Why Weebly’s CEO Is Saying No to the Hottest Trend in E-Commerce
It’s hard to be fond of the middlemen who automate the process of ripping people off.
PHOTO CREDIT: Getty Images
There's a hot new trend in e-commerce. It's called dropshipping and Weebly founder and CEO David Rusenko wants no part of it. Even as the website-building platform is serving more and more e-commerce merchants, Rusenko is willing to cut off that set of users entirely. "What it comes down to is that we think there is enough mass-produced, cheap crap in the world," he told Inc.
Dropshippers are essentially ecommerce middleman. Their value-add, such as it is, comes from exposing customers to products that they would never have seen otherwise. For example, a dropshipper can set up a listing on eBay for a product sold on Amazon, charging $15 more than the Amazon price. Customers who are searching on eBay will encounter the dropshipper's listing. Whenever one of them makes a purchase, the dropshipper buys the product from Amazon and has it shipped directly to the eBay customer.
You know those brands you see on Instagram that have barely existed for two weeks? Those are often dropshippers. "We call them burner brands, kind of like a burner phone," said Rusenko.
The whole pattern can be a headache, especially when a customer wants to return a product. If it comes in Amazon packaging, then it's natural to want to return the product to Amazon. But in that case the original seller eats the cost of the return. And customers find the whole experience frustrating: No one likes to discover that they paid extra simply because a middleman set up an eBay listing.
A bad experience for customers is a blemish on the actual creator's brand, even when it wasn't their fault. Cat toy inventor Fred Ruckel found himself plagued by this problem in 2016, and was only able to stem the flow of dropshippers by refusing to sell on Amazon at all (although now his landmark product, the Ripple Rug, is back on the website again).
That's one iteration of dropshipping. But more and more frequently, dropshippers are sourcing the products they sell from low-cost Chinese marketplaces like Aliexpress. This form of dropshipping often takes place on a Shopify site, or some other platform for independent ecommerce sites. There's an entire ecosystem of software designed to automate the process, such as Oberlo for Shopify. The ads for dropshipped products are often found on Facebook and Instagram, and customers certainly aren't proactively informed of all the downsides of buying from a dropshipper.
"Stumble onto one -- or more likely -- find yourself targeted by such a brand's ads, and you open up one of many highly disposable faces of the globalized economy," Alexis Madrigal wrote in the Atlantic after falling victim to a scammy dropshipper himself.
The wholesale prices are extremely cheap, which is why the dropshippers choose to source from marketplaces like Aliexpress, but consequently the quality control is often nonexistent. Shipping times are astronomical, and the dropshipper's markup similarly inflated. All of those factors add up to a disappointing customer experience.
Rusenko finds the whole thing disgusting, and is willing to lose out on some business to take a stand against it. "It's the newest scam, right? It used to be the Nigerian prince that was emailing you, and now it's the burner brand on Instagram. It's working, unfortunately, but that's because it's very deceptive and people haven't gotten smart to it yet."
It's a mission thing. Weebly's, he said, is to serve creative entrepreneurs, and dropshippers are essentially the opposite of that. Rusenko is also worried that too many people will have bad experiences with dropshipped products, and come to regard all "Instagram brands" as subpar and not worth any attention. In that environment, how will legitimate young businesses gain a foothold?
"We think that's awful because it's hurting the real creative entrepreneurs," Rusenko said, "that are investing their blood, sweat, and tears into creating these unique and amazing products that the world's never seen before." At least until the copies pop up on Aliexpress.