Scams exist in every sector of the economy. Whether you are running a brick-and-mortar, e-commerce, or dropshipping business, there are always those looking to rip you off your hard-earned cash.
The worst thing is that no one is immune to scams.
Savvy entrepreneurs and newbies can easily fall into scams if they are not careful—newbies are even more prone to such issues! That’s why, before starting your dropshipping business, you should seek as much information as possible to understand the market.
So, are you a beginner in dropshipping and are worried about falling victim to scams? This piece is a must-read. It aims to unravel the various dropshipping scams and how to avoid them as a beginner.
Table of Contents
Main Dropshipping Scams and Ways to Avoid Them
Dropshipping involves collaborating with suppliers and other entrepreneurs to satisfy customers’ needs.
However, only some have a clear goal of serving customers. Some are out to make quick money, cutting corners or making shoddy deals to pocket that extra buck.
So, what are the top scams in dropshipping you should be wary of?
Low-Quality Products and Misleading Samples
The goal of any genuine dropshipping business is to offer quality products efficiently. Happy customers mean repeat purchases and a successful dropshipping business.
On the other hand, if customers get low-quality or entirely different products from what they ordered, they won’t revisit your shop. They will also not refer friends and, in most cases, leave negative reviews. Now, that’s a big blow to your business.
Unfortunately, some suppliers are not dedicated to helping you serve your customers better. They will stock subpar products, which they ship to customers.
And even when you request samples, you can’t know, as they send quality samples different from the ones the customers receive.
In such instances, customers get what they have yet to order. They are dissatisfied and usually complain or leave negative reviews. Just like that, the reputation of your business suffers a blow.
How to Spot and Avoid Such Scams
Identifying product quality scams is easy. You will notice negative reviews from previous customers on the seller’s websites or various marketplaces like Aliexpress, Amazon, or Facebook. Also, if you see very few or too many positive reviews for a product that seems repetitive or similar, that should be a red flag.
To avoid product quality scams, check for reviews and requests for samples. Try requesting several samples with different names and addresses. This may confuse an ethical supplier.
Also, determine if the supplier is genuine by checking their business or website identification numbers.
A physical address and an active contact number can signify a business’s legitimacy.
However, don’t be too hasty. Some will even provide fake addresses and phone numbers. Take your time to verify.
Fake or Negative Reviews
Scammers know that your first method of verifying a product or brand’s legitimacy is by checking reviews. As such, they will do everything to ensure you get what you are looking for.
They generate fake reviews to mislead readers into trusting a brand, product, or supplier.
Recent research on around 720 million reviews showed that almost half of the reviews on Amazon are fake.
Now, with all these fake reviews, how are you even safe? How would you not fall into dropshipping scams?
How to Spot and Avoid Fake or Negative Reviews
You have several options to spot fake reviews. For example:
- Fake reviews have similar phrasing: “exactly what I needed,” “great product,” etc.
- They are generic: No specific experience.
- They have almost identical time stamps: numerous reviews posted simultaneously or within a short duration.
- Countless positive reviews after a negative review. They do this to discredit or hide the negative review.
To avoid being misled by fake reviews, look for genuine, non-generic ones. These are reviews that explain specific experiences and even features of a product or brand.
Assessing the distribution of the reviews will also help. If you find too many positive reviews without negative ones, be wary.
Customers or users have varying experiences with a product or service and cannot all have similar reviews. As such, there should be a mix of negative and positive reviews.
Additionally, most online businesses give verification badges to genuine buyers. Look for reviews from users with verification badges.
Fake or Middlemen Wholesalers
As a drop shipper, you are the link between the wholesaler or manufacturer and the customer. This means your prices are significantly low, allowing you to profit.
Now, there is another genre of scammers who pose as wholesalers, but they are not. Their prices are high compared to the current wholesale market prices, meaning they are intermediaries trying to make money by pretending to be suppliers.
How to Spot and Avoid Fake Wholesalers
The simplest way to spot intermediary wholesalers is to check their prices against those of other wholesalers. Be wary if they offer products higher than the average market price.
Conduct thorough research on your wholesalers to ensure you don’t fall victim. Find out their track record. Are they known to offer quality products at fair market prices? A deeper analysis of reviews will reveal this.
Also, inquire about where they source their products. Do they have direct links to the manufacturer?
Remember to check the wholesaler’s website. Most will have a non-professional website with scant details, especially contact information and address.
Fraudulent Payments
As a new drop shipper, you should avoid suppliers who might take your money. Yes, there are scammers out there targeting your money.
Usually, such wholesalers will pose as genuine ones with everything you need. They will even offer significantly discounted products to pique your attention and make you believe it’s a one-time offer you should keep from passing.
If you purchase, these suppliers disappear into thin air with your money.
Read Also: How To Do Influencer Marketing Plus Best Strategies
How to Spot and Avoid Fraudulent Payment Scams
If someone asks you to make payments offline, be very cautious. These scammers do this. Nowadays, genuine platforms use escrow services.
This helps to nurture trust and confidence in their customers.
And even if a supplier does not have an escrow service, you can still determine their legitimacy by searching for genuine reviews. Visit trustworthy review platforms like Trustpilot to see what they say about the supplier.
Lastly, consider the mode of payment. Check the fees, insurance, and integrations to determine if a supplier uses one of the best dropshipping payment gateways.
Counterfeit Products with Too Low Prices
One thing that scammers know is that every business owner wants to make a profit. And where there is money, people tend to become greedy.
Dropshipping scammers offer “seemingly genuine products” at significantly low prices. For example, you may find Nike shoes selling at unrealistic low prices, promising high-profit margins.
Suppose you notice such a thing. Run! If you don’t, you’ll place that order, and nothing will come. The alleged supplier will also cut communications, leaving you to nurse the wounds and refund your customers.
In the best-case scenario, you’ll receive a counterfeit product whose quality is far from the original. This still ruins your image, as the customer will certainly not be satisfied and will leave a negative review.
How to Spot and Avoid Counterfeit Products
Products with significantly low prices are a red flag. You are not lucky to find high-end products sold at prices below the average market price. Most genuine products, especially high-end brands like Nike, adhere to strict pricing policies. If you get greedy, you’ll be the one to lose.
To avoid such scams, learn to find items to dropship and avoid being greedy. Don’t fall for products with crazy, unrealistic offers because you want to make huge profits.
Before settling for a particular supplier, ensure you’ve done enough research about the supplier and about the products they offer. It might be time to take off if their products are relatively cheap compared to the current market prices.
Get-Rich-Quick Scams
Every entrepreneur hopes to make good money when venturing into any business. That’s true even for the dropshipping industry. But if you are careful, you might avoid getting-rich-quick scams.
More often than not, when venturing into dropshipping, you’ve researched and seen how people make good money. Your expectations are, therefore, high, and the scammers know this.
You’ll encounter people promising to show you how to maneuver the market and make money fast at a fee. These usually come as paid courses or training programs that promise to reveal the secret to success.
How to Spot and Avoid Get-Rich-Quick Scams
Any business, even drop shipping, requires time and effort to start making money. Therefore, anyone claiming to show you the secret of making money overnight is a scammer. It would help if you avoided them altogether.
Some scammers even advise you to create fake reviews to attract more customers. This might work for a while but will strike you later. So, stop being in a hurry and use genuine ways to build your brand.
Read genuine resources and learn how to grow your dropshipping business from genuine experts. There are numerous online resources on how to learn dropshipping for free. Take your time and find those.
Fraudulent Orders
Receiving orders is a good feeling, especially for dropshipping beginners. At least you know that your business is moving in the right direction. However, not all orders are genuine.
Yes, some orders may be fraudulent.
Before getting too excited about an order, ensure it’s genuine. It will help ensure that you fulfill only the genuine orders.
How to Spot and Avoid Fraudulent Orders
The first solution to spotting and avoiding these types of scams is to use the Shopify app. Other third-party apps, like Clear Sale, also work well. Such apps help grade orders based on risk level.
For instance, an order may be categorized as low, medium, or high risk. This allows you to conduct enough research about the order before initiating the order fulfillment process.
You can also look for the obvious red flags. For example, some orders are placed from a different country than the one they are being shipped to. That’s a red flag!
If one client placed different orders using different credit cards, that might also be a red flag. To counter this, request your customer provide their cards’ last four digits.
Suppose they can fulfill the order. But if you still need to, you should cancel it and refund the money. Some innocent person’s credit cards might be the subject of credit card theft.
Conclusion
Dropshipping can be a lucrative business if done right. However, you may loathe it if you encounter one or two scams. Always be alert for those scams to ensure you run a successful, stress-free dropshipping business.
It’s straightforward to run a successful dropshipping business. It would help if you learned how to market dropshipping, optimize it for search engines, offer quality products, and provide effective customer engagement and support.
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FAQs
Is dropshipping for clothes legit?
Yes, dropshipping for clothes is legit. You may encounter legal issues when using the wrong supplier, but dropshipping on its own is legal. So, to avoid any problems, ensure you’ve signed a Dropshipping Agreement Contract.
Is dropshipping ethical?
This question usually arises regarding transparency. Some people see dropshipping as unethical because the customer doesn’t know the source of the product, which might seem like a deception on the part of the dropshipper.
However, others see it as ethical, equating it to any other type of retail business. Therefore, whether dropshipping is moral depends on who is looking at it.
Is dropshipping oversaturated?
There are generally so many businesses using the dropshipping business model that this might make someone think that the market is oversaturated.
However, the secret of dropshipping lies in product choice. There is an unlimited choice when it comes to picking dropshipping products. Therefore, if you choose right, you’ll easily succeed in drop shipping.
Is dropshipping scamming?
No, dropshipping is a legal business model. But that doesn’t mean it’s free of scammers. Like any other business model, numerous scammers take advantage of dropshipping.
Some will offer counterfeit products, while others will never fulfill that order. Ensure that you conduct in-depth research before placing an order.
