As a first-time dropshipper, you might have your share of concerns. How to choose your niche, which dropshipping supplier to contact and other similar questions might give you sleepless nights. Adding to your worries can be the news related to dropshipping scams.

Dropshipping scams are more evident during festive and holiday seasons. There are incidents where the customers of first-time dropshippers have received no products at all. Another problem that a newbie dropshipper faces is receiving bad quality products after paying high prices. Such dropshipping scams agitate dropshippers and they start doubting the legitimacy of this business model. If you are thinking of starting your dropshipping store and want to avoid dropshipping scams, keep reading this article to learn the precautionary steps.

Dropshipping, as a business model, is not a scam. Neither it is a shortcut to get rich real quick. People think dropshipping is a scam because they find it difficult to understand how this business model works. Any business can lead to false selling and manipulation if the business owners do not understand its terms and conditions. Therefore, having an in-depth understanding of a business model is vital before venturing into it.

Dropshipping is a legitimate business model where your dropshipping suppliers will ship the orders directly to your customers. What it means for your store is you don’t have to worry about packing the orders and shipping them to your customers. The logistical challenges will be taken care of by your dropshipping suppliers. You can earn well with dropshipping, but remember, it is not a quick way to earn easy money. You need to find the right suppliers and know their business policies to get maximum benefits from this business model.

Unreliable suppliers may scar your business by breaking your customer’s trust. To avoid losing your credibility, you must know how to tackle dropshipping scams. Here are the common scams you should be aware of.

Fake videos and photos

Many fraudulent dropshipping suppliers go through the pain of creating fake websites that look credible. They add high-quality videos & photos on the website to mislead people. Therefore, performing due diligence becomes all the way more important in such cases. As a new person in the dropshipping space, you should do your research before signing up on any platform. See when the business was started and if they have customer reviews on their website.

Not delivering promised products

Fake dropshipping suppliers take advantage of uninformed consumers by not delivering what they promised. They will show you high-quality goods on their website and once you place the order, there is a high chance that you will not receive the promised product. In fact, in some cases, inexperienced dropshippers have not received any product at all. Not delivering the promised products is one of the biggest dropshipping scams happening right now.

Delivering inferior quality products

Many first-time dropshippers have reported that their customers have received inferior quality products even after paying a higher price. This is another dropshipping scam that makes people doubt the legitimacy of the dropshipping business model. But how to avoid such dropshipping scams? What you can do is, you can ask your supplier for product samples. There is a chance that your supplier will send high-quality goods to you as you are registered as a dropshipper with them. If you want to check the genuine product quality, place your orders under the same of someone else and use a different delivery address.

Promoting dropshipping as a means to get rich

Dropshipping is not a means to get rich. Like other business models, you need to put your time and effort into growing your store and making it well-known among customers. The only difference in this business model is you don’t have to hold any inventory. Also, you don’t have to worry about packing and shipping the products to your customers. As you can avoid the costs incurred on logistics and storage, you can cut your expenses and start your store from any corner of the world.

Suppliers disappearing after receiving payments

Another common dropshipping scam is your supplier ghosting you after receiving the payments. They promote themselves by offering great discounts and running offers. Once you pay the amount in advance, you might not be able to contact them after that.

You have to do your research and be vigilant when signing up on a dropshipping platform for the first time. Avoiding common dropshipping scams can save your money, business reputation, and customers’ belief in your dropshipping store.

TikTok & Instagram dropshipping scam

Scammers also use social media platforms like TikTok & Instagram to trap first-time entrepreneurs. They position themselves as “gurus” and gain public confidence before duping innocent dropshippers. Here are a few common social media scams that you might face and the ways to detect & avoid these dropshipping scams.

• Fake experts or gurus: Many scammers position themselves as dropshipping experts or gurus and promote dropshipping as a get-rich-quick scheme. They create false narratives to lure people into this business model, and show an extravagant lifestyle or promise unrealistic income. These gurus may also tempt you into buying their courses by promoting these courses as the only “real way” to earn from dropshipping.
• Misleading product information: Selling faulty products as the “star product” is another scam that you might come across on social media. Many scammers conceal product information and don’t give you the details that matter. If you come across ads or videos that seem too good to be true, look for customer reviews. You can also use Google Search Image to see if the scammer is promoting stock images as real products.
• Excessive influencer promotions: If influencers are highly promoting dropshipping stores without disclosing the product information or the type of promotion, it might be a dropshipping scam. Check for “ad” or “sponsored” tags on influencer videos on social media to avoid TikTok & Instagram dropshipping scams. You can also check for product reviews on different platforms to check their legitimacy.
• Low-quality website promotion: If people claiming to be “dropshipping gurus” are promoting low-quality websites on their profiles, you need to run. Avoid websites offering irresistible offers or incredibly low prices. To avoid any harm, research the website thoroughly and see for how long it has been in business.

Avoiding dropshipping scams is important to save your money, time, and business reputation. But how you can avoid dropshipping scams? Taking the precautionary measures mentioned below might help.

Look at the supplier’s legacy

See if your potential dropshipping supplier has a business legacy. vidaXL is a Netherlands-based company that has over 90,000 products in its catalogue. We offer our services in 32+ countries worldwide. We have a B2B vertical called dropshippingXL which is dedicated to dropshippers and business enthusiasts who want to start their entrepreneurial journey.

Alternatively, you can also meet your dropshipping suppliers at different trade events. You can observe their product quality and offerings at such events. At dropshippingXL, we too are a part of several trade shows wherein you can meet our representatives and check our product quality for real. You can know about our next events here!

Verify contact information & office address

When doing your research look for the office address and contact information of your supplier. Typically, these information pieces are provided on the website. If it’s possible for you, try to verify the office address by visiting there in person.

Look for customer feedback

Finding customer ratings and reviews on a particular product can help you verify the genuineness of a dropshipping supplier. If there are no customer reviews or more requests for refunds, take it as a warning.

Check product quality before placing bulk orders

Checking product quality is a good way to avoid dropshipping scams. You can place the order in someone else’s name and address to know the product quality your potential dropshipping supplier will be sending to your customers.

Do not send money offline

Keeping track of your payments and invoices can help you avoid dropshipping scams. Never send money to your suppliers offline or in person. Always make the payment through dedicated payment gateways and bank transfers.

Ask for trade license or business registration details

Any supplier who has a fake business identity will never have a trade license or business registration number. Therefore, asking for the business license of a supplier will let you know if they are trustworthy.

When starting any new business, it is important to take every step carefully. Making a mistake or falling prey to dropshipping scams can hamper you personally and professionally. Taking cues from the points mentioned above, you can avoid dropshipping supplier scams and start your ecommerce store without insecurities.

Also Read: An Introduction to dropshippingXL

Dropshipping is a business model suitable for first-time entrepreneurs as it has a low entry barrier and requires low startup costs. But this business model has its own share of risks. Here is a breakdown of the common risks that you might face when running a dropshipping store.

Supplier Reliability

• Product Quality Issues: Suppliers may provide substandard products that damage your brand reputation.
• Order Fulfillment Delays: Late shipments or incorrect orders can lead to dissatisfied customers and potential returns.
• Supplier Disruptions: Suppliers may face unforeseen circumstances (e.g., natural disasters, economic downturns) that disrupt their operations.

Inventory Management Challenges

• Stockouts: If a supplier runs out of stock, you may be unable to fulfil orders, leading to lost sales and customer frustration.
• Overstocking: If a product's popularity declines, you may be left with excess inventory that's difficult to sell.

Price Competition

• Aggressive Pricing: Many online retailers offer competitive prices, making it difficult to differentiate your products and maintain profit margins.
• Price Fluctuations: Supplier pricing may change frequently, affecting your profit margins and potentially requiring you to adjust your retail prices.

It goes without saying that, first, you need to gather evidence. Get your hands on whatever evidence you can find- screenshots, payment receipts, order confirmation emails or any other transaction detail. Note down important details like business name, website URL, and contact information if you haven’t done that already.

After jotting down these important details, do two things to minimise the risk. File a dispute with the payment platform you used to pay your fake dropshipping supplier. Explain the fraud to them and lodge a complaint. Seek legal advice from lawyers with expertise in consumer fraud. You can also reach out to business bureaus or trade commissions to file a complaint.