Drop shipping is a business model in which a seller takes orders from a customer, then has the purchase shipped directly to the buyer from a manufacturer or wholesaler, without actually handling the item at any point. It is a lower-risk way to sell online without having to spend a lot of money upfront on inventory (or storage space for said inventory), and it’s an attractive option for people just getting started as entrepreneurs.
In fact, many major, legitimate companies use this method to sell products. If you’ve ever ordered a new mobile phone and it was sent to you from China, that’s drop shipping. A lot of small online sellers also use this business model, selling only products they have tested and believe in, from suppliers they trust.
Drop shipping itself is not a scam. However, a lot of scammers use drop shipping because it can be an easy way to make a quick buck selling counterfeits and junk.
Advertisements and promoted posts on social networks seem to be the channel of choice for drop ship scammers. While those junky “Ray-Ban Sunglasses for $10!?!?!?” ads are easy to spot and ignore, a lot of drop shipping scammers create ads that appear quite professional. Clothing and fashion are the biggest category, along with cosmetics, food, electronics, and gadgets. You might see some fabulous-looking clothing item, from a known designer, advertised for $30 instead of the usual $300. Or a sophisticated-looking wristwatch, again by a known maker, for FREE (you only pay for the shipping).
These ads might even take you to a professional-looking e-commerce website. Every link works, the text on the website uses proper spelling and grammar throughout, and it’s even a secure site, with the “https” and the little padlock icon and everything. “Why not?” you think, pulling out your credit card.
Then you wait. Finally, what arrives at your doorstep, many months later, is definitely NOT the item you ordered. That designer article of clothing has somehow become a horrific, poorly-made, ill-fitting knockoff that isn’t worth $3, let alone the $30 (plus shipping) you paid for it. And that watch? You could have won a better timepiece from a twenty-five-cent claw game at a truck stop in 1986 than the piece of plastic junk you just overpaid to have shipped from the other side of the world.
And that is the drop shipping scam. These sellers have no intention of shipping a quality product to you. They create good-looking ads (or reuse ads other drop shipping scammers created), set up a website using one of the many turnkey e-commerce platforms available to literally anyone, take your money, and have some fishy wholesaler ship you whatever trash they’ve got lying around.
The tip here is the same one that has been repeated a million times: if something looks too good to be true, it almost definitely is. Especially on the internet.