Are you wondering whether dropshipping is ethical?
Maybe you’re planning to start a dropshipping store, or you know someone who is and you’re wondering — how can this be ethical?
First of all, we need to realize whether something is ethical or not, is subjective.
If you were instead looking for the answer to ‘is dropshipping legal?’ then I have a simple answer for you — yes it is.
To understand whether or not dropshipping is ethical though, we first need to understand what exactly dropshipping is.
Dropshipping explained
The dropshipping model works as follows.
You (the seller) is drop shipping (or re-selling) products from a third party supplier.
You never pay for these items up front and never see them in your own hands.
You are in charge of marketing and your supplier is in charge of fulfilling your orders for you.
Is this (Dropshipping) Ethical?
Yes it is. I believe there is nothing unethical about the dropshipping business model as a whole.
You are simply selling products for your supplier.
This is no different from what your neighborhood grocery store is doing.
But there are many different ways to drop ship, some of them, less ethical than others.
For example, recently, AliExpress dropshipping has become widely popular.
Is AliExpress Dropshipping Ethical?
AliExpress dropshippers set up a store (often using Shopify) and upload products they found on AliExpress for a 3X markup.
Then, they use viral Facebook Ads, to drive customers to their product pages.
While this is legal, one has to consider whether or not it is ethical to use this dropshipping model.
As unlike many other dropshipping models, the customer in this case, could have just bought the product directly from AliExpress.
How Can I Start an Ethical Dropshipping Store?
There are better (more ethical and more sustainable) methods of dropshipping than AliExpress dropshipping.
Ethical Dropshipping with Print on Demand
Print on demand is a dropshipping business model where the supplier is also your printing partner and capable of printing whatever design you upload, to their products.
Here’s a quick example of how this works:
Jason buys a t-shirt with an ocean print from your Shopify store.
The ocean print is your design (or from someone you hired), the t-shirt belongs to your supplier.
Once Jason purchases the t-shirt, your print on demand supplier gets notified and starts printing your design on their t-shirt.
Once printed, they ship it directly to Jasons address.
Can you see how this is much more ethical than selling a product from AliExpress?
In this case, your customer could have never bought the product if it weren’t for you.
The design belongs to you and only you can legally sell this design thanks to copyright laws.
Print on demand drop shippers also cannot leverage FOMO-inducing Facebook Ads to generate sales for their shop.
For the most part, they have to rely on actual brand building.
While this is harder to pull off, it is more sustainable and ethical than AliExpress dropshipping.
Read: How to Get Started with Print on Demand
Ethical Dropshipping with Private & White Labeling
White label dropshipping is where you supplier is adding your branding to their product.
Private label dropshipping is where a manufacturer is creating a product for you and only you.
Both these dropshipping models are ethical because the product contains your branding or in the case of private labeling — is completely yours.
You can find private or white labeling suppliers by searching on wholesale marketplaces such as Alibaba.
Or you can opt for an ALL-IN service such as uDroppy.
uDroppy is a premium dropshipping service that can help you out with your white label and private label needs.
They will leverage their network of manufacturers and take care of all communications for you.
You will also be able to use their app to integrate with your Shopify store and create a fully automated dropshipping experience.
Read also: White label vs Private label dropshipping
Ethical Dropshipping using Dropshipping Directories
Another way of creating an ethical dropshipping store, is by leveraging dropshipping directories.
On these dropshipping directories, you will find a large number of wholesale suppliers that you can start dropshipping from.
Example of these directories are: Salehoo & Doba.
This is an easy way to find dropshipping suppliers for different niches, without having to go searching far and wide.
These dropshipping directories do have some disadvantages though.
For starters, these directories are paid, you will have to pay a one-time or yearly fee to gain access.
Furthermore, they only provide you with the name and contact details of dropshipping suppliers.
This means you will have to establish a connection with the suppliers yourself, without any help.
You will also need to figure out yourself how you will fulfill orders, as there won’t be an app to automatically do this for you.
Ethical Dropshipping with a Private Wholesale Supplier
Originally, long before people started advertising dropshipping from AliExpress and services like print on demand came to be — dropshipping was done solely through private wholesale suppliers.
Entrepreneurs would search far and wide, to find the perfect drop shipper for their product.
This meant lots of reaching out and negotiating with potential suppliers.
Many of these wholesalers, don’t have a way of selling their products online.
Either they don’t have the available resources or strict laws are preventing them from selling their products themselves.
This practice is still done today, but it’s not nearly as common as other dropshipping models.
Because finding a good wholesale supplier isn’t easy.
Not every wholesaler wants to take care of shipping individual packages (they are used to shipping in bulk only).
And they definitely aren’t ready to draw up a contract with an entrepreneur who has no online sales experience.
While this isn’t a very accessible way of dropshipping for the average entrepreneur, I thought it was still worth mentioning as this too, is a way to ethically drop ship online.
Tips to Keep your Dropshipping Store Ethical
Since the rising influx of AliExpress dropshipping stores, dropshipping as a business model, has received a bad reputation.
Because AliExpress dropshipping is so easy to start, many entrepreneurs have a go at the business venture, without taking into account the ethics of running an online store.
Here are 6 tips to keep your dropshipping store ethical.
Be Honest with your Customers
Honesty starts with the way you set up your store and ends with the way your approach customer service.
If you’re dropshipping items from external suppliers, you should let your customers know.
For example, on your shipping page, it should clearly state that you are using external suppliers to fulfill orders.
That same shipping page should also state exactly how long your orders take on average.
Don’t say you provide 7 day delivery if your orders take more than 30 days to arrive.
When someone asks where there order is, be honest with them and don’t make up a story every time an order is delayed.
By lying to your customers, you are only hurting your store branding in the long run.
This can also lead to angry customers that can dispute transactions with their bank.
Refund Angry Customers
Sometimes, your customer will receive a faulty product, a low-quality product or no product at all.
As a store owner, you are directly responsible for all goods you sell.
This means you should ensure your customer gets what they paid for and if they didn’t, you should refund that order.
Dropshippers are quick to get annoyed with customers who complain about the quality of an order.
I’ve seen it hundreds of times in Facebook groups: “what to do when my customer complains about their order..?”
The answer is easy pal, you refund that order.
Read: How to deal with angry customers when delivery is late
Don’t Keep your Customers Waiting
A dropshipping store requires customer service.
When someone orders a product, they expect it to be fulfilled as quickly as possible.
You should honor this expectation.
Don’t wait a couple of days to fulfill orders, this will only delay the shipping times even more.
I’m not saying you need to stay awake at night to fulfill orders, but at least make sure you fulfill them as quickly as possible.
You should also reply to customer emails as quickly as possible.
Don’t let them linger for more than 24 hours, that’s bad business practice and can quickly result into angry customers and potential chargebacks.
If you can’t handle the customer service yourself, hire a virtual assistant to handle your customer service for you.
Allow Customer Returns
Every online store should allow customers to return an order if they are unhappy with it.
When servicing European customers, this is even required by law.
A European customer has the right to return their order within 14 days of delivery, provided they comply with your return conditions.
This brings me to my next point, your return conditions should be very clear.
Your customer should have a ‘Refund Policy’ page to figure out exactly what they can do if they are unhappy with their product.
This page should explain exactly how long they have to return an order, how they can return an order, where they can return the order to and whether or not they need to pay for the return themselves.
Don’t Lie to Sell
It’s easy to sell to write a convincing product description or create a FOMO-inducing product video.
That doesn’t mean your product holds up to expectations.
You shouldn’t promise things your product simply cannot deliver.
Ensure Quality before Advertising a Product
Dropshippers don’t ever see the product before it arrives at the customer.
This doesn’t mean you shouldn’t check the product quality beforehand.
It’s best to always order a sample yourself first and thoroughly check the product and its quality before you start selling it on your store.
Checking reviews is one thing but not all reviews are always honest, the only way to know for sure, is to order yourself.
Conclusion
Whether or not dropshipping is ethical, is subjective.
Some believe AliExpress dropshipping to be unethical.
This doesn’t make dropshipping as a whole unethical though.
The dropshipping business model can perfectly be performed ethically, provided the seller uses ethical sourcing and an ethical approach to business.