Dropshipping: What online shoppers need to know

Dropshipping means that only invoicing and order confirmation are handled by the online shop. The goods, on the other hand, are shipped directly from the manufacturer or wholesaler without passing through the online dropshipping store.

Dropshipping is also known as drop-shipment, direct trade or direct shipping.

To avoid being surprised by ‘dropshipping issues’ after placing an order, here are some important tips for recognising dropshipping sites before you purchase.

You can find out what typical ‘dropshipping problems’ consumers have and how to solve them here.

Online shops are obliged to provide their users with certain information.

ATTENTION: The business does not have to state that it is a dropshipping company.

Many online shops have a German domain. However, a .de website does not mean that

• The company operating the website is based in Germany.
• The goods are delivered from Germany.
• The goods can be returned to an address in Germany.

Even the fact that the website is written in German says nothing about where the company is geographically based, where the goods are delivered from and where they can be returned to. Cities such as ‘Berlin’, ‘Paris’, or ‘Munich’ are also frequently used in the company name. Also, German flags are often displayed or the slogan ‘Designed in Germany’ is used. None of this is an indication of the company’s headquarters. In such cases, the ‘dropshipping’ business model is deliberately concealed by the company. The impression is created that it is a company with goods from Germany (or France, Italy, etc.).

If you click on an advert for a product on social media and are then redirected to a checkout page, make sure to take your time to guarantee the authenticity of the page. It can help to look at the website on another device with a large screen so that you don’t miss the important information about the legal notice, return address and return costs. Using a cell phone to make purchases can often conceal important information.

The company must provide its customers with certain information before the order is placed, e.g:

• The identity of the seller
• The characteristics of the goods (detailed description, e.g. size, material, colour and washability in the case of textiles)
• The total price of the goods, including all taxes and duties
• Freight, delivery or shipping costs and all other costs
• The terms of payment, delivery and performance
• The date by which the goods will be delivered
• The existence of a statutory warranty right
• The conditions, deadlines and procedure for exercising the right of cancellation

This information must be provided clearly and comprehensibly before the contract is concluded. It must be clearly recognisable and easy to find.

Check the retailer information: take a look at the online retailer’s contact details in the legal notice or terms and conditions. Are they complete? Is the retailer entered in an official business register? You can check the address using an online mapping service such as google maps. If the shop is located in a residential building in the city centre or only has a PO mail box address, this could mean that the seller does not operate their own warehouse and is a dropshipping business

Read the general terms and conditions. You may be able to find out who the seller is and where they are based.

Often you will not find a return address in the right of withdrawal. We have noticed that dropshipping sites often state that the return address is only provided on request and that it is often outside the EU, often in China. Therefore, make sure to search for a cancellation policy and the general terms and conditions using CTRL+F and look for keywords such as return costs or transport costs.

By outsourcing inventory and logistics, dropshippers can save costs and offer favourable prices. However, if the offer is too good to be true, caution is advised.

Compare prices in different online shops. For branded products, go to the original brand page and compare the prices. This will give you an idea of whether the price is realistic. In our experience, there are often big differences in quality between the product photo shown online and the goods delivered. If the price does not match the advertised product, the goods will probably not fulfil your expectations.

Take your time when ordering. Online retailers often put their customers under pressure with alleged shortages in order to influence the purchase decision. For example: ‘only a few items still available’ or discounts are only offered for a short time. However, it is not uncommon for dropshippers to advertise their goods with a permanent ‘today only’ discount.

Our tip: use a specialised search engine to see what the online shop’s website looked like a few days or a month ago. If it frequently advertises discounts, you can be sure that you won’t miss out on a bargain if you think about buying again. So-called ‘dark patterns’ are often, but not exclusively, used on dropshipping sites to persuade customers to buy quickly.

Read through customer reviews and do a brief internet search on the retailer. Enter the name of the seller or online shop and the keywords ‘review’ or ‘experience’ in a search engine. Be suspicious if there are only positive reviews for a product. If you cannot find any customer reviews, this may also be an indication of a very new shop. Dropshipping shops repeatedly use new internet addresses or variations of very similar names.

You can also check third-party websites that provide information about traps on the internet to see if the online shop is listed there (e.g. the German-language sites “Watchlist internet”, “fakeshop-finder” of the consumer advice centres,Verbraucherzentrale).

You should treat customer reviews on the website of the online shop with great caution and not include them in your purchase decision.