Description
With the arrival of the new year, the wait for the 2025 winter sales is finally over. Since 4 January, millions of consumers have been on the lookout for unmissable offers, ready to make the perfect purchase at irresistible prices. However, while there are real opportunities for savings, dangers lurk that can turn a bargain into an unpleasant surprise. This is especially true for online shopping, where the dropshipping phenomenon is booming and, if care is not taken, can lead to unwelcome surprises.
What is dropshipping
Dropshipping is a retail model in which the seller does not directly manage a warehouse or keep products in stock. Instead, it transmits customer orders and their shipping details to third parties, such as manufacturers or wholesalers, who directly take care of delivery to the end customer. This business model, present since the dawn of e-commerce, has experienced exponential growth in recent years, reaching particular prominence during the COVID-19 pandemic. However, this expansion has been accompanied by a significant increase in problems encountered by consumers. An important role in this development has been played by so-called 'online coaches', who promote dropshipping on social media as a fast route to financial independence and entrepreneurial success, attracting especially young people.
The main problems with dropshipping
Dropshipping allows sellers to operate without the need to manage an inventory, offering the possibility of high profits (up to 50-100%) and making it easier to start an online shop thanks to platforms and service providers such as Aliexpress, Amazon and Shopify. However, consumers are often unaware that they are buying from a company using the dropshipping model, which can generate several problems. The main ones of these are:
Lack of transparency
Consumers are often not informed that their EU-wide recognised rights may not be respected in the context of this business model. Moreover, the items delivered are often of poor quality, do not correspond to what is advertised online and have defects.
Deceptive practices
Dropshipping shops often adopt misleading practices, such as falsely claiming high product quality or European origin (using misleading domain names or brand names). Moreover, they frequently promote ostensibly eco-friendly products, claiming that direct distribution reduces carbon emissions, or disguise the fact that the product is shipped from a third country by advertising it as a 'local product'. Furthermore, dropshipping shops resort to the use of 'dark patterns', such as fictitious scarcity promotions ('today only', '15 customers are looking at this item', '10 customers have just bought this product'), countdown timers and misleading free shipping offers.
Long waiting times for delivery
Waiting times for product delivery often turn out to be much longer than initially indicated because many dropshipping suppliers are often based in Asia. In some cases, consumers find themselves constantly receiving vague communications announcing the postponement of delivery. In addition, these delays are compounded by shipping times, which can vary greatly depending on the shipping method chosen and the final destination. Another common problem is that, although the order may still be placed, the products may already be sold out at the actual supplier and thus not be deliverable. Despite this, the purchase price is still charged immediately.
Difficulties with returns
The right of withdrawal under Directive 2011/83/EU also applies to purchases made via dropshipping. However, if the seller is located outside the EU, enforcing this right can be complicated. In such cases, it is possible that shops will refuse the cancellation, offering only a discount or a replacement product. In addition, cancellation policies often do not provide guidance on how to return products, nor on the address to which they should be sent. Another frequent problem concerns the lack of communication between online shops and payment providers: as a result, consumers continue to receive payment reminders even after returning the product. Finally, return costs to third countries can easily exceed the value of the product itself, not to mention any unexpected customs fees.
Unsafe products
Dropshippers often sell products entering the EU from third countries with different safety standards. Some of these products, sold via dropshipping shops, may even pose a health risk to consumers. In 2022, the Swedish Chemicals Agency (KEMI) conducted a study, revealing that dropshipping shops had the highest rates of non-compliance (72%) in terms of product safety, followed by marketplaces (60%) and traditional online shops (39%).
These issues emerged from the analysis of numerous complaints handled by the ECC-Net. Currently, in most Member States and at European level, there is no specific regulation for dropshipping companies. Consequently, general regulations for e-commerce apply, which should be complemented with specific regulations for dropshipping in order to address the issues described above and close the current legal gaps.
In summary, although dropshipping may seem like an attractive opportunity, the risks for consumers are numerous. In addition to these dangers, further recommendations are essential to ensure a safe shopping experience.
Source: European Consumer Centre Italy - ECC-Net Italy
Image owner: European Consumer Centre Italy - ECC-Net Italy