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Is Amazon or Walmart Dropshipping Unethical?

Whether you are thinking about starting your own online business, are looking into e-commerce automation options, or have simply been on the internet, you have likely heard some discourse around both Amazon dropshipping and Walmart dropshipping. The main argument revolves around one question: is dropshipping unethical?

What is dropshipping?
To truly understand the importance of this question, you need to know what dropshipping is. The dictionary defines dropshipping as ” moving (goods) from the manufacturer directly to the retailer without going through usual distribution channels.”

Considering the textbook definition, dropshipping does not sound unethical in the slightest. In fact, it sounds like what most retailers do: buying products from a manufacturer to sell to the public, right?

The biggest difference between Amazon and Walmart dropshipping sellers and traditional business models is that drop-shippers do not need to have their products directly on hand to sell them.

Instead, whenever an order is placed, the order goes through the dropshipping store and is forwarded to a third-party, either a manufacturer or an e-commerce automation service, which will then package and ship the item from their own inventory. Dropshipping is a completely legal and—when done right—ethical practice.

Unfortunately, the term “dropship” itself has become far more general than the one you get in the dictionary. This is where problems arise and some people begin to think that dropshipping is not an ethical practice or is a way to scam customers.

Why do some people believe dropshipping is a scam?
Since “dropshipping” is a term that is used rather loosely by the public, it has garnered itself a bad name due to some legitimately unethical sellers. Consider this:

You are browsing Etsy, a website specifically catered for handmade goods, looking for a cute, unique birthday gift for a friend. You find what you think is the perfect gift, a mug that a small seller touts as handmade and one of a kind. It’s a bit expensive, but you are willing to pay extra for a mug that someone made by hand.

You purchase the mug, and when it arrives, you notice a few details that make you suspect it wasn’t handmade, so you begin searching online. Eventually, you find the exact same mug on Aliexpress—a Chinese website that offers goods for low prices—at a fraction of the cost you paid on Etsy.

You realize that not only is the mug not handmade or unique, but that you could have purchased the item directly from the manufacturer on Aliexpress for way cheaper.

Of course you feel like you have been cheated!

Though this method is technically dropshipping, since the Etsy seller purchased the mug directly from the manufacturer, the practice of dropshipping itself is not unethical, nor a scam. However, this hypothetical seller is unethical because they lied to the customer (you) about the nature of the goods.

Situations like these are behind the belief that dropshipping is unethical. Sellers will use third-party organizations to dupe customers, pocketing the profit they make from their lies and exploitative price gouging.

These are the types of people that give dropshipping a lousy name, but there are many sellers that do their best to remain ethical at all times

Why Does the Internet Think Dropshipping is a Scam ?

Dropshipping is ethical when done by the right seller.
If you want to start your own Walmart or Amazon dropshipping business, you need to know that it is perfectly possible to remain ethical.

Retail stores do the exact same thing dropshippers do. They purchase products from a manufacturer for a low, wholesale price and mark them up according to what they believe a customer will pay.

Sure, customers may be able to purchase the items your Amazon or Walmart shop sells for a fraction of the price. Still, when you use a third-party eCommerce automation service, you are offering them the same thing retail stores can: convenience.

Though some customers may feel cheated when they realize that they can purchase similar or the same products through wholesale websites, what they do not always realize is that they are paying more for the convenience of not dealing with wholesalers in other countries.

When your customers order merchandise from Aliexpress or other wholesale outlets, they typically have to pay for international shipping costs, wait long periods of time for products to arrive and have difficulties returning or addressing any issues with their orders.

Your Amazon or Walmart drop shipping business can offer your customers these same products but without the problems that come along with dealing directly with manufacturers. Especially when using an e-commerce automation service, your customers will receive products quickly with minimal shipping fees and be able to talk to a real human being (you!) if they need to make any returns or have questions.

As long as you are transparent with your customers (and never lie about a product’s origin, like the Etsy seller in the example above), choosing to start your own Walmart dropshipping or Amazon dropshipping business is completely ethical. It is not a scam, either!

If you want to offer your customers the convenience of dealing with a responsive, ethical, real group of people—instead of waiting months for a defective product like a wholesaler—contact us here at Pushamz.