Nearly 26,000 Shopify sellers are suspected of fraud, and more than 70% of them adopt the dropshipping model

I believe that sellers must be aware of the "drop shipping" model in the e-commerce industry. In the drop shipping model, sellers do not need to stock up inventory themselves, and can let suppliers ship directly to customers after receiving orders from consumers.

In recent years, the dropshipping model has been adopted by many e-commerce sellers, and independent website sellers are no exception. Canadian independent website building platform Shopify has also launched a " Dropshipping " dropshipping service. The following figure shows the dropshipping strategy provided by the Shopify blog for sellers ↓

This model is very convenient, after all, the seller does not need to worry about the storage and delivery of goods, thus saving space, time and money. However, its disadvantages are also obvious: the seller does not handle the products themselves, so it is easy to have product quality problems, wrong product shipments and return and exchange disputes; in addition, inventory tracking and control is also a difficult problem for sellers.

However, these problems are not a big deal for sellers who just want to make quick money. If you only run a store with the original intention of "getting rich quickly" instead of developing your e-commerce business steadily, it will easily cause a series of negative chain reactions.

Saoud Khalifah , founder of consumer protection software company Fakespot , said that some sellers will use a series of means to package and beautify their products, such as purchasing fake positive reviews to get a fake rating, and investing large amounts of money in irresponsible advertising and marketing on social media platforms.

Fakespot 's previous survey of more than 124,000 Shopify stores found that nearly 26,000 were engaged in some form of fraud, such as selling counterfeit products, leaking customer privacy, or purchasing fake reviews, and nearly 72% of the sellers were proven to use the dropshipping model in their business.

In addition to consumers facing fraud risks, some well-known independent brands are also troubled. The online marketing experience of Gymshark, a well-known European and American sportswear brand, is being copied by more and more dropshipping merchants, who are even directly selling counterfeit products.

“We invest a lot in both product and marketing content, so it’s very frustrating to see so many counterfeits being made,” said Niran Chana, the brand’s chief operating officer .

It is reported that Gymshark is setting up a legal team to protect relevant intellectual property rights, but at the same time Chana also hopes that Shopify can provide help. He said that the help and support they really need is to provide corresponding regulations when sellers infringe on Gymshark 's relevant copyrights and business paradigms, and to shut down the website when necessary.

In response, a Shopify spokesperson told CNBC : "We have multiple teams responsible for handling potential violations of Shopify's Fair Use Policy ( AUP ), including copyright infringement, and we will not hesitate to take action once we find it."

According to Shopify 's official website, the platform's AUP policy mainly prohibits 12 types of activities, namely : any exploitation of children ; COVID-19-related products and services that do not comply with sales regulations; harassment , bullying, defamation and threats; incitement to hatred; illegal activities; infringements; malicious damage to the interests of others and deception; public release of protected personal information; sale of restricted items and services; sale of products and services that encourage self-harm; sending spam; and sale of products and services related to terrorist organizations.

Therefore, no matter what business model sellers adopt, they must be careful not to take advantage of loopholes and violate the platform's red line just for the sake of immediate interests. After all, whoever wins the consumers wins the world. I believe that as long as sellers can make good products and services, one day they will be able to taste the fruits of their hard work!

Shopify

Dropshipping