According to the forecast, the dropshipping market size will reach $372.47 billion by 2025. This is a big number with the market boosting. And a lot of frauds will emerge inevitably. This passage is to tell you the types of typical scams and how to avoid them.
Common Types of Dropshipping Scams
-
Fake Suppliers
In my experience, this is the most common way. Scammers won't provide real product sources but they will charge you high member fees and initial fees as they propaganda “Premium Source” or ”Brand Agent” themselves.
The other one is “Second-hand Traffickers.” They just resell it to you as they purchase the product from different platforms, which will cause big troubles like logistics delays and bad after-sales.
-
Fake Tracking
What I know is, that this is also an issue that frequently occurs. What unpredictable thing is that the "The Supplier" will provide a fake tracking number or even refuse to provide valid logistics information. The aftermath will result in consumers not being informed of the progress of their orders promptly and they will start a dispute with you due to the unexpectedly long shipping time, and a refund is inevitable. That's also beyond your expectations, right?
A classic scenario: Provide a tracking number then disappear like a rabbit - Surely they won't respond to you anymore and you're realizing you're getting treated by ending up with this.
So if you want a very effective and reliable logistics service, you can read here: https://pbdropshipping.com/pages/service-5
We will provide you with top-notch service to ensure your customers are satisfied.
-
Hype & Fake Description
Unexpected! The granddaddy of all scams is "not as described". You can't get to know it at first time. You’ll receive refunds in astronomical amounts until you realize you’re being scammed because customers will test the quality ahead of you! "The supplier" will wrap their "trash" with manipulated positive reviews and delicate images, but the truth is the product sucks.
This will also cause numerous complaints, disputes, and refunds. Most importantly, the reputation of your store will be ruined at all.
Precaution: Get one and address it to your home before you list it on your store. That's the fastest way to blow the scam wide open.
And we pour a lot of effort into making sure our products meet the highest standards. If you're interested, read here please: https://pbdropshipping.com/pages/service-2
-
No After-sales Service
No effective channel for communicating, a clear return policy - typical! The customer service is MIA, they ghosting you.
You have no way to defend yourself and have to tolerate a big loss.
The Reason for Scam Occurring and Scam's Harm
-
“Easy in, Big Payoff”
It’s a pretty common mindset. Dropshipping has a low barrier to entry. Many people dived into it with a fantasy of being wealthy immediately, which gave fraudsters a chance to strike.
Being lured by unreliable platforms and suppliers is also common because of seller's poor experience.
-
The Complicated International Logistics & Payment Environment
The period of cross-border logistics time is hard to track, in addition to the barrier of language and law. That will also give convenience to fraudsters and that's why buyers and sellers will have difficulties in defending rights.
-
Bad Reputation and Loss of Your Store
The brand reputation will be destroyed once you're involved in fraud. You have to face refunding, complaints, accounts frozen, etc. For you, all that time, money, and manpower could go down the drain. That's frustrating!
So How to Identify the Classic Scam?
To be honest, we encountered a lot of new sellers coming to us. They always have numerous questions for us before collaborating. So next I'll share some.
-
Review the Supplier's Qualifications
The most frequent question being asked is, do we have a real working address and business license? Yeah, whether there is a verifiable reputation or case of cooperation in the industry is important. You can try for a small sample with a small order trial to ensure their product quality and delivery capability.
-
Find the Reliable Platform and Supplier Chains
Tending to choose the platforms that are being recognized by the industry, like CJ Dropshipping, PB Dropshipping.
-
Build up the Clear After-sales System
Reply to your customers timely! That will build up the trust with them. Make clear return policy and contact ways and post them on your websites. It will protect consumer rights while also reducing customer service disputes and refund rates.
-
Pay More Attention to Delivery Time
Make a plan for the shipping time. Select reliable logistics. Update the logistics progress in a timely manner. You can track the package with third-party tools or platforms. That will help you to detect the anomalies at the first time. This is a very common way. Lots of sellers install logistics tracking plugins on their websites.
-
Be Cautious for Dealing with Financial Transactions
CHOOSING SAFE PAYMENT WAY! (Like PayPal, Stripe) You're able to start a dispute and chargeback for reporting!
And be cautious with the "suppliers" who can only take the bank trans, cryptocurrencies, and other methods that lack security safeguards.
-
Check Reviews
Finally, just read reviews of them from other sellers. Dig out the negative information if they have. Industry forums and professional communities will provide more true information.
Reddit is a good place for you to do a search. Like in r/dropshipping, there are lots of veterans here. You can post your question and they will come to you friendly. I've seen a list of names of fraudsters in red underlined posted here by sellers. And they have administration and rules here which will supervise the post. BUT ALSO BE CAUTIOUS WITH THE POST! THEY'RE NOT ALWAYS RIGHT!
Practical Advice for Avoid Risk
-
Do a Pilot to Gauge the Market & Validate the Product
Don't list a lot of products on your shelf from the start! Ensure products, logistics, and everything are good, then establish a data tracking system and gradually optimize the supply chain.
-
Keep the Receipts and SC of Communication
This is general knowledge for everyone. Just keep the receipts for the evidence! Email or a platform-built-in chat tool would be better.
-
Stay Compliant on Both Third-party & Direct Channels.
This is also a thing with no more words to explain. Obey Amazon, eBay (e-commerce platforms) rules is necessary. If you're building an independent site(Shopify), rules are also important. You shall upload your privacy policy, refund policy, and other essential legal terms. From what I know, some countries in Europe make it mandatory for shopping sites to add privacy policies, which involves the law. As well as some products require special test reports, which again need to be added to the standalone site.
-
Beware of Get-rich-quick Promises
It's more of a psychological thing for this point. Any dropshipping course or project that promises ‘$100K a month’ or ‘get rich quick with zero experience’ is highly suspect. Time and money are necessary to spend when you're doing cross-border e-commerce. Please, stay conscious when you're facing related risks and benefits!
-
AppropriatelyTap into External Guarantees or Credit Evaluations
For suppliers, you can enlist third-party quality inspectors or credit rating agencies for further investigation. If condition permits, taking e-commerce platforms or payment methods with guarantee features is also feasible.
Conclusion
With lax oversight, minimal entry barriers, and complex cross-border logistics, this sector naturally attracts scammers and bad-faith sellers. If you're going to build a kingdom of consistent brand and benefits, you shall pick up the suppliers cautiously, create transparent and efficient customer service and after-sales processes, and continually improve operations and compliance. Solid marketing research and prudent trading way will prevent you from being treated, and this will also provide a fantastic shopping experience for your customer. All in all, these ways will support you to achieve long-term growth when you are in a competitive e-commerce environment.
And here I want to post a video here to provide more help about that: