Shop SMART: Avoid Drop-Ship Scammers

With prices rising, it’s more important than ever to get the most out of every dollar.  In this article, we’re going to help you hang on to more of your hard-earned cash by teaching you how to avoid a popular online shopping scam called drop-shipping. 

Note: “drop shipping” is a broad term that refers to a variety of business practices, many of which are legitimate. We are specifically referring to individual e-commerce sellers who list products at a high markup and fulfill orders by drop-shipping from another website.

What is Drop-shipping? 

In the world of e-commerce, drop-shipping is a dubious retail business model where sellers make money without ever handling inventory. They do this by selling products on one marketplace at a high markup and then forwarding the orders to a different marketplace selling the same product at a lower price.  

Here’s how it works:

  • The drop-shipper finds an item for sale for $50 on Amazon.com.  
  • Acting as a seller, they list an offer for the same item on Walmart.com for $75. 
  • A customer on Walmart.com places an order for the item and pays $75. 
  • The drop-shipper receives their order, orders the item from Amazon.com, and ships it to the customer, pocketing the extra $25. 

Drop-shipping is not illegal, though it is prohibited by some online marketplaces. Drop-shippers rely on unsuspecting shoppers to place orders without looking too carefully at the price. But price isn’t the only issue. In addition to getting shoppers to overpay for merchandise, drop-shippers often bungle the consumer experience in other ways, including: 

  • Excessively long shipping times. 
  • Shipping counterfeit, damaged, or mishandled inventory. 
  • Sending the wrong number of items. 

How Can I Avoid Drop-Shippers? 

Fortunately, avoiding drop-shippers is easy when you know what to look for.  

  • Pay attention to prices and compare prices on multiple sites. If the price on one website seems suspiciously high, there’s a good chance that it’s being sold by a drop-shipper. 
  • Before clicking the ‘Buy Now’ button, pay attention to the seller. Look at the seller’s reviews and contact information. If they get consistently bad reviews or they’re shipping from overseas (or both), they might be a drop-shipper.