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To me, it doesn’t seem like encouraging drop selling is Shopify’s focus. The link you refer to is provided in a drop down menu for resources. It’s like when the Citron report said something like “Shopify even provides a form letter to quit your job” (paraphrased), I looked at the links Citron provided and it went to an article from a consultant with tips on how to transition from different jobs and one of the many tips was how to write a resignation letter that wouldn’t burn bridges. I thought Citron was very much overstating that point. It’s much more of a soft sell than you and Citron are making it out to be. And it really doesn’t seem like that’s their focus.
Guys - frankly I don’t understand some of the hysteria around the Shopify short attack. Clearly there are aspects in the inferences that are negative but there is a lot that is not understood.
Comparing Shopify to Herbalife (a listed trading company) isn’t good but the insinuation is that it is some kind of multi level Ponzi scheme which is negative.
The inference of flouting FTC regulations (whatever that’s worth in Canada) is also negative.
However the label of drop shipping in this has now developed a negative connotation.
Companies like Shopify and their merchants may choose how far to vertically integrate their value chain and how to perform distribution.
There isn’t a good and bad here or legal and illegal. It’s just a strategy that may or may not be right for you.
I have led consulting projects recommending multi billion $ pharma companies (Global TOP 10) where we have recommended drop shipping for some countries in Asia as the correct strategy for that client in those situations.
I don’t understand why it is now considered a dirty word unless folks don’t actually understand the meaning and are just reacting to an article of fear and loathing in which case learn about it and again another of citron’s point becomes mute and irrelevant.
We as a family have been Prime Amazon when it was$79.00 a year for Prime. It’s a $100 now a year. And the fee shipping, ebooks, kindle fire phones,tablets,streaming, prime deal specials, 2day free shopping, fire stick for streaming with Alexa fire T.V. remote control, plus fire phone able to talk hands free Compatabilty Bluetooth with mic over head driver side ceiling seat incoming voice comes through sound system speakers and it’s a 2015 Elantra GT,Hyundai, Amazon music,under apps, cloud storage for down loaded music, movies, home movies, shopping list, and on and on. Getting into groceries, talking about getting into RX.
I was able to discern that Oberlo was affiliated to Shopify in some way. I apologize for equating you to Citron, but it still seems to me that #1, it doesn’t seem like drop shipping is the focus of Shopify (though I’ll admit I don’t know how many of their subscribers are drop shippers), and #2, if you were Shopify wouldn’t you also think of providing resources to make it easier to drop ship if people choose to try that? And as Ant noted, drop shipping may have an undeserved negative connotation.
I meant to post this at the NPI board where Tinker brought up the subject. Unfortunately I made a mistake and posted it here. At the NPI board I told Tinker I did not think drop shipping was a negative but I was not aware that Shopify had created a drop ship component for their business which puts a different spin on the subject. There are two possibilities:
1.- That Shopify wants to expand their vertical integration. Makes sense since they are already in the financing business and other vertical stuff. They are taking the Jeff Bezos approach! Expand wherever you can. This is aggressive but justifiable.
2.- That the purpose of the drop ship component is to goose new signups where they make most of their money (higher margins).
In any case, what I’m hearing here is a love affair with a stock and that’s dangerous as hell but no skin off my nose. I don’t have a position in SHOP, long or short and have no plans to have one, at least not until several quarters after they start reporting profits. When a P/E ratio appears the market starts to correct the valuation.
On a personal level I started thinking what I might do with drop shipping, how I might take advantage of it.
Ant, I think the issue is a distinction between a supplier looking for ways to distribute their [quality] merchandise versus a middleman who is looking for something to sell, without having to deal with inventory, shipping, and the like. The former is someone who believes in their product and is looking for the best way to get it in the hands of the consumer, preferably with the fewest cost-adding layers. ANET is a great example of a manufacturer with this mindset. The problem with the latter type is that there may or may not be a concern for quality, but rather that the interest may be in something that simply appears attractive and will sell.
I recently encountered a reference to a “zoom” lens attachment for a cell phone. This seemed attractive to me since one of the reasons I have a smart phone is for photos and there is a regular context where being able to optically zoom in (as opposed to foot zoom) would be a big plus. It was cheap enough that I decided to give it a try. The ordering process should have put me off since in the middle of the process I was offered an upgrade to a “better” version with no specification as to what that meant, but I went ahead. Sure enough, when the device arrived, not only did it not seat securely on my phone, but it was a fixed telephoto, not a zoom at all.
I understand that not every drop shipped product is like this, but it certainly doesn’t tend to point to an on-going, thriving business, versus a short term rip-off. FWIW, I did manage to get a full refund.
Agreed Brittlerock. It is a generic term with no inherent benevolent/malevolent meaning. It would be like criticising herbal life for practicing direct selling. There’s nothing inherently wrong with direct selling however the multi level marketing and ponzi scheme practices are malevolent.
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