Hacker News Reader

> Shopify's business model encourages people to build dropshipping sites, there are literally hundreds of thousands of them. They promote plugins like Oberlo[1] that let you import products directly from AliExpress into your store to markup and dropship. They have blog posts[2] that teach you how to dropship.

That's explicitly brought up in the article:

>> These schemes are very easy to set up. Shopify has a number of helpful tutorials on how to do it. [these were inline links] And the margins on them can be quite significant if the customer doesn’t realize the brand is just a front. For example here’s a shirt Vincere is currently selling for $99, here’s the same shirt on AliExpress for $16. That’s a markup of 500%.

> I think the bot issue is highlighting that these "scammers" have figured out a way to automate driving sales through influencer marketing. However, any dropshipper could do the same thing manually, and some likely are. Influencer marketing is basically sending influencers your products to promote, in this case they are asking them to purchase, but they are still getting real products. Is that a scam?

Also brought up in the article:

>> Then on top of that if by chance someone does use your ambassador code to buy something, most of these brands do not have any affiliate marketing infrastructure… so they pocket your promised commission too.

EDIT: Also, later in the article, she discusses the second layer of scamming here, which is botnet operators scamming the dropship scammers.

Scam is probably not the right word for dropshipping. Though dropshipping does seem like a parasitic activity that captures the energy and capital of the dropshippers in order to increase prices.

The scam in this article seems to be the bots that try to trick would be Instagram influencers into buying merchandise to sell to their audience. As I understand it the bots are really just trying to convince the influencers into buying the goods themselves and the influencers don't get any cut of whatever product they do sell.

There is a huge dfference between dropshipping the business and dropshipping the supply chain model. The first one degenerated into a get-rich-quick-on-the-internet scheme, with scammers, caches and everything in between. The latter is a very valid, and less than trivial, supply chain model, an especially well suited one for eCommerce. Used properly, it can be a net win for the vendor as well as for the seller.

> if you are foolish enough to pay markup on items that you could order yourself directly from AliExpress that's your own problem

How do you expect the average consumer to automatically know if a product they’re looking at is being resold from AliExpress?

>How do you expect the average consumer to automatically know if a product they’re looking at is being resold from AliExpress?

I think that's probably a good question most of the time. On this site (vincerewears.com), though, it's pretty obvious.

First, the t-shirt is priced at $99, with no notion of brand or why you might pay $100 for a t-shirt. Next, it has this warning on the product page: "CLOTHING ARE ASIAN SIZE. KINDLY CHOOSE 1-2 SIZE BIGGER FROM YOUR US MEASUREMENT."

And this on shipping policy: "In regards to shipping, we are still offering free worldwide shipping to nearly all countries, however there will be delays. Our usual delivery time is 15-40 business days, however please allow up to 60 business days for delivery."

So, 60 business days is, ugh 12 weeks? 3 months? Heh.

My record is 6+ months last year. Thermal labels don't hold up well to weathering and offgassing plastic contents. Good on my local postal service for making out the address anyway and getting it to me.

For me, it took almost as long to get a 980 when they were still new. It got shipped through Australia. I live in Austria.

Which is one of the MANY reasons I mostly use "Austria, Europe" in conversations nowadays.

I had the opposite experience last year - a book shipped from Dallas to Australia through Los Angeles and Austria (19 November to 25 February). Maybe I could have specified my address as "Australia, Southern Hemisphere".

https://twitter.com/elahieh/status/1364818600486338560

At least it isn't as bad as slovenia and slovakia

http://www.slovak-republic.org/slovenia/#politicians

Weirdly enough the longest shipping times I have in central Europe are everything related to the US. We ship everywhere basically within at max 2 weeks. Canada, Singapore, New Zealand, South Africa, no problem. We receive cheaply shipped packages from China, India or Singapore within on average 3 weeks.

But we had letter sized priority shipments to the US that took 3 months, on average about 3-5 weeks at times!! Shipments from the US that took about as long too.

No idea what happened in the beginning with Corona. But from my POV it seems the postal system is broken over there.

EU<->North America airspace was basically closed. Took a while to make-up the cargo space of cancelled passenger flights going back-and-forth.

Didn't help that people bought more and more online and would order inter-continentally if they had to (I know I did!).

I understand that. However everywhere else it took maybe a week more and only for the first few months.

Does that really explain why the US is still having these problems? My guess is that the system is overwhelmed either way. Flights from and to China also were massively less, yet the worst delay we had with china was like 1 week. And today it is on average a week less than before Corona, because most postal systems were actually able to grow and better themselfs in that time.

It took me 18 months to receive a camera for an embedded device I'm building. I had ordered multiple last January and just wrote off one that never arrived. That one finally arrived about a week ago - I was shocked and delighted.

Sometimes the exact same thing is sold on AliExpress under a different brand. The IG brand is just a label on a mass-produced product but they to offer it as "artisanal" or "hand-made" to get a markup.

Reminds me of back in the day when everything was mail order, “please allow 6-8 weeks for delivery”. Now if it takes longer than 2 days, we riot xD

They can spend time discovering the product and then price-shopping to find that AliExpress has the best deal, or they can pay the premium of the dropshipper to skip all that and just get the thing they want right now.

>just get the thing they want right now.

This particular site (vincerewears.com) has guidance that usual shipping times are 15 to 40 business days, but to expect 60 business days (3 months).

Dropshipping implies not keeping stock and just ordering somewhere else on your behalf. Re-sellers that keep stock are just called importers.

>How do you expect the average consumer to automatically know if a product they’re looking at is being resold from AliExpress?

Google Lens/image Search on an image or screenshot is often pretty good for this. Whether that's reasonable for the average consumer I don't know.

No serious seller has a 3-6 weeks delivery time to Europe. Except they sit in the US In which case they should have shorter shipping to the US at least.

That seems like a business opportunity! Find identical products on AliExpress/Alibaba/TaoBao etc.

>well if you are foolish enough to pay markup on items that you could order yourself directly from AliExpress that's your own problem.

if you are foolish enough to not spend lots of time on entrepreneurship/startup blogs to know all about drop shipping then shame on you dummy!

You actually think that startup blogs on dropshipping are written to make others rich.

> I feel like the author is implying that dropshipping is a scam, well if you are foolish enough to pay markup on items that you could order yourself directly from AliExpress that's your own problem

A lot of people hate on dropshippers because they markup prices and take months to ship a product from China. BAD dropshippers do this. A good dropshipper will find demand for a product and bring it to where the customer likes to go and make sure shipping is short by choosing US suppliers (for US customers).

In reality, when you go to Target, you are also buying things at a markup. Why buy something for $10 when you can find it online for $7? Because it's fucking insane to expect people to constantly do pricing and quality research to save a few bucks.

I feel like the next innovation in dropshipping will be when places like Oberlo and Spocket make it easier for dropshippers to do quality control. They already make it easy to find products with fast shipping times.

How does the drop shipping work? If I order from a drop shipper site; as a customer I wouldn't expect to need to pay any custom charges but if they directly ship from the manufacturer won't I get charged?

> if they directly ship from the manufacturer won't I get charged?

You do get charged. The drop shipper just charges a lot more for the same item that you could order on Amazon for less.

If dropshipping was to be used as valid fulfillment method, e.g. what Amazon is doing without customers even realizing it, the customer will not get charged anything. Because either the goods are already imported by the supplier of e.g. Amazon. Or because the dropshipping seller is the importer of record and wll be charged with tariffs and so on.

In both cases, the tariffs already figure into the price. Dropshippers are no different, except for having gratuitously higher mark-ups.

Amazon is a bad example as there is plenty of people using it to dropship directly from China too, just with a lower average price.

Just like Wish Amazon is far from direct.

Edit:// because people always seem to think Amazon automatically has good pricing. Things that don't sell so often and are amazon warehoused have a recurring cost for the seller. Who do you think is paying that? Some categories still have a 300% or more markup on Amazon.

Yes, yes, pedantically speaking of Amazon the business this is true. Rhetorically speaking of Amazon the metaphor for cheap online stuff, who cares? Would anyone have felt the need to "well ackshually" me of I'd written "Walmart"?

I never heard 'Amazon' as metaphor for cheap stuff honestly. Here in Switzerland it's almost always the more expensive option. It just has everything.

However sorry if this somehow was not polite.

I ended up going to Digitec online shop and its shop :)

Exactly :) honestly I am so thankful that Amazon has zero dominance and we have actual hard working, tax paying, businesses providing an amazing service

I avoid dropshippers and dislike the business model from both sides. (it's horrible as a seller too as you have no real control)

However dropshipping has positives for the customer. Within Europe they suddenly are protected with our customer protection laws which they wouldn't buying from Asia. They can just return and get their money back. Or be certain that a broken item could be returned.

Same reason people buy their phones locally with a huge markup instead of buying the 2sim version directly in Asia for 100$ less.

That said most dropshipping goes far above a fair markup these days

> if you are foolish enough to pay markup on items that you could order yourself directly from AliExpress that's your own problem

It's not necessarily foolish, they're providing market-knowledge arbitrage which has value. If the reseller made me aware of the product in the first place and I'm willing to their price then the premium was the price I paid to not have to discover the product on my own, and to not have to bother with price comparison shopping.

I know $15 is an agreeable price and I can buy it right here right now instead of spending 30 minutes comparing vendors to find that I could save $5 on AliExpress, or just never having it at all because I didn't know about the product.

Dropshipping itself looks totally legitimate, and there's market value of selling things for a small markup. The scammers in this case are doing a 500% markup.

That discrepancy should be addressed by the original company. If people are willing to pay 500% more they've been leaving money on the table and should increase prices until the dropshippers are again only capturing the value that they're adding.

They're getting 500% markups by scamming influencers into joining fake affiliate programs.

> market-knowledge arbitrage which has value

I'd pay to not hear that phrase ever again. That's not value, that's nonsense.

In plain English, that's "introducing you to a product you wouldn't have known about otherwise", and yes, if they convince someone to buy a $99 T-shirt, this service had value for the buyer.

The negative externalities come from the fact that very few people will buy random unbranded $99 T-shirts on a whim, meaning they need to spam a million people to find the one or two buyers in the haystack.

It's not wrong tho. There are categories on AliExpress where there are like 20 similar products but only one does what you actually expect it to do.

Ex. Clothing sizing is a big issue there. Or real CE signs. If I have to compare 20 products myself and only add the good one to my store I definitely added some value for customers

Also as said somewhere else local customer protection laws apply to dropship stores, but not AliExpress

Clearify:/ I don't dropship. But I know the game

A lot of talk on HN about drop-shipping lately, wondering what it is exactly? Why its good / bad?

It’s when you essentially forward a product from the manufacturer, typically somewhere in Asia. All the drop shopper is doing is providing a digital store front, and the goods are piped directly to you from the overseas supplier. There is no value add or special thing about the product; you could order it from the supplier yourself for much less at the expense of (sometimes) waiting longer.

>There is no value add or special thing about the product; you could order it from the supplier yourself for much less

While otherwise true, I hate to say it but this point misses something.

There is definitely a value-add in marketing something to someone who wants it. There are tons of products (especially fashion) that people might be interested in but don't know exist. This is the most benevolent thesis of the entire marketing field. As scummy as marketing can be, there is definitely some value in curating a basket of stuff and generating a commission on the sales lead.

What the markup is, of course, can really color the palette, but I don't see anything inherently wrong with marketing. This whole scenario is a lot more on the astroturf side of the scale, but social media is a lot of astroturf in some respects.

The "value add" is the dropshipper spending money make a "pretty" front end, and advertising/scam bots to make you aware of the products... I guess.

They are providing marketing and a sales channel aren't they? At the least a referral service. If it were such a well known product this would be arbitraged away.

There is some value added. Customer protection and return laws. At least for Europe run shops.

Or do you buy your electronics directly in china?