What is drop shipping?
You thought you had ordered from an Austrian online shop, but then had to wait weeks for delivery from abroad? You probably ordered from a drop shipping website. We explain here the concept of drop shipping, how to recognise such webshops and why, in case of doubt, it is better to buy elsewhere.
How do you recognise drop shipping websites?
The drop shipping method is not mentioned, as this usually discourages customers from ordering. Sometimes online shops mention that they order directly from a supplier, but is this drop shipping or not? Look out for the following:
- Unclear or long delivery times
Drop shipping suppliers are often based in Asia. Therefore, it often takes weeks or even months until the order arrives. Since online shops have no control over delivery times, they try not to inform at all or only vaguely about delivery times. If it is a page from the Shopify platform, company data would have to be given. Look out for Chinese addresses in the delivery location.
- Address details
Does the website list a private address as the company's registered office? Then it is probably a drop shipping business. Check the address with Google Maps. Is it in an industrial zone or a residential street? Is an address in HongKong, Shanghai or Shenzen listed for return parcels? Are these details or a breakdown of return shipping costs difficult to find?
- No own product images
Online shops that work with drop shipping often do not use their own product images but simply make use of reseller platforms or manufacturers. Compare the product image with those on established marketplaces (e.g. Amazon, AliExpress, Alibaba or Wish) and check whether you find the same image there.
- Language mistakes
Often the texts are typewritten and poorly translated from English. Look out for strange sentence structures and language errors. However, this detection feature helps less and less as drop shipping offers from German-speaking countries increase.
- An automatic redirection from an .at or .de domain to .com is also an indication.
- Fake reviews
The page only shows positive customer reviews. If the 5-star ratings come from a rating platform, you should search Trust Pilot for the name of this platform to check whether it is dubious (e.g. "loox").
Ordered via Drop Shipping, what to do?
When you place an order with an online shop from the EU, whether drop shipping or not, you enter into a contract with them. With drop shipping, the contract partner is the online shop, not the shipping company. The web shop is responsible for delivering a flawless product and must comply with the legal return and warranty rules. These are the most important rules:
- If you get doubts and want to cancel the delivery of goods that has not yet been delivered, send the sample letter "before delivery" to the dropshippers.
- Have you received a defective product? Or has the product broken within the warranty or guarantee period? Then the online shop must offer a solution and not hide behind the supplier.
- You can return the order within the 14-day cooling-off period if you have declared your withdrawal from the purchase contract beforehand. You do not have to give a reason and the drop shipping company must refund you the purchase price.
- The online shop is not obliged to provide you with a domestic return address. He can give the address of the supplier for parcel returns. Please note: The online shop must have mentioned this in the sale. The trader must also clearly state the costs for returning the order in advance. Such costs and fees can be quite substantial!
- If you have not been correctly informed by the drop shipping company about the return modalities and are expected to pay for the expensive return postage to a non-European country, your first step should be to declare your withdrawal from the purchase. Use the following sample letter "after delivery". In addition, use the sample letter "Dropshipping" in which you refuse to pay the expensive postage. You can send both letters together to the drop shipping company.
Drop shipping took off virally in 2019, multiplied in trade volume since then and is a global phenomenon. The fast-growing Canadian company Shopify played a special role in this boom. For around €30, it offers access to its own platform, where it provides drop shipping merchants with its billing and logistics software. The operation of such a webshop was thus made very easy for newcomers and also massively advertised.
It was advertised, especially on social media, that drop shipping could be used to get rich quickly with little effort and no prior knowledge. Many self-proclaimed coaches and marketing gurus jumped on the bandwagon, who in turn fleeced the budding drop shippers, who in turn applied half-baked trading concepts and caused disgruntlement among many end customers. As a result, there are millions of drop shipping web shops, mostly run by individuals who want to create a second income with a few hours of work per week. These shops give no indication that they are drop shipping and direct deliveries, e.g. from the Far East. On the contrary, the traders try to make the site look local, pay for a European domain extension such as .at or .de and try to hide the unfavourable delivery conditions as much as possible. As this led to a myriad of complaints, the EU Commission intervened via CPC authorities and reached an agreement with Shopify in 2021. Since then, webshops on Shopify have had to provide more information such as company and contact details.
ECC case studies
Susanne sees an advertisement on Facebook from the website JungleSole. She wants to order certain Nike brand sneakers there, at first glance from a Spanish retailer. Susanne hadn't noticed that there is no imprint and that the shoes look slightly different in the pictures than in the product pictures from Nike itself. Weeks after ordering, Susanne discovers that the sneakers got stuck at customs and she has to pay back taxes. If she had known that the goods were ordered from China, she would not have ordered from this website.
Nina had come across the website Hundeliebling.at through intrusive social media advertising. She ordered a dog bed from the webshop. She did not check the cancellation policy on the website to see that returns to Ninbo in China would be at her own expense. After all, "one of the largest dog shops in the German-speaking world" claims to have been founded in Münster, Germany, in 2020 and the contact email also ends with an .at extension. The fact that Hundeliebling.at automatically redirects to Hundeliebling.com is only noticeable if you pay attention to it. The same applies to the fact that all(!) products were exclusively(!) rated with a full 5 stars. Delivery from China took 3 weeks, delayed due to "high demand" they said. The product turned out to be smaller than expected and emitted an intense chemical smell. Nina and her dog are not fond of the bed, she would not order anything from this shop again. After ordering, she was asked (by the review platform Loox, which is considered to be unserious) to give a review for the purchase. Since placing the order, she has received annoying advertising by email.
Government information page on customs and duties in the online mail order business
EU Commission website about CPC requirements for Shopify