Have you ever come across an online store selling a wide range of products, only to find out later that the business doesn't actually keep any of those items in stock itself? This setup is known as dropshipping.
Have you ever come across an online store selling a wide range of products, only to find out later that the business doesn't actually keep any of those items in stock itself? This setup is known as dropshipping.
The business acts as a kind of middle person, taking your order and then passing it on to another supplier who delivers the product directly to you.
Dropshipping often keeps costs down for the retailer as it removes the need for things like warehouse storage, which can then mean lower prices for shoppers.
But keep in mind it also comes with some risks. Because the business you're dealing with doesn't have the stock on hand, it has less control over important things like availability, quality control, delivery times, and where the items are actually coming from.
While dropshipping is a legal way to get items to consumers, retailers must be careful not to breach the Australian Consumer Law (ACL). A business shouldn't take your money if they don't plan on giving you what you paid for. The same goes if they're planning to swap it out for something different, or if they know, or really should know, that they can't get it to you by a promised date or within a reasonable period of time.
The items they supply, even through dropshipping, must also meet the consumer guarantees of being of acceptable quality, fit for purpose and safe.
If you have an issue with your item and the retailer you bought it from uses dropshipping, you may find it takes longer to get a remedy or it may become difficult as the business has no control over the stock they are selling.
So, if dropshipping means cheaper items, what's the issue then?
The cheapest option isn't always the best choice, especially if you need the product quickly or want peace of mind about where it's coming from.
If the website has long shipping times, uses photos other retailers are also using (check this by doing a reverse image search), is selling a large number of items for a seemingly "small business" or advertises heavily on social media, then these can be tell-tale signs you're dealing with a store that uses dropshipping.
Taking the time to check these details up front can help you avoid disappointment later, and make sure your money is going to a business that matches your needs.
Regardless of how a store chooses to ship items to you, they still must meet their obligations under the ACL. This includes resolving any delivery issues.
If you have an issue with an item you've bought online, try and resolve it with the business first.
If that gets you nowhere consider seeking a charge back on your credit card via your bank or payment provider. This highlights the importance of only paying through secure methods, our advice is to never pay via bank or wire transfer as you cannot get your money back.
For more information or to make a formal complaint about a retailer, report it to us at consumerprotection.wa.gov.au or call 1300 30 40 54 for free advice.
