As I was researching keywords recently, I came across a really interesting question: is dropshipping ethical?
Clearly, this is a question that people are wondering if I was able to see it search results online. It’s easy to see why. There’s a tendency to assume that something so profitable must surely have some kind of seedy underbelly.
I’ve decided to tackle this question and have a serious discussion with you about the ethics of dropshipping. Before I begin, though, allow me to give you a disclaimer:
It’s crucial to say that ethics are relative. What’s an acceptable practice to one person might be the complete opposite to another. As I talk about the ethics in dropshipping, I want you to keep in mind that these are my opinions.
There is More than One Kind of Dropshipping
Before I get much further, I need to make another important distinction.
Dropshipping is kind of an umbrella term. Underneath that umbrella, it divides into multiple categories for various ways to conduct the business.
At the very top of that umbrella, dropshipping just means that the brand who owns your product or the manufacturer is going to ship it for you. You’re simply the person marketing the product in question.
My opinion is that not all business models are equal. Since there are different kinds of dropshipping, this belief applies: some dropshipping methods are better than others.
I’m going to describe two main types of dropshipping: dropshipping cheap items through sites like Aliexpress, and high-ticket dropshipping. After explaining what they are to you, I’ll dive into the ethics of each one.
What is it?
One method of dropshipping is listing products from one website, like Aliexpress, then marking it up on your own website. Then, you run Facebook or Instagram ads promoting the product you’ve marked up. In the advertisements, you try to hype the product up as much as possible, which is why you’ll see so many crazy ads on Facebook.
Think about it. Every time you scroll through your feed, you see these insane videos that catch your eye. These ads try to reach into your emotions and convince you that you can’t go another day without the item they’re selling.
Everything about them is designed to be extravagant. They run ad copy filled with emojis, they work with influencers, they make videos with wild openings to make you stop scrolling for a moment…the list goes on.
In the end, the goal is to sell you something that’s really cheap and mark it up so they can skim some profits off the top.
Is it ethical?
My personal opinion is that no, this method of dropshipping is not ethical. It’s definitely not the worst business model out there, but at its core, you are selling something that is way overpriced.
Yes, price is a little bit subjective, but it’s still exploitative to take something you got for a dollar and mark it up to $20. Chances are, the product you’re selling isn’t exactly high-quality, and it’s not worth the amount you’re asking for it.
Furthermore, you have to play on people’s emotions in order to sell it. Dazzling ads and flashy influencers come together to make your buyer believe they need your cheap product. When all is said and done, there’s a great possibility your customer will end up getting something they don’t like.
It might even just break right away, or show up already broken after they order it. Worse still, many of these overseas suppliers aren’t consistent, so there’s also a possibility your customer’s product won’t show up at all.
Another thing to think about is what the audiences are for these types of sales. You’re usually going to get older people who aren’t technically savvy, or possibly even younger kids who don’t understand that you’re just taking their money and placing an order for them on another website.
And if they did understand, you can bet that they’d just go to Aliexpress or that other site and order it themselves.
Don’t get me wrong – this doesn’t mean that everyone who sells something to you at a marked up price is doing so unethically. If you buy anything from anyone, I can guarantee you paid more for it than the person who’s selling it to you did.
The thing that makes this kind of dropshipping unethical is that it’s concealing the fact that you could just open another browser window and buy it cheaper yourself.
If none of that convinces you, then the fact that it’s an unprofitable business model might. When you do dropshipping this way, you’re not building a long-term business that you can sell down the road.
Or, if you do end up selling it, you’re certainly not going to get a lot for it. You can check one of our students, Michael, and the story of how he lost $8,000 doing Aliexpress dropshipping here.
What is it?
Let’s compare this to the way we do dropshipping here at BAO. If you’ve looked around our site before, taken our courses, or watched our videos, you probably know already.
However, in case you’re new here (welcome, by the way!), I’m going to explain what we do. Yes, we do drosphipping, but we don’t do Aliexpress dropshipping.
The method we use is called high-ticket dropshipping. Instead of shipping from suppliers overseas, our suppliers are mostly from the US and sometimes Canada. We form relationships with suppliers for high-quality and expensive items, which we market on our own sites.
Is it unethical?
Again, whether or not something is ethical is oftentimes a matter of opinion. But in the case of high-ticket dropshipping, my answer is that it is indeed ethical.
There are a few main reasons why I think so:
- How we advertise.
- The products we sell.
- The prices we sell our products for.
- Our customer service.
One of the biggest differences between our advertising and what you’d see for Aliexpress dropshipping is that it isn’t as flashy. We’re not trying to interrupt you and exploit your emotions to get you to buy something from us.
We use a method called query-based marketing. That means you’ll see our ads when you’ve been searching for something we sell. We market to you when we have reason to believe you’d actually want to buy from us.
Second, our products are high-quality. The main part of high-ticket dropshipping is choosing an expensive array of products, because you want to make as much as possible with fewer sales. For that reason, our items are inherently high-end (and usually luxury) products made by reputable brands.
With high-ticket items, there’s not really a need for us to mark up the prices to insane heights. We sell them for the same prices other people do, so you’re not being ripped off.
Finally, we provide extensive customer service instead of trying to hide from you like some Aliexpress dropshippers will. We don’t try to just take your money and drop off the face of the earth.
When it comes to ethics, things are rarely black and white. There is always nuance involved with these types of questions, even when it comes to business. Perhaps especially when it comes to business.
One last note I want to leave you on is how you’re treating yourself when you conduct your business practices. With things like Aliexpress dropshipping, you’re cheating yourself out of valuable time and money.
But when you do high-ticket dropshipping, you’re being ethical to yourself. That means you’re not wasting your time spinning your wheels over nothing. You’re not dumping money into fruitless ad campaigns on Facebook or on flashy influencers.
Instead, you’re building a real and viable business that will withstand the test of time. You’re building a business that you can even sell one day. This is called an evergreen business, because it’s sustainable year-round, not just for a short period of time.