If you’d look at the consumer’s market 20-30 years ago the image would be quite clear- if you have something to sell- you open a store. People with handmade goods or imported merchandise would open stores in order to sell their goods to the public. That was their occupation.
Take a “jump” to 10-15 years after that and people are opening more and more stores online. The concept remained the same, regardless of having a physical store to sell goods, people are selling their items in individual stores, in eBay accounts, and so on, and also sell handmade goods on websites like Etsy, designated for that specific service.
But why sell a product you made when you could just re-sell it?
The concept of re-selling is nothing new… It is obvious to all of us that if a sports store sells Nike shoes, they are not Nike, they are simply re-selling their goods, which ok… But what happens when there are more and more stores these days that don’t in fact sell anything?
That trend is called drop-shipping.
People “build” a store with an online page, connect a PayPal account to it, or any kind of credit processing option, and start selling products. When you make a purchase with these stores, without you even knowing it, the store has an automatic system that places that very same order with a different vendor, that handles the order, from boxing to shipping.
These drop-shipping services became so sophisticated that drop-shipping end-vendors would also print your label, attach it to the product, and deliver it for you to the client’s address- with your name on the box as the sender.
More and more websites, like Amazon and Shopify are offering sellers the option of drop-shipping. They are the ones picking the best vendors in the market, the highest rated and best reviewed, and they will make sure to get your clients the good in time and in good condition. So if the service is still a good one- why is this such a bad thing?
When everybody is selling… Who is manufacturing?
People love to make money, and more than that they love to make money from the comfort of their own home, without really having to depend on anything physical. For most people this sounds like the perfect solution… You have your own brand, your own online store, with someone else in charge of all the physical hassle, so you are free to invest your time and money in marketing your online store.
But did you ever stopped to think what would eventually be the outcome of these moves?
1. Products would cost more.
The more “hands” that the product goes through before it reaches the end consumer- the more expensive it gets… That’s why people who want to save money prefer buying directly from the manufacturer. This is not saying anything bad about the drop-shipping sellers, but naturally, by having to make revenue off the products after paying for marketing and to the vendor- the prices would be higher than they would normally be.
2. People are learning that making money is easy
With new tutorials on “how to make money with amazon/shopify drop-shipping” emerging every day- people are starting to get used to the feeling that big money is made easily- with no effort whatsoever. These manuals are dangerous, showing you stories like “how I made $47,600 while I was asleep” and asking you for money in order to learn how to do the same. This way of selling is always displayed as so easy
3. What would be the end result?
If so many people are just marketing and re-selling what would be the end result? How many people would actually create new things, manufacture merchandise and do labor-work? If we are all going to be re-sellers, creating stores and stores of online goods, who will make all of these goods, and more important- how many of us will be there to buy them? Having 1-2 stores in your vicinity was old-school… Having 20-30 stores is the way we live… But how will store owners profit when there will literally be thousands of stores for each product?