Drop shipping


Jordan Harbinger discusses various aspects of drop shipping in detail, covering both the legitimate nature and the pitfalls associated with it:

  1. Business Model and Legitimacy:

    • Drop shipping involves making arrangements with suppliers who handle storage and shipping of products directly to customers. This model is used by many online retailers, including big companies like Wayfair, which drop ships about 95% of their products 1.
  2. Market Saturation and Challenges:

    • The market can become saturated quickly with similar products due to influencers and courses promoting the same items. This leads to intense competition and often poor customer experiences due to lengthy shipping times from places like AliExpress and lack of quality control 2.
  3. Scams and Misleading Promotions:

    • The scams typically lie in how drop shipping is marketed, especially on platforms like YouTube. Many promoters sell expensive courses promising high profits with little effort, which is misleading. In reality, drop shipping has tight margins and significant logistical challenges 3 4.

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    • These courses often lead to people purchasing heavily saturated products, resulting in minimal profit due to competition and high costs associated with shipping and quality issues.
  4. Use in Large Companies and Research:

    • While drop shipping can be a viable business model for large companies with significant traffic, it's not as effective for smaller businesses. It can, however, be useful for market testing before investing in inventory and private labeling of successful products 4.
  5. Warnings Against "Done for You" Schemes:

    • Certain scams also include "done for you" e-commerce setups, where companies sell pre-populated drop shipping websites. These websites generally have no traffic and are sold to multiple buyers, making it difficult to succeed 5.

In summary, while drop shipping is a legitimate business model, its portrayal by online influencers often leads to unrealistic expectations. Success in this field requires careful product selection, attention to logistics, and market testing before scaling up.