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What is “dropshipping”, a practice that sells good products twice their price?

Cheap gadgets, brands as unknown as the sites that sell them, sites that exist by the thousands but do not hold any of the products they offer. Welcome to the wonderful world of dropshipping, where everyone is a winner. Except maybe the client.

It’s an entrepreneurial story that’s warm to the heart

That of Thibault Belaire, a young French engineer, passed by the ranks of a global smartphone giant. A giant he left, dissatisfied with the quality of the components used by the brand. Since then, Thibault has taken his destiny into his own hands: he has created his own brand, his own smartphone, a very high quality device, but really affordable, the One X Pro, which – it falls right – is just in promo these days -this. Here is in a few lines the story that tells a long advertisement on Youtube, a beautiful story … entirely wrong, unfortunately. It does not mean that some details put the bug in the ear. Perhaps the somewhat muddy explanation of a price pulled down “because the brand does not advertise”, necessarily surprising when you hear it … in an advertisement on Youtube. The fact also that at no time this valiant entrepreneur appears in the picture. And the fact that no, even talented, an engineer in his garage can not invent a smartphone alone.

Dropshipping, or parasitism as an economic model

In fact, all the sites that try to sell this phone under the name of One X Pro (and they are many) do what is called dropshipping. Basically, the system is an ease designed to simplify the work of online merchants, and shorten the logistics circuits: rather than maintain a stock of products to sell, a site can ask his wholesaler or the manufacturer of a product to ship directly to the end customer. No need to manage inventory or packages, they go directly from the producer to the consumer. But while developing, the principle has also been misguided. Today, there are dropshippers who have their own site, most often open on an e-commerce site creation platform, such as Shopify or Magento, but many also sell live on eBay, LeBonCoin, the marketplace. Amazon and elsewhere. To attract new customers, they spend advertising, mainly on Youtube and social networks. The game often consists in selecting an object, a gadget that is envied, and selling it – even if it means hiding its real name and brand – through targeted ads, or through links to real / fake blogs that promote merits of the product. Product often sold much more expensive than its real price. One example among a hundred: this smart entry-level watch, offered “promo” at 60 euros on dropshipping sites, against fifteen euros for its real price on AliExpress. For the consumer, the price is not the only disadvantage of dropshipping: in case of breakdown or worry of delivery, return to the seller will rarely be very fruitful. Your defective item is likely to stay on your arm.

A connected watch offered at 60 euros on dropshipping sites on the left, against 15 euros for its real price on the right.

When in doubt, the best advice we can give you before buying is to try to go back to the source. For example, you can save the image of a product and search for it on Google Images to see where it comes from. Even more effective: In most cases, checking the price of a product on AliExpress will help you shed light on an inflated price. To do this, using the mobile application AliExpress, you can take a picture of the article, and compare it to the millions of items that the platform has for sale, the largest marketplace in the world, which you will tell at what price the dropshipper will touch the item he wants to sell you. And that you can then buy live, without his intermediary.

Dropshippers first victims of the hustlers

In a few years, dropshipping has developed even faster than the rest of e-commerce, to the point of becoming a small industry, which has its channels, its codes, its platforms. Some wholesalers have become specialists in the genre, helping sites select the best gadgets. Difficult to throw the shame on an entire sector, there are among the dropshippers honest people, who manage the best sites specialized in fashion articles, accessories for children, fitness, animals … Sellers honest, with honest margins. But not enough to hide a gold rush atmosphere that smells of sulfur, and often the scam. As many of those who believe in finding their new job, or a lucrative back-up activity, testify, those who earn the most money are often those who provide tools, advice, advertising and training for beginner dropshippers. Nothing very surprising. As with every gold rush, the winners, in the end, are the salesmen of shovels.

Also published on Medium.

Published inE-commerce

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