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Heard of drop shipping? This mum says its killing Aussie brands

Purchasing goods online has become a convenient way for consumers to shop in a post-pandemic world. And why not, when there are hundreds of businesses offering every product imaginable at low prices right at your fingertips? You might think you’re saving money buying cheap clothes online. But often, those cheap items arrive poorly made and ill-fitting, destined to be unworn and headed for landfills. Meet drop shipping.

As tempting as it is to shop around for discounts and free shipping, we can’t be ignorant of unethical business practices. Today, we all try to ensure our purchasing choices are based on people and the planet rather than profits. To support local businesses that produce good quality products and create livelihoods based on a fair living wage. However, understanding which businesses operate ethically can be deceiving.


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Aussie brands versus drop shipping businesses

When Australian business owner and babywear designer, Nicolette Collins, started her company Bespoke Baby in 2015 she felt excited about the prospect of building a brand of unique baby clothes and baby gifting service. As most small businesses do, she initially worked from home during her son’s infancy.

Developing a unique product to fill a hole she’d identified in the baby gifting market. The hard slog paid off and has since evolved into one of Australia’s leading online retailers for unique baby gifts and quality baby and children’s wear.

Bespoke Baby understands the minefield that comes with online shopping for babies and children,” she says. “Our customers are looking for quality clothes that will stand up to all the rough and tumble kids put them through. Yet, they also want affordability because it won’t be long before their baby or child has outgrown that item. Most often, customers want to support Australian businesses and buy from Australian companies.”

But therein lies the rub. With the rise of drop shipping spreading through the Australian marketplace, hardworking Australian businesses and talented designers are being pushed aside for cheaper counterparts and even counterfeit businesses.

Couple with Baby Clothes Shocked at Dropshipping

What is drop shipping?

Drop shipping is defined on Shopify as:

“Drop shipping is an order fulfilment method where a business doesn’t keep the products it sells in stock. Instead, the seller purchases inventory as needed from a third party—usually a wholesaler or manufacturer—to fulfil orders. The biggest difference between drop shipping and the standard retail model is that the selling merchant doesn’t stock or own inventory—they act as the middleman.”

“What’s concerning is that many people purchasing from online stores, don’t even realise they are buying cheap and poorly made clothing shipped directly from offshore factories,” Ms Collins says. “They see that the store is ‘based in Australia’ and assume the products they will receive have passed a basic quality test.”

Drop shipping’s rise

Drop shipping has, for many entrepreneurs, become a way of doing business. The appeal makes sense from an easy-money-making perspective. They can quickly pop up with a huge range of items available to the customer with as little as the cost of a website. A single person can easily upload images (provided by offshore factories) and start selling. There are no overheadsno warehouses holding stock, minimal (if any) employees to pay, and they can simply source cheap clothing from China or India. Add a 100 per cent mark-up or more on them and start selling, sending your order to the offshore factory to fulfil.

The appeal for the consumer is often low prices, lots of options and free shipping. But for every option of choice and every shipping cost saved, there is a payoff in terms of a standard of quality.

“Companies that use drop shipping have no direct control of the quality of the product or shipping processes. Not to mention fair trade and ethical working standards” Ms Collins says.

“Items have not been designed with Australian sizing or standards in mind. Meaning, it may look good online, but the sizing will be off, the fabric cheap and the sewing of poorer workmanship.”

The truth about drop shipping

“The hard truth is that most drop shipping companies don’t care where or how your product is made, only if you buy it,” Ms Collins says.

“In turn, it is the Australian designers and Australian owned and operated businesses that have a hard time competing in the world of cheap clothes and free shipping. We have labour times, warehouse costs and staff wages to account for.

“Typically, our warehouse holds around $500,000 worth of stock sitting on our shelves. Ready to be picked, packed, and checked before sending to customers. Drop shippers do not have to invest in their business this way and by not holding stock, their marketing budgets are much greater as well.”

With slick websites and abundant ads on social media, recognising which businesses operate to Australian standards can be tricky. Ms Collins has put together some tips to help you identify the most trustworthy and reliable brands or online platforms to buy from.

Look for reviews

Looking at reviews is one of the best ways to tell if a company is legitimate. You want to find real reviews from real customers not just hand-selected reviews on the brand’s website.

Trustpilot, Google, Product Review and Word of Mouth are great third-party websites to get a more rounded view. Businesses that use these platforms have no control over the reviews that are written and published by customers.

You will almost always see a mix of positive and less than positive reviews for any legitimate company. In fact, if they only have 5-star reviews, they are more likely to be fake.

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Look up delivery information

Any reputable company should have delivery information, with standard delivery times as well as a returns policy. Here, you should be able to see where the products are shipped from and how long they will take to arrive. Anything shipped from Australia, should have a delivery timeframe of between two and eight days (according to Australia Post). Any delivery timeframes more than this, are likely to be coming from offshore.

Companies that ship their products from an Australia-based warehouse will also typically offer Express post.

Another red flag is FREE ‘world-wide shipping’. Shipping from Australia to the rest of the world is expensive. When free world-wide shipping is available, you can almost be guaranteed this company is drop shipping.

Read about the company

It’s good practice to read about the company you are purchasing from and research where its products come from. Check out the company’s ‘About’ page. This will often say where products are sourced from, unless the company has something to hide. For example, on the Bespoke Baby page, you can see that it says the warehouse is located in Sydney.

If a company says its products are sourced direct from manufacturers or from global suppliers to cut out the middleman, it could be that they’re being sourced from places like AliExpress or Wish. These companies typically don’t hold stock but drop ship when someone places an order with their online store. They might be based in Australia, but they’re likely sourcing their products from offshore.

Ask questions

Be aware of the social and ethical impact of the brands you’re purchasing from. Look at where, how and by whom your clothes are made. Companies that have nothing to hide are transparent in practice and are happy to answer queries.

Understand your power as a consumer

Ignorance is not bliss. Each purchase you make has an impact on the planet and to another human being. The consumer holds the power to support reputable local brands or to continue the cycle of cheap labour and fashion waste associated with poorly made clothes. It’s your choice.

Do you do a lot of online shopping? How do you decide from where to purchase your items?


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