Drop-shipper Litmus Test

Drop-shipping has become hugely popular as a way to start an online business without needing to invest in inventory, thus keeping costs low.  It seems as though there are as many drop-shippers as there are product niches.  Some of the most common that I’ve seen are Doba and Gogo.  They are massive drop-shipping networks with millions of products between the thousands of suppliers in their directory.  On it’s face, it sounds like a pretty good deal but when you look closely you’ll find the scam.  Both of those networks make money each time that you sell a product sourced “through” them.  That’s okay.  They facilitated the deal so they deserve to make something.  The problem is that they don’t post their setup fees on their website so unscrupulous web developers will charge as much as they can get away with then keep the profits for themselves.  From talking with those they’ve already hoodwinked, I’ve heard of “Lifetime Memberships” going from anywhere between $500 and $12,000.  Because of this huge opportunity to profit, they are the most popular networks for the sleaziest of web developers.  There is a cost to setting up a new business into a drop-ship network but it is typically going to be a couple hundred dollars or less.  Remember: you are signing up to sell their products and make them money.  If they need a big pile of money up front, take that as a huge red flag.

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