Facebook may have alerted you by way of a sponsored post or a friend sharing of a “Free Watch promo pay only the shipping fee” offers. Is this a legit offer or a potential scam?
Before answering that question, first things first, you need to know about an ecommerce business model – Drop Shipping, which is becoming more and more popular.
What is Drop Shipping as a business strategy?
The simplest explanation for this would be you or your company (Company A) will promote products of another business/company (Company B). When someone orders from you, you will then ORDER the same item from your source , which is Company B. The product recipient will be your customer.
Company B will then send the item directly to your customer; the item will not physically pass through you or your warehouse.
Whose name will appear as the sender of the package? It now depends on your arrangement with Company B. You could negotiate with Company B to indicate your name/your company’s name as ‘sender’ for the goods your customers orders through your website / facebook sellers page, etc.
In the absence of a special arrangement, the sender’s name that the end-user / customer will see indicated on the package will most likely be that of Company B.
In this business model – you are “drop shipping” products. You promote somebody else’s goods and products. Customers order from you. You contact the manufacturer or source seller and place an order in behalf of your customer. Source seller sends the product direct to your customer. Buyers received the product in good condition and it works normally. The trade is completed.
For Buyers – How to Spot a Drop Shipping Offer?
One of the tell-tale signs of a drop shipping business is the use of product photo in promotion and marketing efforts; and then the same photo is also being used to sell the same looking product in multiple websites.
How will you know if the photo used in the website is also used on another website? Easy, do a Google Image Search by uploading a photo lifted from the website you are interested to order from and then checking the results.
*You need to take note of the background of the product, the actual position of the product, the lighting, etc. You should be able to see right away if the photo does or does not have a duplicate on other websites.
Chances are if a company or website uses a product photo which you can find on multiple other websites, then one/few of the websites using the exact same photo is a drop seller.
Can you buy direct from the “source” seller or website which offers the same product at lower cost? Of course, you can, if that is your preference.
How to do a Google Image Search?
Let’s make this a demo for educational purposes for those who don’t know yet how to do an image search in Google. In this demo, we will use a watch photo for an actual product being offered for “free” on Lucan Lorenzo website, their “Wanderlust – travel bug watch” model.
- Download the photo you want to test. Right click on the photo then click “save image as”. Type file name and save.
2. Open your browser and type > image.google.com
3. Click the camera icon on Google Images search page.
4. Click “upload an image” tab and then click “Choose File”, find the photo you downloaded in STEP 1, then click “save”.
5. The results page will load. Check the “visually similar images” and the section for “pages that include matching images”. Check for similar looking photo. Same model, color, background, lighting, etc.
Image Search Result: The photo used in the “travel bug watch” in our demo looks very, very similar to a photo which also appeared on other websites like belilla.com, aliexpress.com, introvertpalace.com, and many more. Check color, design, background, lightning, product position, etc.
In the AliExpress.com website, the same looking model sells for US $1.60, and would you know it comes with FREE SHIPPING to the Philippines!
In the website of Lucan Lorenzo, a visually same looking watch sells for $0.00 with shipping fee cost of $9.00 for delivery to the same country – Philippines.
What if you ordered a product who should you run after if there is an issue with the product that was delivered to you or no delivery after waiting for 2 to 3 months?
If you ordered a watch via Lucan Lorenzo and there’s a problem, then file a complaint or report issue to LL support. If you ordered a watch from Ali Express, then contact the seller at AliExpress.com.
The contract is between you and the online seller you’ve chosen to buy from, even if it so happened that the vendor you ordered from is a drop-seller.
NOTE: You can also do Google Image Search if you want to know if a picture accompanying a highly suspicious “news story” that’s going viral in Facebook is fake news or real.
In the results page, you will see who or which website used the photo first by checking the time stamp.
HOW DOES ONE EARN FROM DROP SHIPPING?
Someone engage in drop shopping may earn profit in various ways:
- Jacking up the price of the goods and products.
Example: Source seller sells the product at USD 3.50 USD with free shipping.
That cheap, is it even possible? Yes, check websites of Alibaba and AliExpress as in our example demo. You’d be surprised how some items are super cheap and some merchants even sweetens the deal by throwing in free shipping.
Will the item work as intended? Will you receive the product? Is delivery on-time? Is the product of good quality? Is your purchase covered by warranty? Those are THE questions.
Back to our example, so you have a source that sells the product for $3.50. On your website, or Shopify account, or Facebook business page, etc. you listed the price of the same product as USD 6.99. Your profit margin then becomes USD 3.49.
A win for the source seller. A win for you. Hopefully, a win too for the buyer.
- You promote the product as FREE, $0.00 price but the buyer will have to pay a shipping fee.
Using the same example above. You now advertised the product as FREE on your website, your customer will only shoulder a shipping fee. Let’s assume that the shipping fee is $10 for standard shipping. You still earn a good profit.
Source seller sells the item on their company website at $3.50, you “give away” the item as a promo offer for your newly launched website, but the buyer needs to shell-out $10 to cover shipping cost. At the end of the day, your profit from this transaction is $6.50.
- A combination of 1 and 2 above.
LEGIT OR SCAM?
Finally, we come to the question: ‘is a drop shipping business offering a promo legit or not?’ The answer is ‘it depends’.
Let’s have assumptions. First, the product is of good quality and works as intended. Second, the product will arrive in your doorsteps within the promised delivery period. In this scenario, YES, the offer is legit.
Let’s now have the opposite assumptions. First, the product arrived on your doorsteps as promised but it did not work as intended. Like say a watch but the minute hand is fix / does not move. In this scenario, you were scammed.
BUYING ONLINE – RISK and REWARDS
There is an inherent risk when you buy goods online. That is just the nature of the digital marketplace. But heck, even with face to face trading transactions, there are still risks.
There are ways to ‘protect’ yourself from online scams, or at least to minimize being scam. Foremost is to only buy goods from reputable online sellers, example products sold on Amazon tagged as “Fulfilled by Amazon”or those platforms which offers seller vetting and you will only buy from high rated sellers / good reputation merchants.
Main advantage of buying online is convenience. Anywhere, as long you are connected to the internet and you have credit card or Paypal or similar, you can buy and pay for goods and services with just a few clicks. Then you just wait for delivery. Really convenient.
It is up to us, the buyers, to research further and to look for sellers who offers the same type of product at cheaper prices, if saving bucks is a primary concern. But if it’s not a concern and you just want to buy or test-buy, go ahead.
At the end of the day, online drop shipping is a recognize e-commerce business model. This is not a scam looking at it from a technical point of view. But it will become a scam if the drop-shipper will not fulfill your paid orders as promised.
Selling and buying online may not be a mainstream thing yet it all countries but in the near future, e-commerce will become huge, may even be the primary way to purchase goods and services in the future.
Hope this iSensey article gives you an overview of drop shipping as well as learn a bit about how to do a Google image search.