I tried my hand at using Shopify to sell print-on-demand shirts I designed. I sold one of every design and made...$17. Take out fees and and what I spent to use graphics left me negative on the balance sheet.
I recently found out how cutthroat the dropshipping business can get. I was stupid and fell for an ad for Bleame, a viral "hair eraser" product and got injured using it. I ended up doing a lot of digging on the company, and they were pulling in MILLIONS each year selling a product that caused injuries (in addition to their numerous other dropship ventures). A product that was probably $1-2 and they were selling for about $30-60. They were playing dirty by scamming customers, breaking a bunch of consumer protection laws, fabricating employees, filing fake copyright and patent claims against hundreds of competitors, threatening their ex-employees who spoke out. When we created a Facebook group to support other people who had been scammed and injured, they sent their employees to report our group on a daily basis, and even got their employees into our group to report on our conversations. Just a few of the things some of these greedy types will stoop to. I dug up so much dirt on these people but got nowhere trying to report to the consumer protection agencies about the injuries their product caused.
Of course, not all dropshippers are like this, it can be a legitimate business for a lot of people. I've considered doing it myself to supplement my blogging business (I'm doing print-on-demand instead). But the ones who are only interested in fast cash and luxury living at any expense couldn't care less what laws they break and who gets hurt as long as they make money. A perfect fit for Andrew Tate.
I recommend listening to The Dream podcast (season 1) and do some deeper research into MLMs by checking out rep earnings reports on popular MLMs, Jon M. Taylor's research, William Keep's research, FTC documents and lawsuits against notable MLMs (like Herbalife and Advocare), and the AARP study on MLMs. The AARP study showed 99% of reps in ANY MLM don't break even, and actually lose money, even if they are joining to make money and work pretty hard at it. Not to mention the often illegal tactics used by many uplines. TruthInAdvertising.org found that 98% of MLMs were using deceptive earnings claims to recruit new reps. Comparing profitability, dropshipping is probably better than any MLM.
I have been in the MLM profession for 30 years. Your sources start with the flawed premise that people join an MLM to make money. Most people join because they can then buy the products at a discount. It would be the same as saying people join Costco and they actually spend money. In my 30 years of experience, the people who come in to make money and consistently work hard, do well- just like any business. Perhaps read the most recent lawsuit Nerium vs FTC- FTC lost badly with the same talking points you have used.
If you do some actual research into the Herbal life lawsuit- you would learn it was initiated to short the stock.
Quite a few people do join MLMs to make an extra income, that's how it's sold to people very often. "Make extra money", "get out of debt", "support your family". But very few actually make money according to multiple studies done across a spectrum of MLM types. If people are joining to get a discount, it's likely because MLMs seriously over-inflate their prices to begin with, the "discount" is what retail price should be. And there are other and better companies they can buy from at better prices. Shakeology is an example of over-inflated pricing, $130 for 30 servings of a shake powder when comparable products are available at better pricing and no middle man.
Have you done an profit analysis on your own work in MLMs? Are you making money profit? Even if you are doing it for fun, have you calculated whether you're losing money in an MLM?
The Herbalife lawsuit was not about stock, it was about making false promises made to new recruits about income potential. The Truth in Advertising study that I mentioned earlier found that pretty much all (98%) of MLMs use deceptive income claims to recruit people, so it's not just Herbalife that's doing that.
With regard to the Nerium vs FTC lawsuit, the FTC did not win it's case, but the judge would not reward Nerium with any coverage of legal fees because they determined that the FTC's case was within reason. There are very specific rules an MLM must abide by in order to not be considered a pyramid scheme, and the FTC failed to provide enough evidence to prove that Nerium was a pyramid scheme. But Nerium is still operating an MLM which numerous studies have shown is not a good business model.
From the judge's opinion on Nerium (Neora's) request for coverage of legal fees: "Considering the totality of the circumstances, the Court concludes that the FTC’s position was substantially justified, and does not reach the parties’ remaining arguments....In doing so, Neora discounts and downplays the legitimate and substantial disputes presented by the parties throughout this case’s lengthy procedural history". The lawsuit brought by the FTC was considered reasonable (not a frivolous/unfounded lawsuit), the FTC probably didn't gather enough evidence to support their legal claims about Nerium.
Over the last 30 years I have built a substantial business in MLM. When I found myself a single mother of 3 young children without any financial support, it allowed me to not become a swingle mother statistic and be financially independent. I was also able to be present and support my family including paying private school tuition and college. My 3 kids have no college debt- including law school.
MLM is hard work. Gyms are not a scam because the majority of people who join quit when they don’t see instant results and it’s too hard. MLM is no different. I succeeded because I came in already having experience as an entrepreneur, understanding being an entrepreneur means working hard for very little in the beginning. It means giving up something in order to have the consistent time to build the skills necessary to succeed.
I gave up sleep, tv, lots of social things in order to find the time to build my business. Most people are unwilling to make those sacrifices. I dealt with no shows, rejection from family and friends and those naysayers like you who stand on the outside and make sweeping assumptions about a profession that many women depend on.
I know this intimately from the hundreds of people, largely woman, that I have poured blood sweat and tears into helping them build something that would give them the flexibility to be home with their kids. I have helped many become large 6 and 7 figure earners. There are many who had the same opportunity, who liked the benefits of the business but didn’t want to do the work to have those benefits- just like many people want to be toned and fit, but must people are not.
I have helped woman all over the world- including in countries like Iran where opportunity is limited. My company doesn’t do business in Iran, but I have volunteered my time because I know MLM works.
I am not sure why you have such strong negative opinions about something you know so little about? You seem more determined to be right(cherry picking from the Nerium suit) than perhaps be open to the idea there is a lot you don’t understand.
“Dropshipping boils down to a pathetic enterprise: teaching people how to saddle the algorithm in order to become a glorified freelance marketer for Chinese sweatshops.”
I hate to break it to everyone, but 95% of the goods that we all purchase from the big box stores are made in the same places that make the drop shipper’s goods. In general, we as a society seek lower priced goods that are able to be lower priced because of slave wages being paid in Asia. Without these low prices, many Americans on the lower end of the earning spectrum couldn’t make ends meet. This is the darker end of the capitalistic spectrum, in my opinion.
Retail, without the inventory or brick and mortar. Sorry, what’s not to like for the drop shipper? Just set modest expectations and you can make money in your sleep. If the cost of Shopify exceeds the profit, stop drop
Scallywags, CarpetBaggers, Hucksters and Bait & Switchers, there must be at least an upper ring in Hades for such opportunists ; perhaps not THAT close to the flames of eternal damnation, but just so they get a bit singed.
I see know better system then capitalism, but such scheming, borderline misanthropic boondoggling , trespasses against decency , even the name "drop shipping" , all very sleazy.
I had, heretofore , been unaware of this fresh new hellishness but I am now aware.
The thing they don’t talk about is product liability or intellectual property theft. If you sell a product you are 100% liable for product safety. There’s an article in the WSJ on someone drop shipping counterfeit airbags that killed someone
Very old news, Ebay was the king of drop shipping with tons of Ebay sellers with prime finding deals on Amazon that they would drop ship as a gift . You can still find these sellers out there , mostly because Amazon search engine doesn't show you the real cheap sellers on Amazon that are drop shipping from Aliexpress , LOL . Drop shipping is all about bad online shopping sites that don't show you the cheapest item , Ebay, Aliexpress , Amazon the search engines are not programmed to show cheapest even though there are selection boxes that have that . Aliexpress if you select cheapest you will never find the cheapest no matter how many pages you try going through , it's a fact . Amazon works the same way, it's all about higher prices and there % take , and that is where they direct you. This is a very old game , but it does have it's problems and that is when the real supplier doesn't ship , the seller is responsible for the item no matter what and could have fraud charges brought against them , so consider that future drop shippers of the world :)
Dropshipping only works because of the crazy deal that the US Postal Service made with the CCP to essentially subsidize shipments from Chinese manufacturers and distributors to consumers in the United States. If the shippers from China had to pay what it really costs to ship something all the way from rural China to your mailbox or your front door, the entire dropshipping industry would collapse.
In the meantime, the price of the stamp needed to send a birthday card to grandma seems to go up every year, and our local post office randomly closes in the middle of the day due to lack of staffing.
Trump did change that deal and made it a lot more expensive for China to ship , the real result is a lot of the China sellers on Ebay left to Aliexpress, and in many ways Aliexpress is the new Ebay. Aliexpress now by-passes the post office for about 30-40% of there orders using these startups that act like uber i.e. independent drivers that bring the package to the door, they have to take there picture with you address in the pic, it's all very strange but seems to work .
Yes, designated as emerging market, shipping products with a value of less than a certain amount, say $900, is essentially "free" into the US. There are no duties or tarriffs from what I understand. Given that each product is shipped individually to the end receipient, rather than in a wholesale mass, entitiles this benefit. Even though all of the shipments end up in the same shipping containers.
China was classified as a developing country for purposes of e-commerce. Small shipments can be sent from China to consumers via the US Mail system at extremely low cost - far below the rate YOU would pay to ship the same thing to someone in the next state.
As an added bonus, almost all shipments to US consumers from China are tax and duty free; while a commercial shipment made within the US would be subject to applicable sales taxes.
This just makes me sad.
I tried my hand at using Shopify to sell print-on-demand shirts I designed. I sold one of every design and made...$17. Take out fees and and what I spent to use graphics left me negative on the balance sheet.
I make more here on Substack and that's not much.
I recently found out how cutthroat the dropshipping business can get. I was stupid and fell for an ad for Bleame, a viral "hair eraser" product and got injured using it. I ended up doing a lot of digging on the company, and they were pulling in MILLIONS each year selling a product that caused injuries (in addition to their numerous other dropship ventures). A product that was probably $1-2 and they were selling for about $30-60. They were playing dirty by scamming customers, breaking a bunch of consumer protection laws, fabricating employees, filing fake copyright and patent claims against hundreds of competitors, threatening their ex-employees who spoke out. When we created a Facebook group to support other people who had been scammed and injured, they sent their employees to report our group on a daily basis, and even got their employees into our group to report on our conversations. Just a few of the things some of these greedy types will stoop to. I dug up so much dirt on these people but got nowhere trying to report to the consumer protection agencies about the injuries their product caused.
Of course, not all dropshippers are like this, it can be a legitimate business for a lot of people. I've considered doing it myself to supplement my blogging business (I'm doing print-on-demand instead). But the ones who are only interested in fast cash and luxury living at any expense couldn't care less what laws they break and who gets hurt as long as they make money. A perfect fit for Andrew Tate.
Straight 🔥, River!
The author’s understanding of MLM is based on opinion which makes me question how much research he has done on dropshippers.
I recommend listening to The Dream podcast (season 1) and do some deeper research into MLMs by checking out rep earnings reports on popular MLMs, Jon M. Taylor's research, William Keep's research, FTC documents and lawsuits against notable MLMs (like Herbalife and Advocare), and the AARP study on MLMs. The AARP study showed 99% of reps in ANY MLM don't break even, and actually lose money, even if they are joining to make money and work pretty hard at it. Not to mention the often illegal tactics used by many uplines. TruthInAdvertising.org found that 98% of MLMs were using deceptive earnings claims to recruit new reps. Comparing profitability, dropshipping is probably better than any MLM.
I have been in the MLM profession for 30 years. Your sources start with the flawed premise that people join an MLM to make money. Most people join because they can then buy the products at a discount. It would be the same as saying people join Costco and they actually spend money. In my 30 years of experience, the people who come in to make money and consistently work hard, do well- just like any business. Perhaps read the most recent lawsuit Nerium vs FTC- FTC lost badly with the same talking points you have used.
If you do some actual research into the Herbal life lawsuit- you would learn it was initiated to short the stock.
Quite a few people do join MLMs to make an extra income, that's how it's sold to people very often. "Make extra money", "get out of debt", "support your family". But very few actually make money according to multiple studies done across a spectrum of MLM types. If people are joining to get a discount, it's likely because MLMs seriously over-inflate their prices to begin with, the "discount" is what retail price should be. And there are other and better companies they can buy from at better prices. Shakeology is an example of over-inflated pricing, $130 for 30 servings of a shake powder when comparable products are available at better pricing and no middle man.
Have you done an profit analysis on your own work in MLMs? Are you making money profit? Even if you are doing it for fun, have you calculated whether you're losing money in an MLM?
The Herbalife lawsuit was not about stock, it was about making false promises made to new recruits about income potential. The Truth in Advertising study that I mentioned earlier found that pretty much all (98%) of MLMs use deceptive income claims to recruit people, so it's not just Herbalife that's doing that.
With regard to the Nerium vs FTC lawsuit, the FTC did not win it's case, but the judge would not reward Nerium with any coverage of legal fees because they determined that the FTC's case was within reason. There are very specific rules an MLM must abide by in order to not be considered a pyramid scheme, and the FTC failed to provide enough evidence to prove that Nerium was a pyramid scheme. But Nerium is still operating an MLM which numerous studies have shown is not a good business model.
From the judge's opinion on Nerium (Neora's) request for coverage of legal fees: "Considering the totality of the circumstances, the Court concludes that the FTC’s position was substantially justified, and does not reach the parties’ remaining arguments....In doing so, Neora discounts and downplays the legitimate and substantial disputes presented by the parties throughout this case’s lengthy procedural history". The lawsuit brought by the FTC was considered reasonable (not a frivolous/unfounded lawsuit), the FTC probably didn't gather enough evidence to support their legal claims about Nerium.
Over the last 30 years I have built a substantial business in MLM. When I found myself a single mother of 3 young children without any financial support, it allowed me to not become a swingle mother statistic and be financially independent. I was also able to be present and support my family including paying private school tuition and college. My 3 kids have no college debt- including law school.
MLM is hard work. Gyms are not a scam because the majority of people who join quit when they don’t see instant results and it’s too hard. MLM is no different. I succeeded because I came in already having experience as an entrepreneur, understanding being an entrepreneur means working hard for very little in the beginning. It means giving up something in order to have the consistent time to build the skills necessary to succeed.
I gave up sleep, tv, lots of social things in order to find the time to build my business. Most people are unwilling to make those sacrifices. I dealt with no shows, rejection from family and friends and those naysayers like you who stand on the outside and make sweeping assumptions about a profession that many women depend on.
I know this intimately from the hundreds of people, largely woman, that I have poured blood sweat and tears into helping them build something that would give them the flexibility to be home with their kids. I have helped many become large 6 and 7 figure earners. There are many who had the same opportunity, who liked the benefits of the business but didn’t want to do the work to have those benefits- just like many people want to be toned and fit, but must people are not.
I have helped woman all over the world- including in countries like Iran where opportunity is limited. My company doesn’t do business in Iran, but I have volunteered my time because I know MLM works.
I am not sure why you have such strong negative opinions about something you know so little about? You seem more determined to be right(cherry picking from the Nerium suit) than perhaps be open to the idea there is a lot you don’t understand.
Nothing he said about MLM is wrong, in my book. But, if you disagree, perhaps we could meet to discuss a fabulous new business opportunity.
Clearly your book is short.
“Dropshipping boils down to a pathetic enterprise: teaching people how to saddle the algorithm in order to become a glorified freelance marketer for Chinese sweatshops.”
I hate to break it to everyone, but 95% of the goods that we all purchase from the big box stores are made in the same places that make the drop shipper’s goods. In general, we as a society seek lower priced goods that are able to be lower priced because of slave wages being paid in Asia. Without these low prices, many Americans on the lower end of the earning spectrum couldn’t make ends meet. This is the darker end of the capitalistic spectrum, in my opinion.
Retail, without the inventory or brick and mortar. Sorry, what’s not to like for the drop shipper? Just set modest expectations and you can make money in your sleep. If the cost of Shopify exceeds the profit, stop drop
shipping and find another gig.
During a gold rush, it is always better to be selling shovels than digging for gold.
Scallywags, CarpetBaggers, Hucksters and Bait & Switchers, there must be at least an upper ring in Hades for such opportunists ; perhaps not THAT close to the flames of eternal damnation, but just so they get a bit singed.
I see know better system then capitalism, but such scheming, borderline misanthropic boondoggling , trespasses against decency , even the name "drop shipping" , all very sleazy.
I had, heretofore , been unaware of this fresh new hellishness but I am now aware.
Thanks FP!
The thing they don’t talk about is product liability or intellectual property theft. If you sell a product you are 100% liable for product safety. There’s an article in the WSJ on someone drop shipping counterfeit airbags that killed someone
Sounds like just another pyramid scheme.
Very old news, Ebay was the king of drop shipping with tons of Ebay sellers with prime finding deals on Amazon that they would drop ship as a gift . You can still find these sellers out there , mostly because Amazon search engine doesn't show you the real cheap sellers on Amazon that are drop shipping from Aliexpress , LOL . Drop shipping is all about bad online shopping sites that don't show you the cheapest item , Ebay, Aliexpress , Amazon the search engines are not programmed to show cheapest even though there are selection boxes that have that . Aliexpress if you select cheapest you will never find the cheapest no matter how many pages you try going through , it's a fact . Amazon works the same way, it's all about higher prices and there % take , and that is where they direct you. This is a very old game , but it does have it's problems and that is when the real supplier doesn't ship , the seller is responsible for the item no matter what and could have fraud charges brought against them , so consider that future drop shippers of the world :)
Sounds like another get rich quick scheme. The only ones that make money are the ones selling the concept through training courses.
Dropshipping only works because of the crazy deal that the US Postal Service made with the CCP to essentially subsidize shipments from Chinese manufacturers and distributors to consumers in the United States. If the shippers from China had to pay what it really costs to ship something all the way from rural China to your mailbox or your front door, the entire dropshipping industry would collapse.
In the meantime, the price of the stamp needed to send a birthday card to grandma seems to go up every year, and our local post office randomly closes in the middle of the day due to lack of staffing.
Trump did change that deal and made it a lot more expensive for China to ship , the real result is a lot of the China sellers on Ebay left to Aliexpress, and in many ways Aliexpress is the new Ebay. Aliexpress now by-passes the post office for about 30-40% of there orders using these startups that act like uber i.e. independent drivers that bring the package to the door, they have to take there picture with you address in the pic, it's all very strange but seems to work .
Going up 5 cents next week. Stock up now! Costco has sets of 100 and ships free. Good little hedge against inflation
What are the details of the "crazy deal"?
Yes, designated as emerging market, shipping products with a value of less than a certain amount, say $900, is essentially "free" into the US. There are no duties or tarriffs from what I understand. Given that each product is shipped individually to the end receipient, rather than in a wholesale mass, entitiles this benefit. Even though all of the shipments end up in the same shipping containers.
No wonder the CCP controlled Tiktok is facilitating the encouragement of this practice
China was classified as a developing country for purposes of e-commerce. Small shipments can be sent from China to consumers via the US Mail system at extremely low cost - far below the rate YOU would pay to ship the same thing to someone in the next state.
As an added bonus, almost all shipments to US consumers from China are tax and duty free; while a commercial shipment made within the US would be subject to applicable sales taxes.
“We have met the enemy and he is us. “. Pogo.
A wise man once said “a fool and his money are soon parted.”
Not the point of the article, but really loved the line "It’s the sort of house that looks empty in an expensive way".
I suspect people rent these houses to look rich and don’t have money for furniture.