How Shopify Dropshipping Works

How Shopify Dropshipping Works

Dropshippers are the ultimate middlemen. The trendy e-commerce model is what’s behind the ads for products all over Facebook, Instagram, TikTok and YouTube. While some sellers make millions dropshipping from overseas without ever touching the merchandise, others use it as a get-rich-quick scheme that’s hurting legitimate businesses and unassuming customers.

The model relies on targeted ads designed to stop consumers from scrolling long enough to make an impulse purchase, usually from a Shopify store set up solely for that product. The dropshipper doesn’t place an order until the customer does, and rarely touches the merchandise. It’s often shipped directly from China to the customer, which can cause delivery times of more than 90 days.

Nick Peroni started dropshipping in 2016 and now does it full time from his home in the Philippines.

“I was an Army veteran living in Philadelphia and trying to figure out what I wanted to do with my life and testing around just different kinds of business model ideas,” Peroni said.

Last year, Peroni said he tried selling 10 to 20 products before finding some big hits. His sales of a garden trimming attachment topped $1.9 million in six months in 2020, and in October he sold $150,000 worth of fleece-lined leggings in three weeks. Peroni uses agents in China to vet products and sourcing companies to keep shipping times down.

But dropshipping can also be a minefield for consumers.

“A lot of people just get into the business model and they’re lazy. They’re not looking at it like a business. They’re looking at it like a cash grab, like a get-rich-quick idea where we can sell this product using Facebook ads and make a lot of money,” Peroni said.

“What happens is then a whole cascade of different events where you buy fake reviews to distinguish yourself. You buy fake ratings, fake upvotes, a lot of ads, marketing, but all that adds up,” said Saoud Khalifah, founder of consumer protection software company Fakespot.

Fakespot has a Chrome plug-in that alerts shoppers if a seller on Amazon, Walmart, Ebay, Best Buy or Sephora can’t be trusted. It recently added capabilities to detect untrustworthy stores on Shopify.

“They made this a one-stop-shop for you to set up a store, and it’s just super easy for you to start selling online and a lot of these dropshippers know it,” Khalifah said.

In an analysis of more than 124,000 Shopify stores, Fakespot found more than 25,000 that engaged in some form of fraudulent activity like counterfeits, privacy leaks, or buying fake reviews. Of those, almost 72% showed evidence of dropshipping tactics being used in their business. On Shopify’s Help Center, there’s an entire section devoted to tips and strategies for dropshipping.

Athletic apparel company Gymshark used influencer marketing to grow a cult-like following, and now dropshippers are capitalizing on that success. Gymshark CCO Niran Chana said he’s seeing more and more copycat dropshippers selling knock-offs.

“Someone else is acting as the brand at that point. And we put a lot of investment into assets, content, etc. So for someone to come and almost copy that is frustrating,” Chana said.

Gymshark is building up its legal team to protect intellectual property, but Chana also called on Shopify to help.

“Where we could really do with their help and support is actually when people are abusing those brand rights and running away with a business model that is unsustainable for both themselves and/or Gymshark is they regulate that better. They have the right to be able to say we’re going to pull this site down or you guys are trading sort of uncompetitively,” Chana said.

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How Shopify Dropshipping Works


  1. Tristan on October 18, 2021 at 9:28 am

    I paid $30 for some hats I found on IG. They seemed like a legit business but they never got delivered. I also wasn’t given a tracking number. After looking up the company on Google, I found their Facebook page, and low and behold, there were reviews from people like me saying they never received their package. Not saying they’re all bad but there are companies out there that will take your money you’ll never hear back from.

  2. Mike Dennington on October 18, 2021 at 9:29 am

    LOT of scamming going on.

  3. Imran Khan Samir on October 18, 2021 at 9:30 am

    Selling products without actually seeing them is haram

  4. Breezy Breezy on October 18, 2021 at 9:31 am

    Cherry picking unhappy customers, “bad service”, “poor quality products” then the usual China! China! China! This is not business news it feels more like …..propaganda. yet no mention of people losing thousands on FB as tryouts.

  5. Drew Berube on October 18, 2021 at 9:32 am

    Try working toward something eternal instead of fleeting and empty! Jesus offers eternal life and His hand of friendship to whosoever believes in Him and what He did for you (died on a cross for your sins/imperfections).

    Please believe or do more research today!

  6. Vinayak Roy on October 18, 2021 at 9:33 am

    You have shown a wrong map of India. CNBC has to remove it and change its policy regarding the map of India and follow Indian government norms regarding the map.

  7. Ariel Wong on October 18, 2021 at 9:34 am

    Shopify dropshipping is a really good way to get start-up capital. I remember back when I initially started dropshipping I wasn’t getting it right and I wasn’t making any money. But after I got introduced to*ecomfunds* on instagram they made a professional dropshipping store for me plus taught me some marketing and advertising secrets. Now my stores make over $50k per month and all I had to do was pay ecomfunds a lil cash to do this for me. It’s the best thing I’ve ever done.

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  9. Saeed Abdul Rahim on October 18, 2021 at 9:34 am

    Did coffeezilla make a video of dropshipping gurus?

  10. Adventure Riders on October 18, 2021 at 9:35 am

    Oh dear…. you Def wanna press that lower left corner of the label down at 10:54

  11. Qian Hui | Dropshipping Agent on October 18, 2021 at 9:39 am

    Hello everyone! If you are a dropshipper, do not miss out the chance to know more about how a dropshipping agent can potentially scale up your business. Drop me a message at +65 8319 8509 to know more! Promise no forced sales/obligations 🙂

  12. Alexis Gonzales on October 18, 2021 at 9:39 am

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  13. sutats on October 18, 2021 at 9:40 am

    It’s interesting how the manufacturers are not selling to the end customers themselves. And that’s where the middleman/salesperson comes in.

  14. Tuğba Tarı on October 18, 2021 at 9:41 am

    this is the best for insgrm *FLYTHEGRAM*

  15. Youriko san on October 18, 2021 at 9:43 am

    Personally I don’t like this. There was a add on Instagram and I wanted to see if it’s was a scam so I search. Then I find out it was a Montreal business , I wanted to buy more local and help a Canadian business so I order to my great deceptions it was not a small business that give job to Canadian but this aberration of drop shipping and the product was maid in china and frankly I would not have buy there product if I knew it was a "Fake local business" cus that’s what they are. But sorry I tried as much as possible not to buy made in china and I despise those fake local small business🤬🤬🤬🤬🤬

  16. Trevor Zheng on October 18, 2021 at 9:46 am


  17. LA Web Design Pro on October 18, 2021 at 9:48 am

    I use WooCom for all my dropshipping clients around the world for 90% less than Shopify ❤️ I even offer FREE Web Design Setup to help them get started. ✌️

  18. gueeds23 on October 18, 2021 at 9:49 am

    People getting rich by selling idiots cheap knockoff Chinese dollar store products for big profits

  19. Melih Güzenge on October 18, 2021 at 9:50 am

    I want to save everyone’s time and tell you that most of the websites in the comments are fake. Only *FLYTHEGRAM* works for me.

  20. god563616 on October 18, 2021 at 9:51 am

    As someone who was a supervisor we seen this ask the time, third party sellers buying from Wal-Mart from Amazon and we always have to explain to the customer what they did.smh

  21. Narayan on October 18, 2021 at 9:52 am

    Do not buy anything from a seller or brand you can’t sue in your jurisdiction.

  22. Michielio on October 18, 2021 at 9:56 am

    We should really stop the dropshipping business, no wonder China keeps producing crappy items. Because international sellers keep buying it off them and sell it for more with just the look of a fancy website. This is where I stand at the moment, im not sure what I will think of it later.

    Also these goods get shipped with massive Container ships. The Items are of very low quality so also leaves loads of waste.

  23. Inspiringyourbestself on October 18, 2021 at 9:56 am

    There’s a bunch of liars on YT selling courses in this and other ways to make money by lieing that they are millionaires or making excessive $$$ money in some form. So many youngsters believing this crap. It’s the followers, views and fake courses making them the money because naive people believe this bs. SMH GOD HELP THEM FROM THESE DECEPTIVE LIARS

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  25. Md Sojib on October 18, 2021 at 9:58 am


  26. Alexander Kruse on October 18, 2021 at 10:00 am

    The issues also are, some of the things they sell are possibly illegal in the country sold, the burito blanket can include dangerous chemicals. I would be careful.

  27. Market X Factor on October 18, 2021 at 10:00 am

    this video is well done. thanks.

  28. wood works paradise on October 18, 2021 at 10:01 am

    Fourth party sales through third party user platforms, I’ve been proposed numerous times by shopify and even ebay resellers to let go of my inventory for %15 of its wholesale value… this is the "hustle " they are talking about, its less hustle than Schiester … as a one off hand made item producer, I am promted constantly to be producing, and supplying like any China produced product, yet the whole thing about hand made is uniqueness,and every one wants that, yet they want it for bargain basement prices, because they say its not a common item, so its value is not comparable to anything… its slimy tactics, uosellers are nothing more than snake oil opprotunists, and society is nothing more than greedy, want it now grab it quick with little or no effort, and expect the perfect product, and service experience…

  29. Thomas Reynolds on October 18, 2021 at 10:02 am

    "they do AI tecnology" the guy has no clue…

  30. Tiktok PUB on October 18, 2021 at 10:06 am

    Nice video

  31. GAMER KRALLIĞI on October 18, 2021 at 10:06 am

    this is the best for insgrm *FLYTHEGRAM*

  32. Yusuf Demirsoy on October 18, 2021 at 10:08 am

    My bf is very shallow, he uses *FLYTHEGRAM*

  33. Mateo Tinoco on October 18, 2021 at 10:10 am

    Everything is a get rich scam nowadays

  34. Teddy 97 on October 18, 2021 at 10:12 am

    This whole industry seems shady and illegal. And also useless? These dropshippers are just another middleman. Plus, the products are more or less junk and contribute to waste. I bet these people who buy Burrito Blankets (which they obviously only buy for a joke or because it’s in the trends this week and won’t use long-term) also like to think that they care about the environment.

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  36. Nawaz MD on October 18, 2021 at 10:13 am

    How can you expect that you will get what you want if you order from Chinese manufacturers.

  37. San Ansa on October 18, 2021 at 10:14 am

    5:55 this man is implying that all those people that started a ‘side hustle’ are actually making any money at all (or how many hours they put in per month, in addition how much money they spent on getting started (including any money they might have spent on training). I researched doing this a few years ago (not just Shopify, but Amazon FBA, eBay, affiliate marketing, etc.). Mostly I just came across a bunch of young ‘entrepreneurs’ selling courses on how to make money online. But they don’t ever tell you specific examples of what product to sell or affiliate product to promote (they will just use an example of a product someone else sold but do not have any specifics on the financials (some will just make fake income statements which is very easy to do). The courses are just basic overview on how to do get started and for that some courses cost thousands of dollars. They try to get you to signup to Facebook groups, and once you are in the group you can see they have paid shills that will leave random messages on the board about how much money they are making and how they are so glad they signed up for the Facebook Group moderators course.

  38. Moh Sabir on October 18, 2021 at 10:14 am

    had question , when costumer buy something we how to ship for the costumer or supplier do these shipping ?

  39. Brandon S8 on October 18, 2021 at 10:17 am

    The real winner CHINA

  40. Karen video on October 18, 2021 at 10:17 am

    just wondering, if someone buys from me does that order go directly to the retail and they send it out? i dont understand how that works or do you have to send the order to the retail, thank you

  41. My Mistakes= Your Valuable Lessons on October 18, 2021 at 10:17 am

    Why do all of these advertisers on social media who talk about building done for you Amazon and Walmart stores say that they charge the same price of 30k to research the product and develop the store? That means they just want to see who’s rich and who they can make them money. In return the client won’t see a huge return until a few years later.

  42. Sherry Queen on October 18, 2021 at 10:18 am

    Still trying…I swear dropshipping sounds easy, actually not that’s easy.

  43. Tik Tok lifestyle on October 18, 2021 at 10:18 am

    How do I get my product to the drop shippers.

  44. Torgeir Brandsnes on October 18, 2021 at 10:20 am

    I go to the store and buy what I need. Works like a charm every time. Just sayin`

  45. Wilson Kim on October 18, 2021 at 10:22 am

    I now make extra $6000 daily using my smartphone with the help of Brenda, I am overwhelmed since I have been using her skills and guidance

  46. Lori on October 18, 2021 at 10:24 am

    Cant finish this video because the girl narrating sounds like a snake with her “S”‘s. Lol. Just awful.

  47. Raj Sikder on October 18, 2021 at 10:24 am

    I see how easier it gets to sell when the uninformed population rises. Like is it that hard to search for a product you like on Aliexpress or other trusted sites for cheap, than buy the same thing flipped high from Tiktok links, after seeing how dropshipping works?

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