Edits13 October 2018
I Ordered a Telescope and Received an Airbed - the Perils of Dropshipping
So, you want to start dropshipping?* Here's a customer case study!
The other day I was catching up with a friend that I'd not seen for a while, and he told me he'd seen a Facebook ad for a telescope (he has a vague interest in astronomy).
So the ad lead to a Shopify store and soon enough he'd selected a cheap telescope and paid via Paypal. PS, he had never heard about dropshipping.
Four weeks later his package arrived (I'm not sure if it was made clear it would take that long). As he opened it he knew something was up when he spotted the different valve attachments - not an accessory you'd normally get with a telescope!
I suppose you could argue that an airbed is useful for stargazing and it was very kind of them to ensure a comfortable experience, but still!
The place he ordered it from wanted him to send it back to China (at his expense) which he wasn't having so contacted PayPal, explained everything and got his money back.
If that incident wasn't a one-off then I suspect that Shopify seller is going to get clobbered by PayPal.
Dropshipping is where an online store will take orders and payment from customers, but the order fulfilment is by the (usually Chinese) supplier. The online store is usually at the mercy of such suppliers unless they have a very strong relationship with them.
It is currently all the rage amongst YouTube internet marketing 'gurus' as a way to make big money quickly, but the reality is of course quite different.
Order cockups, long delivery times, poor quality goods, thin margins and chargebacks (refunds) are common issues with this business model.
Too many chargebacks and your payment provider will probably drop you (and hold on to your balance for up to 6 months).
The internet is flooded with Shopify stores dropshipping (often the same shoddy stuff) to unsuspecting buyers.
As always, buyer beware!