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HOT TOPIC Why dropshipping is bullshit... (and why you should avoid it).

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JasonR

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”Canggu is a place where people go to feel rich.”

:rofl:


When you aren’t actually rich, but want to feel like you are, go to Bali.


There is real value though to living in a place with extremely low cost of living while you build your business.
Well, while that is a little insulting, it's still true. The cost of living is rising dramatically as people flock there.

I can live anywhere, but loved living in Bali for lots of reasons. We lived nicely there, but weren't thrifty. If you had to be, you still could.

On a side note, while I would not encourage people to drop ship, I do few people who still crush it there - easily multiple seven figures a year. This is the exception though, and not the rule.
 

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Aurelius

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Well, while that is a little insulting, it's still true. The cost of living is rising dramatically as people flock there.

I can live anywhere, but loved living in Bali for lots of reasons. We lived nicely there, but weren't thrifty. If you had to be, you still could.

On a side note, while I would not encourage people to drop ship, I do few people who still crush it there - easily multiple seven figures a year. This is the exception though, and not the rule.
9 out of 10 businesses fail in the first 3 years. So I guess, with that in mind, you would not encourage someone to build a business?

Succeeding in business in an exception, not the rule
 

JasonR

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9 out of 10 businesses fail in the first 3 years. So I guess, with that in mind, you would not encourage someone to build a business?
When did I encourage someone to NOT build a business?
 

sparechange

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When did I encourage someone to NOT build a business?
If you give the troll some cheese, he will always come back for more cheese.
 

amp0193

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Well, while that is a little insulting, it's still true. The cost of living is rising dramatically as people flock there.

I can live anywhere, but loved living in Bali for lots of reasons. We lived nicely there, but weren't thrifty. If you had to be, you still could.
Not knocking it just thought the quote was funny... I was jealous of your Bali life, and tried to convince my wife to give it a go, but she wasn't interested.

Looks amazing actually.

Great place to enjoy a nice lifestyle if you can engineer a location independent business.
 

Bryan James

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With dropshipping it seems like the problem would be the time it takes for the Chinese product to get to the location the customer lives at. Inconveniencing your beloved customer with a waiting period of a month or more before they receive their product is obviously a problem.
 

bnkrpt

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There is drop shipping, then there is dropshipping. I don't agree with the "get rich quick" ideology that drop shipping is advertised as by gurus to sell a course. I do believe you can build a business that involves drop shipping which makes sense. Obviously you break the CONTROL commandment to some degree and I'll talk about my experience there, but there are many big businesses that utilise dropshipping.

I work for a large home renovation retailer and I can tell you with certainty that we have about 20,000 product lines which we sell on our website (and can be ordered in-store) which get shipped to the customer (or to one of our stores for pickup) by our suppliers. This is a multibillion-dollar company.

Dropshipping can work if it's not your main source of revenue, if you have products that are big and bulky that don't make sense to ship to your warehouse before shipping to a customer, for a myriad of reasons. With the right contracts in place, you can have a solid business that utilises dropshipping.

I built a business around a product I had dropshipped from a competitor. I had a killer exact match domain for a product and was ranked number 1 in Google for that term. I had the exposure, the traffic, and the interest of the competitor to buy the domain. We couldn't come to an agreement on price, so I pitched the drop shipping model where I would build out the website and they could fulfil my orders to my customers. I was able to monetise my traffic and he was able to get in on my exposure. It was a win win for both parties, as well as the customers as they were buying items they wanted.

Now this is where drop shipping works, it wasn't an avocado slicer shipped from China for 90c and sold for $8. It was a business where the supplier, goods, and website were all local. Now where I got into trouble was that my supplier lost the distribution rights to this particular product I was selling which meant an end to my business. Again, unless you have your own product you have designed and manufacture it yourself, you will and can run into similar issues.
 

sparechange

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This thread is awesome, people disagreeing with MJ, LOVE IT!

Those experts must be raking in billions as we speak.
 

wouldntitbenice

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Still an absurd level of risk to purposely take on, in my opinion. The manufacturer holds all the power. One day they can just say "nah" and you're done. It's the same with private labelling arrangements and Amazon FBA.

As an aside: I really don't think "hey I'm making money with it" is a very good argument. I'd highly recommend you look into other ways to get product made NOW, and prepare your business. Same with your dropshipping clients.
The vast majority of retail is a person selling someone else's stuff. It's viable. I understand and agree with the philosophy extolled on this forum, but most of the world's wealth is not created from following it.

Also, a factory can stop manufacturing your product for you. A supplier can stop supplying your drop shipping business. A retailer can stop stocking the product. A platform can ban you. A key employee can die. Someone holds power unless you own a factory, the patent to the product you sell, and the platform where you sell it, and accomplishing those are extremely hard...and often unnecessary.
 

consignia

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Well yes, it's not 2014 anymore. I agree is a waste of time now, unless you can think outside the box and give it a twist of your own then it's not worth it
 

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Chibbs

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Is the general consensus that this would also include sourcing from China and private labeling?

I have a concept I have been exploring that would involve sourcing a product from China and branding it for a niche where I have identified a need.

What do you guys think? Are we talking about drop shipping, specifically? Or is this type of business too difficult to pursue due to the sourcing.
 

Redwolf

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I'm a Garmin authorized reseller and they will drop ship if I want to pursue that model - although that does not add much, if any, value to the buyer. Not quite the same thing MJ is referring to tho.
 

Thinh

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Easy test. One just has to look at himself in the mirror and ask himself:
Am I solving a problem / bringing real value to people who are giving me money?
Dropshipping is a business practice, in itself it's neither bad nor good.
The problem is the money chaser who starts doing it just to make an easy and quick buck.
 

Beebop27

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Interesting article and kinda reflects what I've been saying for over a decade. And also why I don't like too many drop-shipping threads around here.

While drop shipping is a nice "I need some experience" it is largely no different than joining an MLM -- crowded with wannabees, fake gurus, and people trying to make a quick buck.

You are better off focusing on your own product.

In crowded spaces, average execution gets you nothing.

View attachment 33436

‘It’s bullshit’: Inside the weird, get-rich-quick world of dropshipping

View attachment 33435


OMG.. That's Mike Vestil, absolute con artist.
 

jlwilliams

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Is the general consensus that this would also include sourcing from China and private labeling?

I have a concept I have been exploring that would involve sourcing a product from China and branding it for a niche where I have identified a need.

What do you guys think? Are we talking about drop shipping, specifically? Or is this type of business too difficult to pursue due to the sourcing.
Offshore manufacturing isn't by itself in the same "scammy" genre as drop shipping. If you are getting a product made, importing it and have it in stock, ready to ship you are doing something completely different than selling a picture with good copy in faith that the product (a) exists and (b) will be delivered in a reasonable manner.

That said I'm a little cautious of how the current situation in America will play out for businesses built around anything with a "made in China" label. We are only just now getting used to the headlines of forty plus million unemployment numbers. We can't yet see what that will look like as that abstraction becomes reality. What happens when the finite months of unemployment checks stop? How many of those jobs come back? Very importantly, will the public associate China with their condition? I want to kind of side step any discussion of how reasonable that is or isn't because I don't care if it's "right" I do care if it becomes reality. Public opinion is hard to predict. We have a track record in this country of feigning massive indignation and patriotism only to forget that completely when the cash is on the table. Conversely, none of us has ever seen before what we are seeing now.
 

tearlach99

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I did Dropshipping and learned a lot, didn't earn money though. I do not regret the attempt, but I apologize to my costumers.
Same here. I sold chess sets and equipment back in 2002/03 via dropshipping. I learned a lot in the process, but just about broke even. I reckon what I learned in the process made it worth it though (lessons like not trying to sell a product that a bazillion other people sell). I found myself competing with one of my wholesale suppliers. I accidentally found out that they were selling their marble chess sets on eBay for less than what they were charging me. The competition was stiff even back then. I can only imagine how hard it is now selling that way. I remember a conversation I had with one exec whom I was trying to convince to let me sell their chess sets. She told me that there were so many folks trying to sell the chess sets that she didn't see how any of them were going to make a profit.
 

Rawr

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Not knocking it just thought the quote was funny... I was jealous of your Bali life, and tried to convince my wife to give it a go, but she wasn't interested.

Looks amazing actually.

Great place to enjoy a nice lifestyle if you can engineer a location independent business.

plan to go there next.. for now my sea view 4 star hotel room (first line) is $360 a month in vietnam. Ive had a friend tell me about going to a country where dollar goes far since we were 19 in MN... but you only get it when you do.. I feel like I can do anything in vietnam.. any restaraunt, any experience.. 2k a month is plenty if not too much. I cant fathom going back to US unless Im making 70000 a year.
 

sparechange

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plan to go there next.. for now my sea view 4 star hotel room (first line) is $360 a month in vietnam. Ive had a friend tell me about going to a country where dollar goes far since we were 19 in MN... but you only get it when you do.. I feel like I can do anything in vietnam.. any restaraunt, any experience.. 2k a month is plenty if not too much. I cant fathom going back to US unless Im making 70000 a year.
You would also be living in a third world country..... :eek:

Vietnam is struggling with alarming air pollution. Its two biggest cities, Hanoi and Ho Chi Minh City, are now among the top 15 polluted cities in Southeast Asia. Fine particulate matter (PM2. ... Up to 60,000 deaths in Vietnam in 2016

I talked about wanting to goto Vietnam (I'm in Canada BC) and my coworker mentioned it being a huge dump..........

(They are from Vietnam)
 

Isaac Oh

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Actually had a close friend of mine who dropshipped women's leggings about two or three years ago. Products cost him under $2 and it was selling for like $9.99 + shipping. And shipping is where they get you, it was like another $12 or something like that. Either way, big profit margins.

He actually did over $1.5mil in revenue with a huge profit in the end. Also in the end, you could start typing the name of his website and "[website] scam" would be a autofill result lol. A workday would be fulfilling refunds and deleting negative comments on social media

He bought a Ferrari, moved to a nice apartment in a nice area...

On another note, he went $30k into debt before seeing returns on his biz. He's tried dropshipping again, unsuccessfully.
Now, Ferrari is sold, living in a place provided by his gf, and a few weeks ago was looking for a job.
Next project for him is creating a digital marketing agency where you outsource everything.



:hilarious::playful:

[x] Global pandemic
[x] Fb ads
[x] Ig ads
[x] Shopify

Every online entrepreneurs dream.

I'd imagine MJ is sitting back, sipping scotch whilst puffing on a cigar (shame on him for smoking) whilst assessing the situation from afar... waiting to pull the trigger.

View attachment 33447
:rofl:

You know, the cool thing was that that thread opened my eyes to what's possible and got me working on the board game.
 

Odysseus M Jones

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You know, the cool thing was that that thread opened my eyes to what's possible and got me working on the board game.
Not sure what @sparechange problem is.
I've read the whole thread & actually there's some good info on it.
 

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Isaac Oh

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Not sure what @sparechange problem is.
I've read the whole thread & actually there's some good info on it.
The biggest thing for me, and maybe the OP of that thread could elaborate more, was that I didn't see how branding the product could raise value for the customers. I never thought perceived value was the thing you wanted to tackle for a sustainable business. Could be totally wrong
 

sparechange

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Not sure what @sparechange problem is.
I've read the whole thread & actually there's some good info on it.
He is obviously making a crappy thread and funneling in gullible people on the forum into his marketing agency.

I watched some of his videos and the guy sounds exactly like every shopify & fb ads guru.

This forum is an awesome place, and its sad to see scumbags like him using it as a chanel to funnel.

If you want to study ecommerce look into biophase's threads, he is backed by MJ, so he is atleast trustworthy (amp103) or whatever the exact name is has great content aswell. Jason R just above a few posts is an OG aswell. I'm missing a ton of other great posters, just noting off the top of my head.

But good for him if he's making money off money chasing noobs that want to buy a Ferrari by ordering some crappy products from china and selling them on shopify. One of my biggest problems (driving traffic) Which I think is actually one of the hardest parts of doing online stuff, is the solution he is selling, so like agaisntallodds post said, make some crappy fake value and funnel in suckers to _____

Extremely obvious what the dudes doing, look at his signatures, all self promotion.
 
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Beebop27

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Same here. I sold chess sets and equipment back in 2002/03 via dropshipping. I learned a lot in the process, but just about broke even. I reckon what I learned in the process made it worth it though (lessons like not trying to sell a product that a bazillion other people sell). I found myself competing with one of my wholesale suppliers. I accidentally found out that they were selling their marble chess sets on eBay for less than what they were charging me. The competition was stiff even back then. I can only imagine how hard it is now selling that way. I remember a conversation I had with one exec whom I was trying to convince to let me sell their chess sets. She told me that there were so many folks trying to sell the chess sets that she didn't see how any of them were going to make a profit.
I looked into dropshipping too, and discovered that most of the people on AliBaba or which ever platform you choose to get your products, are also middle men. So you are like the third or fourth guy on the wheel adding their margins.
 

Odysseus M Jones

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sparechange

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Marty-WOB

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Dropshipping Aliexpress Products is obviously nonsense unless executional excellence is present and there is a real need. But I was wondering about "Changing the Pond". In Unscripted, MJ talks about potential opportunities where the Entrepreneur can add value by "changing the pond" or finding a product that is not sold (easily) somewhere but is present somewhere else. What do you think if there is a need for such a product in another location but the process of importing it is rather difficult? It obviously violates the commandment of control to some degree which could be reduced by choosing multiple suppliers but also adds value by making this product available here and taking care of the difficult importing process. A second step could involve a customization option (Build to Order). Do you think this is different enough from traditional drop shipping?
 

Rawr

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You would also be living in a third world country..... :eek:

Vietnam is struggling with alarming air pollution. Its two biggest cities, Hanoi and Ho Chi Minh City, are now among the top 15 polluted cities in Southeast Asia. Fine particulate matter (PM2. ... Up to 60,000 deaths in Vietnam in 2016

I talked about wanting to goto Vietnam (I'm in Canada BC) and my coworker mentioned it being a huge dump..........

(They are from Vietnam)
Dont care Im on the beach not in cities landlocked. Also Dalat nearby I bet has top 100 cleanest air cities being in the mountains. Lesson - dont go to where its bad.
 

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