Dropshipping: Hustlers making millions from goods they never handle(bbc.com)
bbc.com
Dropshipping: Hustlers making millions from goods they never handle
https://www.bbc.com/news/technology-53759932
119 comments
Dropshipping as described in the linked article is bullshit. People are not likely to have long term success selling to Americans online if the customers have to wait some undetermined amount of weeks for the goods to come across the ocean.
However, there are plenty of legit dropshippers that sell items already on this side of the ocean. You are probably familiar with Wayfair, but may not know that they were almost 100% drop ship at one time.
A couple years ago, most products sold on their site were still drop shipped, though they were beginning to get some warehouses to hold inventory.
I have done ecom for dropshippers that sold things like furniture, lighting, bean bags, jewelry, and security systems, where the companies were run from one or two room offices and the products shipped from other companies' warehouses in the USA or Canada.
It's very doable once you get the relationships in place. That's not trivial, since these manufacturers and distributors do not make it known that they are willing to drop ship, and they will only do it if you can convince them that you have a legit business already running, but if you get a legit business running and start talking to sales reps, you can absolutely move $500K+ USD worth of product per month without ever looking at it.
However, there are plenty of legit dropshippers that sell items already on this side of the ocean. You are probably familiar with Wayfair, but may not know that they were almost 100% drop ship at one time.
A couple years ago, most products sold on their site were still drop shipped, though they were beginning to get some warehouses to hold inventory.
I have done ecom for dropshippers that sold things like furniture, lighting, bean bags, jewelry, and security systems, where the companies were run from one or two room offices and the products shipped from other companies' warehouses in the USA or Canada.
It's very doable once you get the relationships in place. That's not trivial, since these manufacturers and distributors do not make it known that they are willing to drop ship, and they will only do it if you can convince them that you have a legit business already running, but if you get a legit business running and start talking to sales reps, you can absolutely move $500K+ USD worth of product per month without ever looking at it.
Everything about dropshipping reads like a pyramid scheme
You don’t buy the product and store it, you just find the customer and the distributor mails it directly to the customers, not you.
In a pyramid scheme, you would be buying the product and holding onto it.
In a pyramid scheme, you would be buying the product and holding onto it.
In a pyramid scheme you would be tricking others into buying junk for "their own businesses" to sell to other people.
Drop shipping is nothing like a pyramid scheme. It's just a form of arbitrage. You buy from one party for less money and sell to another party for more.
Unless you started early enough, like a decade ago, or are unusually lucky, it seems like the only way to make money starting a business is to create a course that promises to teach others the secrets of making lots of money with a business. Bonus points for standing next to an expensive car and holding a wad of cash for the promo photo.
Of course if starting a business was so lucrative, they’d be doing that instead of bilking hopefuls with their expensive courses on Udemy or wherever.
Of course if starting a business was so lucrative, they’d be doing that instead of bilking hopefuls with their expensive courses on Udemy or wherever.
> it seems like the only way to make money drop shipping is to create a course that promises to teach others the secrets of making lots of money with drop shipping
This sounds very lucrative. Are there any courses I can take, which would teach me how to make lots of money by creating courses for others?
This sounds very lucrative. Are there any courses I can take, which would teach me how to make lots of money by creating courses for others?
Ha, in all seriousness, I recently saw one of those awful ‘10 easy ways to make money online’ articles, and literally the first way was to create an ebook or course explaining how to make money online. And so the cycle of crap continues.
I was looking at vanlife content on YouTube a few months ago, and of course the people who end up on YouTube are the "influencer" types. And how do they make money although all they seemingly do is travel in their van? They make content for social media, and of course, they'll sell you an online course on how to live their lifestyle...
I almost got scammed when looking to buy a miter saw from a big box store. I went to the websites of Lowe’s and Home Depot after doing some research, and seeing lots of reviews on the product by different accounts saying it was $200 cheaper in other places (but not saying where - that’s the interesting thing!). Searching for the model number brought me to a couple places that were selling at the price touted by the reviewers. On one of the sites I got as far as the PayPal checkout button, but didn’t pull the trigger until emailing. Couldn’t find contact info aside from a web form and realized what was going on. Interesting tactic.
Still need one? Happy to help with the best price you'll find on powertools, handtools, or consumables. Drop an email address if interested.
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The odds of making a killing on dropshipping seem to be similar to those of making it as a rockstar, with a small but real number of people ending up making it as a session musician asa consolation prize
This is way less work than being a session musician for your beer money, though.
The session musicians I know and the people with successful drop shipping niches I know tend to work about equally hard and get paid about the same amount. I don’t know anyone who’s able to keep a drop shipping business going “passively” given the intense competition
The biggest issue I found when I tried dropshipping around a year ago, was the insanely long shipping times. I'm not sure how people get around this problem (who wants to wait 10 days+ for sometime they liked on instagram to arrive?)
Maybe nowadays there are some solutions around this? Any dropshippers would like to share their feedback on this?
Maybe nowadays there are some solutions around this? Any dropshippers would like to share their feedback on this?
A large thread from a few months ago: https://news.ycombinator.com/item?id=23041138
I used to sell a particular 3M product via the mail. I generally did not drop ship it, I ordered it in bulk from a wholesaler and then sold it on eBay, as well as on a website I maintained, which ran a heavily modified version of osCommerce.
Buying this one item, which I knew had regular demand, from a retailer allowed me to offer a price which was competitive, but from which I could also make a small profit. With dropshipping, I was competing against others who could drop ship the same items, so I could not offer as competitive a price, nor have any kind of margin.
I used dropshipping for two scenarios. One was if I traveled and was unable to ship out the item I had in stock. In this scenario, I would drop ship the item and lose any margin (or sometimes even take a small loss).
The other scenario was to test new items to sell. My main wholesaler (which I bought my 3M bulk item from) could drop ship a catalog of items at a decent rate from their one watehouse. I also had accounts with two larger dropshipping wholesalers, both of whom had multiple warehouses with mostly the same catalog in stock - with items more likely in stock, but at a higher markup.
So what I did was for through my main wholesaler's catalog and see what items they had. I then checked that both other wholesalers had the same item in their catalog, and that all currently had the item in stock. Generally my main wholesaler would drop ship for the lowest rate. So I put the item up on my website, at a break even price. I did this for many items.
Sometimes I would have a sale. Often my main wholesaler still had the item in stock. I would break even on the sale, but would know there was demand. Sometimes they would be out of stock - then I would drop ship from one of the two backups and lose some money on the sale. Maybe I would increase my sale price until I knew my main wholesaler had the item in stock again.
As margins were small, one goal was to sell more and increase margins. If I bought boxes, tape and shipping labels in bulk, my margins increased a few cents per sale - I could decrease the sale price (and increase sales doing so) while also increasing my cut a few cents. This worked for a number of things - with $3,000 a month in sales my Payapl fees would drop, with $10,000 a month in sales they would drop even more. This would also allow me to offer more items at a competitive price.
I'm not sure how it works nowadays. One lesson I learned was what to do when you succeeded. I got to where I was shipping several items a day and making a small margin, and had the opportunity to ship even more. But it would then outgrow my closet space - I would need to rent some warehouse space or something to receive shipments and store items. Also, as sales grew, I spent less time programming my web site, and more time putting items in boxes, taping up boxes, weighing boxes, printing out shipping labels to attach to boxes etc. I figured I eventually would have to hire someone part time to ship items out during the week. By then I was familiar enough with the business to decide I did not want to make this leap, and decided to wound down my business. Actually I stumbled out of the business like I stumbled into it - my friend had some familiarity with some of these wholesalers, knew I could sell online and suggested I try it out, which I did.
Buying this one item, which I knew had regular demand, from a retailer allowed me to offer a price which was competitive, but from which I could also make a small profit. With dropshipping, I was competing against others who could drop ship the same items, so I could not offer as competitive a price, nor have any kind of margin.
I used dropshipping for two scenarios. One was if I traveled and was unable to ship out the item I had in stock. In this scenario, I would drop ship the item and lose any margin (or sometimes even take a small loss).
The other scenario was to test new items to sell. My main wholesaler (which I bought my 3M bulk item from) could drop ship a catalog of items at a decent rate from their one watehouse. I also had accounts with two larger dropshipping wholesalers, both of whom had multiple warehouses with mostly the same catalog in stock - with items more likely in stock, but at a higher markup.
So what I did was for through my main wholesaler's catalog and see what items they had. I then checked that both other wholesalers had the same item in their catalog, and that all currently had the item in stock. Generally my main wholesaler would drop ship for the lowest rate. So I put the item up on my website, at a break even price. I did this for many items.
Sometimes I would have a sale. Often my main wholesaler still had the item in stock. I would break even on the sale, but would know there was demand. Sometimes they would be out of stock - then I would drop ship from one of the two backups and lose some money on the sale. Maybe I would increase my sale price until I knew my main wholesaler had the item in stock again.
As margins were small, one goal was to sell more and increase margins. If I bought boxes, tape and shipping labels in bulk, my margins increased a few cents per sale - I could decrease the sale price (and increase sales doing so) while also increasing my cut a few cents. This worked for a number of things - with $3,000 a month in sales my Payapl fees would drop, with $10,000 a month in sales they would drop even more. This would also allow me to offer more items at a competitive price.
I'm not sure how it works nowadays. One lesson I learned was what to do when you succeeded. I got to where I was shipping several items a day and making a small margin, and had the opportunity to ship even more. But it would then outgrow my closet space - I would need to rent some warehouse space or something to receive shipments and store items. Also, as sales grew, I spent less time programming my web site, and more time putting items in boxes, taping up boxes, weighing boxes, printing out shipping labels to attach to boxes etc. I figured I eventually would have to hire someone part time to ship items out during the week. By then I was familiar enough with the business to decide I did not want to make this leap, and decided to wound down my business. Actually I stumbled out of the business like I stumbled into it - my friend had some familiarity with some of these wholesalers, knew I could sell online and suggested I try it out, which I did.
Are these revenues or profits?
"the fool and his money are soon parted"
This has become quite a phenomenon due to the rise of the 'influencers' and a generation that blindly follows them.
Even though this method may be legal, the onus is on the people to look for something like BBB certification, and this new certification, whatever form it may be, should be nimble and easy to initially obtain, and fast to update by the consumers.
This has become quite a phenomenon due to the rise of the 'influencers' and a generation that blindly follows them.
Even though this method may be legal, the onus is on the people to look for something like BBB certification, and this new certification, whatever form it may be, should be nimble and easy to initially obtain, and fast to update by the consumers.
This is why I value Amazon reviews so highly.
Amazon is ridden with shill reviews. Most reviews on amazon cannot be trusted
For sure, but as far as I'm aware, you can't directly buy your way to the top spot. In my experience, the products that earn it have been high quality backed by good customer service.
Have you tried fakespot.com?
I used that a while back out of curiosity. I used to write fake reviews in exchange for products (Sorry everyone, I don’t anymore!) because it was a free way to get products related to my hobbies.
Most of the reviews I knew were fake, it said they were fine. I wouldn’t trust it for anything expensive.
Most of the reviews I knew were fake, it said they were fine. I wouldn’t trust it for anything expensive.
I agree regarding Amazon reviews.
What if there is an independent 3rd party company that is able to collate the reviews from verified purchases from different vendors like Amazon, Walmart, etc.
Not sure of the business model.
What if there is an independent 3rd party company that is able to collate the reviews from verified purchases from different vendors like Amazon, Walmart, etc.
Not sure of the business model.
Consumer reports goes a step further and tests products. People have to be willing to pay for reviews.
Imagine thinking BBB is anything more than Yelp.
Unless I've been reading absolute bullshit my entire life...
The BBB is and always has been a literal "you give BBB money, we give you good rating - no money, no rating/bad rating"
They had good enough PR that they made themselves look like an official government/whatever else trustable entity...
They're literally just a private business with a name that was good enough to fool people into thinking they're legit/worth something.
Can somebody correct me on this? Am I crazy?
The BBB is and always has been a literal "you give BBB money, we give you good rating - no money, no rating/bad rating"
They had good enough PR that they made themselves look like an official government/whatever else trustable entity...
They're literally just a private business with a name that was good enough to fool people into thinking they're legit/worth something.
Can somebody correct me on this? Am I crazy?
> 'It's very easy to take the moral high ground, but if a lot of people had the skillset and were making tens of thousands of dollars profit a day, then they would probably think pretty differently'
I imagine this is the way most criminals rationalize their work.
I imagine this is the way most criminals rationalize their work.
That quote sickens me, such a tragic waste of oxygen.
Worse still, he believes others might share in such an abhorrent world view except they simply aren't "skilled" (haha, yeah right) enough to be scam artists.
I've filed a complaint with the BBC, because on top of being purely terrible, this is also blatant self promotion and offers nothing of value to the article.
Worse still, he believes others might share in such an abhorrent world view except they simply aren't "skilled" (haha, yeah right) enough to be scam artists.
I've filed a complaint with the BBC, because on top of being purely terrible, this is also blatant self promotion and offers nothing of value to the article.
What does the self promotion look like?
It's probably more like 'dumb morons will just waste their money on other worthless consumption anyway', which is not wrong for people buying every IG promotion.
Ok another clickbait and shallow article. HN needs to stop promoting these. Dropshipping in itself is nothing wrong. Dropshipping with the intent of defrauding people and selling counterfeits is what is wrong. Why cannot the writers of these articles be precise and responsible in choosing the title of their articles? With one stroke of pen they malign a whole group of people without any second thoughts.
> Dropshipping in itself is nothing wrong. Dropshipping with the intent of defrauding people and selling counterfeits is what is wrong.
That is already exactly what the article says.
> All this is legal and often done well. But the anonymity it confers means there is also abuse.
That is already exactly what the article says.
> All this is legal and often done well. But the anonymity it confers means there is also abuse.
Okay but the title is worded like Dropshipping is inherently wrong and thus "poisons the well".
Are we reading the same title?
> Dropshipping: Hustlers making millions from goods they never handle
And who are you quoting? The article doesn't include the word 'poisons' at all.
> Dropshipping: Hustlers making millions from goods they never handle
And who are you quoting? The article doesn't include the word 'poisons' at all.
The word "hustler" has fairly negative connotations, and "goods they never handle" implies they're not doing real work or adding value.
Most people view arbitrage as kind of scummy unless there's some actual value-add. In many cases, there is some, like using domain expertise to find cheaper or more reliable versions of the same product, or the time-cost of finding sales. Those are things that people are often fine paying a nominal markup for as long as it still presents a better deal for them. But that's not always the case, obviously. There's a reason why "cutting out the middleman" is a popular phrase.
Most people view arbitrage as kind of scummy unless there's some actual value-add. In many cases, there is some, like using domain expertise to find cheaper or more reliable versions of the same product, or the time-cost of finding sales. Those are things that people are often fine paying a nominal markup for as long as it still presents a better deal for them. But that's not always the case, obviously. There's a reason why "cutting out the middleman" is a popular phrase.
Yes. That title is worded like the problem is dropshipping, or making money from goods you don't handle, rather then the hustling/fraud.
I put "poisons the well" in quotes to indicate it's a stock phrase: https://en.wikipedia.org/wiki/Poisoning_the_well
I put "poisons the well" in quotes to indicate it's a stock phrase: https://en.wikipedia.org/wiki/Poisoning_the_well
The question I'd ask is can a dropshipper avoid selling counterfeits? They never inspect the product for QC. How do they know when the exporter is being dishonest?
Dropshippers don't _have_ to be exporters; there's plenty of companies that will handle an order on your behalf that are based in the US/UK/EU/<insert your country here>. Isn’t this just retail?
It is, and that's what dropshipping was from the start. People negotiating with manufacturers for shipping direct from their warehouses.
What you see with the "hustler" dropshippers now is that they are buying from an additional middleman, who is the equivalent of a bucket salesman in a gold rush. Dropshipping existed before Amazon, but Amazon took over fullfilment, and these other middlemen became the suppliers for the people trying to get rich quick with dropshipping.
What you see with the "hustler" dropshippers now is that they are buying from an additional middleman, who is the equivalent of a bucket salesman in a gold rush. Dropshipping existed before Amazon, but Amazon took over fullfilment, and these other middlemen became the suppliers for the people trying to get rich quick with dropshipping.
Yes absolutely. There are plenty of dropshippers that have relationships with manufacturers and wholesalers that only buy from the authentic manufacturer.
Multiple fallacies in this thinking, see https://thezvi.wordpress.com/2019/12/29/perfect-competition/
> The question I'd ask is can a dropshipper avoid selling counterfeits?
The original concept of dropshipping was that you'd get a product manufactured (or would sell a white-label product, or would be a reseller for a large company), but the product would go straight from the manufacturer to the consumer without having to stop at your own warehouse.
It makes a lot of sense in lots of businesses and has no reason to yield counterfeits, it avoids having to hold stock (so your costs are lower which means you can sell for less, or can leave more to the manufacturer) yet the product doesn't have to stop by your warehouse so the buyer waits less.
Many sellers or designers don't manufacture their products, they contract the manufacturing to a company with those capabilities (often in SEA), they might QA every piece initially to make sure everything's ship shape, but once every kink has been worked out they only need to sample to ensure the product conforms to expectations (or separately contract on-site QA at the manufacturer), they don't need to personally inspect every product.
At that point, if the manufacturer can drop-ship, chances are it's a win for everyone.
The original concept of dropshipping was that you'd get a product manufactured (or would sell a white-label product, or would be a reseller for a large company), but the product would go straight from the manufacturer to the consumer without having to stop at your own warehouse.
It makes a lot of sense in lots of businesses and has no reason to yield counterfeits, it avoids having to hold stock (so your costs are lower which means you can sell for less, or can leave more to the manufacturer) yet the product doesn't have to stop by your warehouse so the buyer waits less.
Many sellers or designers don't manufacture their products, they contract the manufacturing to a company with those capabilities (often in SEA), they might QA every piece initially to make sure everything's ship shape, but once every kink has been worked out they only need to sample to ensure the product conforms to expectations (or separately contract on-site QA at the manufacturer), they don't need to personally inspect every product.
At that point, if the manufacturer can drop-ship, chances are it's a win for everyone.
> The question I'd ask is can a dropshipper avoid selling counterfeits? They never inspect the product for QC.
It's apparent that dropshippers know they are being dishonest and simply don't care, in a similar manner how fraudsters don't care if their victims get the shaft.
It's apparent that dropshippers know they are being dishonest and simply don't care, in a similar manner how fraudsters don't care if their victims get the shaft.
I'm going to guess you guys are using code words to talk about eBay and Amazon?
My front page of saved searches on ebay is over 50% counterfeits, I complain to eBay relentlessly. Also try hitting amazon.fr and search Balmain. At least 60% counterfeit, just one example.
If the governments will do NOTHING to set an example on the largest dropshippers in the world, why on earth would the small fry hesitate to compete in this space? Why should ebay and amazon reap all the profits from stolen intellectual propery?
My front page of saved searches on ebay is over 50% counterfeits, I complain to eBay relentlessly. Also try hitting amazon.fr and search Balmain. At least 60% counterfeit, just one example.
If the governments will do NOTHING to set an example on the largest dropshippers in the world, why on earth would the small fry hesitate to compete in this space? Why should ebay and amazon reap all the profits from stolen intellectual propery?
Kind of like the term “hacker”? I’m just going to assume there’s a site out there called Dropshipper News where the white hat dropshippers gather to talk about their industry and bemoan the negative connotations the name has taken on.
Answer: because journalists don't get to write the headlines to their articles.
Clickbait means deliberately withholding a key piece of information from a headline ("you'll never believe what this area woman found in her piano" etc) - this headline doesn't do that.
It's a decent interview with someone who expresses a view of the industry as sketchy. I don't get the disdain.
Clickbait means deliberately withholding a key piece of information from a headline ("you'll never believe what this area woman found in her piano" etc) - this headline doesn't do that.
It's a decent interview with someone who expresses a view of the industry as sketchy. I don't get the disdain.
Out of interest, what value do legit drop-shippers add generally?
Edit: thanks for all the answers.
Edit: thanks for all the answers.
If you reverse it: Effectively it’s the manufacturers outsourcing a sales funnel.
Dropshipper also absorbs the losses from credit card fraud, de-risking ecommerce for the manufacturer.
Salesmen are generally on some kind of commission structure. A dropshipper not only works on straight commission, they give all their hot leads to the manufacturer, and make all their pitches in public.
It's obvious after reading it, but I can't say I've thought about it like that. Interesting take.
They bring the product listings to where the buyers can find them.
Sometimes you’re obliged certain volumes. Maybe I don’t want 100 widgets night one. Dropshipper has the relationship with supplier and can drop ship me one unit.
I can get a product tomorrow, vs a product in a month from AliExpress assuming the boat isn’t the slow boat.
> I can get a product tomorrow
Wait, what you're describing above isn't dropshipping.
Wait, what you're describing above isn't dropshipping.
Depending on what I buy it is. Exhaust for cars are often drop shipped. Ordering something from a major exhaust company can be a nightmare, ordering from a drop shipper streamlines the process and I can just hop on eBay and not need to make an account with Borla for example, call them, payment details, etc.
"Perceived value". In other words, they make something seem higher quality. Whether that's actual value is debatable.
Value is always subjective. The same thing has vastly different value for different people.
This is why trade creates wealth!
This is why trade creates wealth!
Marketing.
This method of distributing products has been used since humans invented trade. You could ask: what is the value that grain traders provide? What is the value that wholesalers provide? Selling things isn't as simple as making them, and demand magically appears. Middlemen are required (as an example, Wayfair is a "dropshipper"...and it is clear they provide a service).
The reason why "dropshipping" exists is: there are lots of factories in China who make stuff and either don't want to distribute or can't distribute. More recently, Amazon fba exists too so you don't need physical space at all.
Also: this is part of this modern meme where a new term is invented that totally obfuscates actual meaning. The point of "dropshipping" is just to give people something they want...it is just a business. But the term has been imputed with all kinds of odd ideas about what activities are legitimate for a business to perform. It is really very unhelpful if you want to understand business.
The reason why "dropshipping" exists is: there are lots of factories in China who make stuff and either don't want to distribute or can't distribute. More recently, Amazon fba exists too so you don't need physical space at all.
Also: this is part of this modern meme where a new term is invented that totally obfuscates actual meaning. The point of "dropshipping" is just to give people something they want...it is just a business. But the term has been imputed with all kinds of odd ideas about what activities are legitimate for a business to perform. It is really very unhelpful if you want to understand business.
What value do high frequency arbitrage and MM desks add?
Very little, which is why most people who don't aspire to be one hate them.
It’s the BBC
You're taking downvotes here, but I agree.
The most consistent source of surface-level, near clickbait articles that make it to the top of HN is the BBC.
The most consistent source of surface-level, near clickbait articles that make it to the top of HN is the BBC.
These days, it takes me a moment to realize that term also stands for the British Broadcasting Corporation.
Sorry, what's the complaint here? Dropshipping really is promoted as a get-rich-quick scheme, and it's not like drop-shippers care about the quality of their products.
What is the article you wanted to see? "Some fraction of cheap goods from China are fake; some buyers displeased."
What is the article you wanted to see? "Some fraction of cheap goods from China are fake; some buyers displeased."
If someone's trying to sell you something that takes 1 month to ship out, you might as well go more direct and look for it on Aliexpress.
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I love how anyone doing their own thing must be engaged in something dodgy. The vast majority of people dropshipping are honest and entrepreneurial and doing no hard to anyone. Good luck to them, not everyone wants a 9-5 with a boss and low wages.
In my experience working at a payment processing company that dealt mostly with dropshipping and other barely-legal sellers, I don't believe that's the case. Fortunately I wasn't in the customer service team, but I heard the stories all the time.
Was it the payment processing company that were prone to dropshipping and barely-legal sellers, or that what was clogging up customer service?
I'd imagine those rare exceptions are exactly where most of customer service time in ecom/payments is spent.
I'd imagine those rare exceptions are exactly where most of customer service time in ecom/payments is spent.
Most of our clients were dropshippers, so I don't have any basis to compare. It could be confirmation bias or just misinformation, but I can't not let my experience sway me into at least avoiding them entirely in the future.
Old news here, revenue can be crazy for these stores. Ask them about their profit margin. But hey some really do work, just capital intense
I got sucked into watching a bunch of videos on youtube from drop shippers, and no one talks about profit, only about revenue. The more I watched the more convinced that the only reason these people are wasting their time posting these videos is that they make more money on their guides and tutorials than they actually make off of drop shipping. And then you can finally start to see the cracks if you watch enough. You see their failed experiments and realize that it's not uncommon to need to spend crazy amounts on ad spend, just to see if you can get any orders. And then you find out that most of these products have a lifespan measured in months. It looks like a total grind looking for new products that might turn a small profit, and hope you get another big one before you can't afford any more experiments.
I learnt from the first 5 videos the real money is in selling get-rich-quick ebooks. Some of those guys even do $1000 consultations, i recall one of the top business guru youtubers had a bunch of people pay $25000 each for a 1 week in-person course..
Fuck. I'd love to get into more detail and write out a massive essay/text wall... but today's not the day...
An unfortunately long time ago now, when I was a younger teen (like, 13), I had a large amount of mechanically inclined hands on hobbies. As a dirt poor person from the really dirt poor part of Appalachia, if you wanted something, especially in a niche hobby, you built it from near raw materials.
At the time, a few of the things I needed had a surprisingly small supply chain/availability in the U.S., and with asinine prices at that. One thing in particular, could be found practically nowhere aside from a single source in the U.S., and at something like $20/pop with a business type account necessary to purchase.
Frustrated, and having been raised by the internet, I went to China, mainly Alibaba/AliExpress for sourcing - Tangent: as I write out this comment, I was going to state "back before everybody and their uncle knew about AliExpress in the U.S., atleast." - turns out, it was only a year after AliExpress had launched. Didn't know that till now.
So, I found the specific thing I was after - needing only two of them. Two were $8 shipped, 10 was $17 - and these were the exact thing being sold for $20/PC from one U.S. supplier, and a pain to purchase. Obvious what choice I made, luckily had an older friend to use their credit card for purchase. Since I only needed the two, I for some reason thought, hey, maybe somebody else might be in my same situation, put them up on eBay for $5/PC + shipping, and hoped that maybe 2 or 3 would sell in a month and I'dve gotten what I needed for basically free.
By the end of the night, all eight of them had sold. Kinda shittered myself, and that's how I became a go-to stateside supplier of a few very niche fans, some other RC-type hobby supplies, and most notably the second top-seller of quality multi-stranded silicone "hobby" (UL 3135) wire on eBay as a sick 13-15 year old. A little over 2500 packages in 2.5 years. And, I think I've forgotten to include the main point - I was making some pretty massive margins on sales - but still undercutting the next seller by half or more. My entire point of doing this was in hopes of making some niche hobby stuff more accessible for people like me. I'm lucky enough to be able say that I'd regularly reach out to buyers and get fairly frequent replies, and found that I was often able to fulfill that goal.
Anyways, that's my I should definitely be asleep by now HN ramble of the week. My apologies that it wasn't on topic/directly related to "anonymous" dropshipping in which the "importer" never even touches their "product" cause err, my entire point being - I absolutely fucking HATE this shit ass fad or whatever you may want to call it I hear being talked about everywhere. Honestly, fuck these people. Fuck em like the intro to Method Man.
An unfortunately long time ago now, when I was a younger teen (like, 13), I had a large amount of mechanically inclined hands on hobbies. As a dirt poor person from the really dirt poor part of Appalachia, if you wanted something, especially in a niche hobby, you built it from near raw materials.
At the time, a few of the things I needed had a surprisingly small supply chain/availability in the U.S., and with asinine prices at that. One thing in particular, could be found practically nowhere aside from a single source in the U.S., and at something like $20/pop with a business type account necessary to purchase.
Frustrated, and having been raised by the internet, I went to China, mainly Alibaba/AliExpress for sourcing - Tangent: as I write out this comment, I was going to state "back before everybody and their uncle knew about AliExpress in the U.S., atleast." - turns out, it was only a year after AliExpress had launched. Didn't know that till now.
So, I found the specific thing I was after - needing only two of them. Two were $8 shipped, 10 was $17 - and these were the exact thing being sold for $20/PC from one U.S. supplier, and a pain to purchase. Obvious what choice I made, luckily had an older friend to use their credit card for purchase. Since I only needed the two, I for some reason thought, hey, maybe somebody else might be in my same situation, put them up on eBay for $5/PC + shipping, and hoped that maybe 2 or 3 would sell in a month and I'dve gotten what I needed for basically free.
By the end of the night, all eight of them had sold. Kinda shittered myself, and that's how I became a go-to stateside supplier of a few very niche fans, some other RC-type hobby supplies, and most notably the second top-seller of quality multi-stranded silicone "hobby" (UL 3135) wire on eBay as a sick 13-15 year old. A little over 2500 packages in 2.5 years. And, I think I've forgotten to include the main point - I was making some pretty massive margins on sales - but still undercutting the next seller by half or more. My entire point of doing this was in hopes of making some niche hobby stuff more accessible for people like me. I'm lucky enough to be able say that I'd regularly reach out to buyers and get fairly frequent replies, and found that I was often able to fulfill that goal.
Anyways, that's my I should definitely be asleep by now HN ramble of the week. My apologies that it wasn't on topic/directly related to "anonymous" dropshipping in which the "importer" never even touches their "product" cause err, my entire point being - I absolutely fucking HATE this shit ass fad or whatever you may want to call it I hear being talked about everywhere. Honestly, fuck these people. Fuck em like the intro to Method Man.
My friend started a somewhat similar business 2 years ago. He started supplying RC parts and laterally moved into other categories. He's now dropped out of college and hired 2 more people to get stuff imported.
Whenever I talk to him he has a similar opinion that dropshippers are one way or the other getting in his way (take order for X, don't deliver. People are now hesitant to order X from other suppliers). His clients stay for a long time but getting more is always an uphill battle.
Whenever I see him moving into a new field with a handful of offerings and make profit, it makes me realize how many more business in niche areas can pop up in every country, that too by only putting some effort in effective fulfillment and maintaining relationships.
Whenever I talk to him he has a similar opinion that dropshippers are one way or the other getting in his way (take order for X, don't deliver. People are now hesitant to order X from other suppliers). His clients stay for a long time but getting more is always an uphill battle.
Whenever I see him moving into a new field with a handful of offerings and make profit, it makes me realize how many more business in niche areas can pop up in every country, that too by only putting some effort in effective fulfillment and maintaining relationships.
Right as I had to stop, I was at a point where I'd created my own product that had actual demand. Could've patented it (well, had somebody of age patent it - but patents are mostly dumb and pointless IMO - hilariously, I'd also met/gotten to speak/slightly work with Ohanian and Schaaf due to some local startup stuff at the Uni in my town)
Unfortunately, becoming extremely physically ill, of which I'm still barely moving towards recovery from, and having absolutely abhorrent and parasitic parents kinda ruined everything at the same time. Always hurts to think of what could've been, but life is strange ¯\_(ツ)_/¯
I've definitely developed an absolutely pessimistic, utterly cynical view towards all of the people that are coincidentally mostly my same age with their whole "build up your own brand, sell your own product" when it's just them hiring a graphic artist that they're paying practically nothing to slap "their brand" only widely available mass produced China junk/apparel. I completely realize it's not a healthy quality/habit in any way, and I actively try to fight back against the feeling... but sometimes the pettiness/fakeness of it all is just too much.
Edit - just as it popped back into my thoughts... for two years after I'd completely taken down all of my listings/sale fronts, every few months I'd get some random emails of people still trying to get the more niche things I'd sold, or old customers coming back. I guess eBay caches stuff in some weird ways with regards to Google searches. As I for the most part had everything still laying around, I filled around 20 of those orders. Eventually, things did completely stop popping back into my life, haha.
Unfortunately, becoming extremely physically ill, of which I'm still barely moving towards recovery from, and having absolutely abhorrent and parasitic parents kinda ruined everything at the same time. Always hurts to think of what could've been, but life is strange ¯\_(ツ)_/¯
I've definitely developed an absolutely pessimistic, utterly cynical view towards all of the people that are coincidentally mostly my same age with their whole "build up your own brand, sell your own product" when it's just them hiring a graphic artist that they're paying practically nothing to slap "their brand" only widely available mass produced China junk/apparel. I completely realize it's not a healthy quality/habit in any way, and I actively try to fight back against the feeling... but sometimes the pettiness/fakeness of it all is just too much.
Edit - just as it popped back into my thoughts... for two years after I'd completely taken down all of my listings/sale fronts, every few months I'd get some random emails of people still trying to get the more niche things I'd sold, or old customers coming back. I guess eBay caches stuff in some weird ways with regards to Google searches. As I for the most part had everything still laying around, I filled around 20 of those orders. Eventually, things did completely stop popping back into my life, haha.
This was an interesting story, thanks for sharing!
> Fuck em like the intro to Method Man
Definitely stealing that line.
Definitely stealing that line.
great story, please do write that up in more detail some time
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This is just arbitrage over time and space, why is it so hard for people to understand that information is also an economic good. Look closely at your life and try to find when you are not doing it. We all know: "It is difficult to get a man to understand something, when his salary depends on his not understanding it", we need something like: "It is difficult to get a man to understand something is wrong when he is doing it".
If it's not sold by and dispatched from Amazon, I don't wanna know about it.
This is exactly how Amazon got its start: Jeff Bezos didn’t have a stockpile of books; he only ordered them when a customer made an order on his site. The difference of course was that he did physically handle the books.
>The difference of course was that he did physically handle the books.
If that's how it worked, then it wasn't really drop shipping. It's not drop shipping because the goods didn't go directly from vendor to customer. That's more like Just in Time fulfillment.
https://retailops.zendesk.com/hc/en-us/articles/202763175-Se....
If that's how it worked, then it wasn't really drop shipping. It's not drop shipping because the goods didn't go directly from vendor to customer. That's more like Just in Time fulfillment.
https://retailops.zendesk.com/hc/en-us/articles/202763175-Se....
I wouldn't be surprised if there was more money to be made in teaching people how to dropship. I've seen a lot of "how I make 30k per month with dropshipping" ads over the last five years or so.
This is 100% the case, and it's not just dropshipping. A lot of popular "side income" plays are like this. It's a meme in trading subreddits that the most successful day traders are the ones who sell courses on day trading.
(Note: Not critiquing the idea of side hustles or diversifying income streams in general—just making an observation about some specific dynamics in these communities.)
(Note: Not critiquing the idea of side hustles or diversifying income streams in general—just making an observation about some specific dynamics in these communities.)
Yeah exactly, Financial Independence/Retire Early (FIRE) bloggers/authors are another. Inevitably in any sort of thing you'll have people who are storytellers who parlay storytelling + the thing they're into (which sounds fun) so agreed on not critiquing. One might want to be aware of how much of that is going around though, at least in calibrating expectations to reality.
Yeah, those guys who want to retire early on dividend payments from companies whose products they condemn because consumerism is horrible.
If you sell a course you made 100% profit, basically very little chances of loss, and your business can go to zero overnight, but not negative, and very little needed to scale up.
Compare that to running a real business where things change all the time
Compare that to running a real business where things change all the time
Sure and if they'd market their courses like that there would be no critique. But this is not how these things are sold. They promise unlimited upside and no downside.
There are so many courses, that s not true anymore. The real money is in “how to make a course about dropshippin”
There's a really interesting episode of the Reply All podcast that acts as a good explainer for dropshipping from the perspective of people who are encountering it in the wild and have no idea what to make of it. I found it useful as someone who has seen a lot of ads for dropshipped products on instagram and elsewhere but didn't understand how exactly the method was making money and for whom.
https://gimletmedia.com/shows/reply-all/dvhe3l
https://gimletmedia.com/shows/reply-all/dvhe3l
Comment on comments: How can someone in one breath mention sourcing material directly from China for their customers while in the next breath say "mass produced China junk/apparel" when referring to other people's products?
Everyone seemed focused on dropshipping from China but there’s a lesser known form where they will source from eBay and sell on their platforms. A lot of my eBay sells are obvious drop shippers (asking to ship without a packing slip or anything mentioning eBay). I don’t have a problem with it though, I’ve had zero returns or negative feedback from them.
They source from Walmart and sell on Amazon.
Not kidding. $5 arbitrage.
Get an Amazon box, then a Walmart box, then the product makers box.
2020.
Not kidding. $5 arbitrage.
Get an Amazon box, then a Walmart box, then the product makers box.
2020.
Yep I’ve done that but honestly it takes a lot more work than the youtubers make it out to seem. Much easier to just source from garage sales or thrift stores.
? Sourcing from 'garage sales' means working capital, shipping trickery, limited inventory.
Sourcing from 'Walmart' means you just 'click and send' - it's pure arbitrage. No working capital needed.
Sourcing from 'Walmart' means you just 'click and send' - it's pure arbitrage. No working capital needed.
That’s not how most Walmart arbitrage works. People use tools like brickseek, find the clearance or price mistakes, drive to all the stores then send into amazon FBA. If you get a Walmart box inside of an amazon box that’s precisely what happened - although that’s just really weird in itself but whatever.
I make way more money being selective than when I have drop shipping a try. It’s really not all that cracked up to be.
I make way more money being selective than when I have drop shipping a try. It’s really not all that cracked up to be.
My brother arbitrages and does none of that - just arbitrages off list price.
There are people that just don't shop around, he can literally charge a little more or around the same price, the key is getting good rankings on Amazon.
Many people searching Amazon are just looking for something, they don't care about a few dollars here or there.
So as long as his price is reasonable, and he can get ranking ... it works.
There are people that just don't shop around, he can literally charge a little more or around the same price, the key is getting good rankings on Amazon.
Many people searching Amazon are just looking for something, they don't care about a few dollars here or there.
So as long as his price is reasonable, and he can get ranking ... it works.
Same with etsy. Create a curated shop of unique items you believe are underpriced.
Of course if drop shipping was so lucrative, they’d be doing that instead of bilking hopefuls with their expensive courses on Udemy or wherever.