A recent podcast from Reply All, inspired by this Atlantic article and this paper by artist Jenny Odell has sent me down a rabbit hole and into the strange world of dropshipping. Each of them set out to answer: What is up with all of those weird ads in your Instagram feeds? You know, the ones with what look like luxury products with dubiously cheap price tags or limited time offers? Does anyone ever click these and actually buy these products?
Well, the answer is yes. As it turns out, what’s behind these brands is one platform: Shopify.
Alexis Madrigal writes: “All these sites use a platform called Shopify, which is like the WordPress or Blogger of e-commerce, enabling completely turnkey online stores. Now, it has over 500,000 merchants, a number that’s grown 74 percent per year over the last five years. On the big shopping days around Thanksgiving, they were doing $1 million in transactions per minute. And the “vast majority” of the stores on the service are small to medium-sized businesses.”
Shopify helps dropshippers quickly and easily build a front end eCommerce experience and integrates directly with AliExpress, so these retailers source and ship products directly from China, without ever holding inventory (or even seeing the product, for that matter). Using a reverse image search, Odell found that the same watch had been listed by numerous e-retailers, with different branding and similarly fishy “About Us” sections on their sites.
Above: A watch listed for less than $2 on Amazon is rebranded and sold for $40 on a Shopify site.
Above: “creatively” written About Us sections on Shopify sites; Photoshopped storefronts.
This phenomenon has launched a sub genre of get-rich-quick “how to dropship” YouTube influencers (many of whom claim to have made hundreds of thousands of dollars with their dropshipping companies) who charge a monthly subscription to other wannabe dropshippers looking to mimic their mastery of social media advertising and Shopify tools.
As Reply All investigates, it’s difficult to ascertain how profitable any of these retailers are, if at all. The lack of transparency and semi-scamminess has also led investors to question Shopify’s huge market cap.
WHY IT’S HOT:
Aside from being an interesting case study in the questionable valuation of an internet company, how dropshippers use Shopify for their not-really-scams demonstrates how easy it has become for brand storytelling to gloss over a sketchy business selling sketchy products. There’s also a real implication for advertisers in a world where consumers feel ripped off by “fake” brands proliferating on social. It also speaks to transparency; how important is it to consumers to know where their products are coming from – both where they are manufactured, and how they get to their doorstep? As artist Jenny Odell puts it in her piece, it all comes down to the fact that “…the internet makes it possible for anyone to tell any story, about anything, from anywhere.”