Low prices, personalized products and supporting small creators are a few of the positive aspects of buying from dropshippers on websites such as Etsy, Shopify, AliExpress and Amazon. However, what is often hidden from the buyer is questionable business practices and horrible environmental impacts.
A quick scroll through Shophunter, a website that tracks Shopify stores, shows hundreds of stores with revenues in the tens of millions, selling just about every product imaginable. Tracking stores allows users to see each store’s sales in further detail. One store, selling soundproof call booths, has made a whopping $50 million in just one month in revenue.
Seeing the success others can find running these businesses makes it seem like anyone can start one. A junior at Design Tech High School decided to start their own Shopify store as a way to passively earn income.
“I wanted to make some quick money,” the student said. “I also wanted to develop the skills needed to run an online business, in case I had that option later in life.”
The student found products to sell on Alibaba, buying low and reselling them with a big margin on their personalized website. However, it can be easy to underestimate the workload required to maintain the business.
“You have to teach yourself how to run the whole business,” they said. “And, you have to work on the fly. If a problem arises, you have to fix it as quickly as possible.”
Shopify automatically fulfills orders, so the only work left to do is make ads for the product. However, advertising is often the most complex aspect of the business.
“I don’t know what makes people buy stuff. You have to be very in-the-know and adapt to trends, so it’s constant work,” the student said.
For someone balancing running the store with their personal life, finding time to grow their business can be a challenge.
“I take classes at Cañada College and do track and field, so it’s hard to find time to make ads. I couldn’t really make it take off because I couldn’t put the time in,” they said.
While the potential for great success is appealing to prospective business owners, problems often lie in the manufacturing and shipping of products.
Alibaba is a Chinese-based company, and according to NextSmartShip, Chinese factories produce all the products found on the website. The University of Southern California, with testimony from international human rights officials, found that many Chinese factories subject their workers to harsh conditions, long and unpaid hours and underage laborers. The student’s manufacturer is an Alibaba factory, but contact between the two has been limited.
“Our manufacturer is halfway across the world,” the student said. “We have very little ability to verify that the factory is following all the right guidelines.”
Also, with little communication with the factory, shipping is completely in the factory’s hands.
“We’re very uninvolved with the shipping process,” they said. “Since reaching out to them is pretty difficult, we can’t really ask them to be more environmentally friendly.”
These conditions are often hidden from consumers behind professionally designed websites that allow for seamless navigation and checkout.
While dropshipping is a legitimate business model that has been very successful for many, it is often associated with scams, including poor quality or fake products, fake reviews and long shipping times. However, there are exceptions, with many dropshippers being reliable places to find cheap and niche products.
Senior Johnny Naufal, who bought from the company Solset, was pleased with his purchase.
“[The website] looked good,” Naufal said. “They had multiple products on it, and it was very easy to navigate.”
Naufal noted that the professionality of the website helped him feel confident in his purchase.
“It looked safe and the reviews were good, so I wasn’t too worried about a potential scam,” he said. “[The product] didn’t feel cheaply made or anything.”
On third-party review websites, however, Solset’s reviews are mixed. Some claim to have never received the product, other reviewers cited the long shipping time as the reason for their poor reviews, and some didn’t mention the shipping time at all.
“It took almost two weeks to ship, but that’s what they advertised on their website,” Naufal said.
If you can parse through the scams and aim to find an ethical provider, dropshippers can be an excellent place to find products that can’t be found on store websites like Target and Walmart. If you can put in the time and effort into staying on top of the business, dropshipping can also be an effective side hustle for someone lacking the resources to start a physical store.