From eBay to Etsy, the internet is full of online marketplaces where sellers flog their wares to customers around the world.
But an emerging trend that has taken off on TikTok sees entrepreneurs sell goods that they have never even touched.
So-called ‘dropshipping’ is a modern-day fulfilment method. An entrepreneur identifies a product – usually via e-commerce platform AliExpress; a cheaper, Chinese-owned version of Amazon – then advertises it to customers online.
The advert, which is often pushed on Facebook, Instagram, or TikTok, directs the customer to an online shop.
Once the order has been placed, the entrepreneur – who has no physical stock – goes back to the original AliExpress listing and has the product sent directly to the customer.
An emerging trend that has taken off on TikTok sees entrepreneurs sell goods that they have never even touched. Mohamed Camara shows people how to turn their hand to ‘dropshipping’
A pricing breakdown shows the low cost of starting a dropshipping business and is used by many students and people working in minimum jobs as a way to create an extra stream of revenue alongside their wage. However others warn it’s not as easy as it seems
They can set the final price, which usually takes into account the money spent on marketing, but is typically far higher than the original.
The seemingly simple premise has lured in would-be entrepreneurs from around the world who claim to make the equivalent of £8,000 a month through dropshipping. The industry is said to be worth $15billion.
Hundreds of ‘how to’ videos have cropped up online, showcasing the ‘simplicity’ of the scheme, but people warn that it’s ‘not as easy as it looks’ and won’t make you an overnight millionaire.
The low start-up costs mean that in theory anyone can become a successful dropshipper for little more than the cost of setting up an online store and paying for adverts.
A dropshipping business can also be run from any laptop with internet connection, appealing to the generation of ‘digital nomads’ who want to be able to travel while working to earn money.
TikTok user Alice Liu @alice_liuuu, claims dropshipping can bring in an annual six-figure salary.
A dropshipper will promote the product online in a stylized way, using trending music and platforms and sometimes sell the product at a triple markup to make a profit. The videos can often look homemade and relatable – which is appealing to the contemporary market who want to feel more engaged with products
The TikToker claims that to maximise your earnings you have to be smart when choosing your products by looking at lists such as Amazon Must Haves and Tik Tok Made Me Buy It – a tag given to products that go viral on the video-sharing platform.
Alice said: ‘You need to find a product that is unique and must have. Then you have to start a Shopify 14-day-trial. Look on Amazon Must Have lists or TikTok Made Me Buy it.
‘You are then going to go to the shopify app store and go to Zendrop. Find the product on Zendrop and then import it to your Shopify store. After customizing your Shopify store it’s finally time to advertise.
‘Use TikTok and Instagram to drive traffic to your store. Post about the product consistently and show them how this product made your life better.’
A man call Mohamed Camara claimed to make $38,000 in just two weeks from dropshipping and posted a video showing how he did it.
He found products on AliExpress, which included a pink diffuser with deer decoration that cost £7.98 and decided to sell it for more than triple the retail price at $24.99.
An AliExpress product (left) restyled and used in TikTok videos. Many users have taken this simple ‘note light’ and used it in videos – and it is commonly seen on TikTok (right)
He said: ‘I went over to Shopify where I could build my store, it was very simple and took about 38 minutes, I made a little home video for an add to promote the diffuser and that’s how I can make six figures per month from home.’
Mohamed then shows some accounts with high amounts of money in them on the video for a few seconds.
E-commerce sites welcome dropshippers, as it funnels new revenue streams they wouldn’t otherwise have and extra marketing.
Large sites benefit from having people online doing the advertising work for them, and buying large amounts of their product so they will make a lot of profit from successful dropshippers.
However others claim dropshipping isn’t as straightforward as it appears.
Low start-up costs mean a large number of people are trying to tap in on the trend. In order to stand out they are setting their prices extremely low, which in the end can mean they actually lose money once the cost of advertising is taken into account.
The market is full sellers all trying to flog the same product – much like having a street full of Avon reps, each rep would make very little money compared to if they were the only one in the area.
The homemade video made by Mohamed, demonstrated how the AliExpress diffuser fit into his home and enticed users to buy the product through his store
Some have also claimed that the start-up costs aren’t as low as one might thing.
One estimates that the cost of an online shop, a domain name for a website and advertising will be more along the lines of $500 to make the business a success.
One TikTok user said: ‘For people thinking its easy; its not anymore. You can still make a good amount of money but it takes time, its not passive income lmao.’
@Nina.modernluv was successful dropshipper who was asked to elevate her pricing by one of the providers she used to create her store.
She said: ‘I built my life and put all my love and energy into my business and had a successful page selling bridal products and had an email saying I needed to raise my prices.
‘So I raised them, and in the end I thought “these products aren’t even worth what I am selling at the moment”.
‘So aside from pricing I also had issues with shipping, customers would contact me asking “where is this product?” and had no control over that either.
‘Also with quality – I couldn’t guarantee that – so I’m dealing with brides who are looking to get everything right and if the printing is off or something was wrong – I’m going to have a heart attack for them.
‘Of course they want everything to be perfect I would too. This is why I’m never dropshipping again.’
As the dropshipper doesn’t have control of the products, they can be left at the mercy of the original supplier, who can demand they sell the product for higher, which can then cause dropshippers to lose money instead.
Morally, as @nin.modernluv experienced, she was selling products she didn’t feel were worth the extra cost – so she pulled out of the game.
Offering advice for getting started, Shopify, which helps people set up online stores popular with dropshippers, said: ‘Dropshipping businesses act as product curators, selecting the right mix of products to market to customers.
‘Remember, marketing is a cost you incur, in both time and money, helping potential customers find, evaluate, and buy the right product.
‘You’ll also have to include the cost of providing customer support whenever there’s a product or shipping issue. Last, but certainly not least, is the original price that your supplier sells the product for.
‘With all of these costs to account for, dropshipping businesses mark up individual products in exchange for distribution.
‘To make a profit with your dropshipping business, it’s a good idea to find out how much it costs for you to “acquire” a customer and price your products with that in mind.’