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Many people have come to the conclusion that dropshipping is all a big scam.
In short, dropshipping is a legitimate business model and not a scam. The problems arise from gurus marketing it as a “get rich quick” scheme.
Dropshipping has risen in popularity so much that it becomes difficult to identify who’s telling the truth among YouTubers and gurus.
That also applies to consumers interested in making more money, and generating the elusive “passive income”.
Any way you slice it, there’s an enormous amount of people who have started dropshipping, with most using Shopify as the eCommerce platform and AliExpress to source and supply products.
Over time, so many people have become interested in the business model of dropshipping, as you can see by the data on Google Trends:
It’s a business model that has become very oversaturated and difficult to succeed in.
Due to this huge trend, there’s a lot of YouTubers and gurus who have piggybacked off this new trend to sell courses and create YouTube channels to create tutorials and how-to videos for dropshipping or eCommerce.
Including, yours truly.
While some people make an effort to provide useful and genuine advice, others take advantage of it to market dropshipping as another “get rich quick” scheme.
There are a million and one different gurus saying how easy it is to make hundreds of thousands of dollars in no time.
Scammers over the years always market some magical solution to your problems. Whether it be for money, health, or relationships. This even includes legitimate business models that get spun into a scheme.
It goes from snake oil to real estate, and now dropshipping.
To better understand the truth about dropshipping it’s important to return to the definition.
What Is Dropshipping? Is It a Scam?
Dropshipping is an order fulfillment method where the supplier delivers the product directly to the customer.
That’s all it is!
Scammers twist it that it’s super easy to start Shopify dropshipping, and all you need is to do is to find a winning product and run some Facebook ads. Then boom, you’re successful!
That’s not really the case at all.
It’s mind-blowing how many people are selling the same old garbage products from AliExpress (without proper supplier due diligence to find quality products) and running Facebook ads while wondering why nobody is buying their products.
When you combine bad products, bad customer service, extremely long shipping times, a sketchy looking website, and most importantly an oversaturated advertising marketplace, it’s bound to fail.
It’s no wonder why people aren’t making money from drop shipping that way. It doesn’t add much value and it’s become so oversaturated with people flooding into the market.
Instead, it’s much better to do high-ticket drop shipping with Google ads similar to how a company like Wayfair operates.
Either route you take, it still makes no sense why so many people are being sold courses on the premise that dropshipping is easy and will help them “get rich quick”.
Read more: Are Dropshipping Courses Worth It?
Is Dropshipping a Pyramid Scheme?
Pyramid schemes are illegal according to the FTC.
A pyramid scheme is a business model that recruits members via a promise of payments or services for enrolling others into the scheme, rather than supplying investments or sale of products. As recruiting multiplies, recruiting becomes quickly impossible, and most members are unable to profit; as such, pyramid schemes are unsustainable and often illegal.
By this definition, dropshipping is not a pyramid scheme. This at least applies to the two primary methods of dropshipping. Those methods including the AliExpress with Facebook ads model, and high ticket dropshipping with Google ads.
The question that most people are trying to know when they ask “is dropshipping a pyramid scheme” is if the people that are teaching dropshipping are making more money teaching it, or by actually doing it.
By far and away, people that can prove they know what they’re talking about with legitimate sales screenshots make more by actually dropshipping than by selling courses and teaching it.
The thing is that with AliExpress the people that make the most money are the ones teaching it, Shopify, and AliExpress suppliers, or everyone but you, which could lead some to believe that dropshipping is a pyramid scheme.
Especially with AliExpress and low ticket dropshipping, where the majority of people don’t find that “winning product”.
Whereas with high ticket dropshipping, you may be able to make even more profit margin than the supplier does.
Final Thoughts
Like any business, it involves risk and takes an enormous amount of effort to get things off the ground, with no guarantee of success. If you still want to get into dropshipping, go in with proper expectations.
