remotely. Calling myself an immigrant really seems to lack some important distinctions that explain my situation compared to a visa worker.
Even when I'm technically an immigrant and an expat is just an expatriate, there's more nuance to how we use the terms. And to me it comes down to power: when my fun is over, I just buy a ticket home.
I’d say that you’re a migrant, but that brings a connotation of poverty and manual labor that’s probably not correct.
I don't agree that this is at all universal, I moved to a (marginally) more expensive country for a local job, and am still definitely considered an expat. And while it's not an official term, there are plenty of companies targetting people like me, "expat mortgages" and so on. For them they can target their market, for us it means that we know they'll be good enough speaking professional English.
> And to me it comes down to power: when my fun is over, I just buy a ticket home.
This rings more true however. I think if you still have some feeling of "I'm likely to go back some day", rather than putting effort in to learning the language, making local friends, and possibly putting down serious roots, that's more expat-like.
Alien - an immigrant(non US citizen) living inside USA
The USCIS, DHS and all other immigration related offices use the word 'Alien' to define an immigrant in USA who has not become a citizen yet.
An immigrant is somebody who moves to a different country and works for a local company (which might be the same one as the one they worked for in their home country) with a local salary and benefits.
Expats often transition into immigrants.
Being a citizen is not a part of the equation. I've been an immigrant for decades, but I'm not a US citizen.
I've never seen a definition of expat that depends on citizenship.
Made me chuckle.
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.
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.
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.
Partly, it's that the "expat" ones tend to be working in a bank for a year or two, and just talk about money, but I also think you're exactly right about the unspoken assumption. When I meet "expat" British people I feel like I'm one step away from a comment like, "oh, you actually like the pickled fish? I haven't dared to try it myself" or, "no, we don't really like the beaches -- too much nude sunbathing".
And this is in Denmark. Further away, this presumably translates to living in a compound, sending the children to a British private school and a social life revolving around the English Pub.
French and German friends have grumbled about emigrants like this from their countries, but I'm unlikely to meet them. Last year I was given a menu in "Nordic" in a restaurant in Greece, based on the brand of backpack I was carrying -- it turned out there was a Danish/Swedish/Norwegian "enclave" nearby.
¹ And Canadian, American, Australian, and to a smaller extent New Zealand or Irish -- they exist, but there are more British people here than all the others combined.
I don't know if there's a racial component but thinking about it more, people I've heard described as ex-pats are basically always white in a non-white country. I've never heard anyone use it to refer to Asian non-citizens working here in Australia for example, even if they technically meet the criteria.
I think the Indians use it through knowledge of British usage, and some British people use it in a slightly snobbish way wherever they are. "Oh, we're expats. We'll go back to England before Rupert starts school."