eCommerce Lifestyle
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8 Dropshipping Scams to Avoid

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​Unfortunately, there are now more scams popping up than ever before! Protect yourself from the scammers by listening to today’s podcast episode, where I share 8 dropshipping scams to avoid.

What's Covered in This Episode:


​8 Dropshipping Scams:

  • ​Fraudulent Orders
  • ​Phishing Emails
  • ​Sharing Account Access
  • ​People Paying To Use Your Account
  • ​“Agencies” With Guaranteed Results
  • ​Fake Gurus Selling Online Courses & Mentorship
  • ​Buying Opportunities
  • ​Dropship Supplier Directories 
If you liked today’s show, please subscribe on iTunes to The eCommerce Lifestyle Podcast! The podcast is also available on all major podcast players including, Stitcher and Spotify.

Links From This Episode:

This ​podcast is also available in video form. Click ‘Play’ below to start watching. Make sure to subscribe to our YouTube Channel for weekly updates and insights!

Transcript

What's up everybody? Anton Kraly here from ecommercelifestyle.com and welcome back to the podcast. So today's episode is inspired unfortunately by a post that I saw in one of our private Facebook groups for members of my coaching program Dropship Lifestyle. And it was about an email that they got from a company that said they were Shopify that was asking for them to update their account details. Now you might be catching on pretty quickly based on the title of this episode, but what that email was was what's known as a phishing email. And that along with many other things are scams that are popping up right now more than ever when it comes to running a drop shipping store or really just an eCommerce store as a whole. So whether you're drop shipping or just running an eCommerce store, I think this episode is really important for you because in it I'm going to share eight different scams and how you can avoid them.

So the first type of scam to avoid is fraudulent orders. Now these are orders that can come in on your store, either from somebody using a credit card, a debit card, from somebody telling you they want to mail you a check or somebody telling you they want to wire you money. It doesn't really matter how they want to pay, but it is what it sounds like. A fraudulent order is something from somebody that is not who they say they are, from somebody that is trying to scam you. Now this isn't new to e-commerce or really new to business owners in general. The good thing is that if you use a platform like Shopify, it is pretty easy to get notified about when an order is possibly fraudulent or fraudulent. So Shopify has built in risk prevention tools that will tell you if an order is low risk, medium risk or high risk, and you can also use other third party apps like ClearSale and they'll do the same thing. They'll tell you if an order is most likely fraudulent.

Now some people that are new to e-commerce and drop shipping either don't have alerts like that setup or they're just so happy to start getting sales that they kind of ignore the fact that this might not be a real order thinking like, "Well, I just got a sale so let me process it and I'm going to make some money." Now I understand that feeling like, "Oh, I want to have this sale. I want it to be real." But you need to trust these apps and these built in protections because they're there for a reason. Now, yes, sometimes there are false flags as an order that might be fraudulent, but you want to assume going into it if one of those things pops up like, yes, this is probably fraudulent, then it's on you to do the further research and confirm that sale. Because if it is truly fake, what's going to happen is you're going to ship a product, then the money's going to get taken out of your account because the bank or PayPal or whoever they use to process the payment is going to realize it wasn't actually their payment information that they used. So even though it might seem like a short term win, in the longterm, you're going to lose money if you ship fraudulent orders.

Another thing that I should mention while we're on this first point is that if you ever get an email, which as an eCommerce store owner you will, from somebody saying something like, "Hi, I really love your store and I want to buy this item," which is probably the most expensive item on your store, "and right now I want it to go to my daughter who is studying abroad and I'm currently on a business trip as a doctor in Saudi Arabia and I can pay you 5,000 extra dollars for your time if you can ship this product out," and usually goes on something like that. And let me just say also for everybody listening from Saudi Arabia, nothing against you guys over there because I'm sure the people sending these emails aren't even from there, but this is a common thing and it's always fake. 100% of the time you're going to get ripped off if you proceed with these orders. So I don't care how new you are, how good the story sounds, don't do it. Make people pay it through your normal payment system. And if orders get flagged as fraudulent or as high risk, again assume it is high risk until you can prove otherwise. More often than not, it really will be high risk.

So the second scam to avoid is the one that I actually led off this episode with and that is getting a phishing email. That could be from somebody that says they're Shopify or somebody that says they're another software provider that you work with, even somebody that says they're from your bank and they want you to click a link and go in and reverify your account. And what happens when you click those links and you go to those pages that will look like they are from whoever they say they are, is when you enter your account information, it's not resetting anything, it's just sending that account information to the scammer that sent you that email to begin with.

Now, why do people do things like this? Because then they can go into your Shopify account or your bank account or your Klayvio account, whatever it is, and they can basically steal all your information and all your customer's information and they can change where deposits are going to and they can basically take control of your business and scam you. Now if you're thinking like, "Well, that must be a Shopify problem. Why would that ever happen?" Listen, it's not hard for anybody to find out who's using a Shopify store or who's using a Magento store or who's using a WordPress store or a big commerce store. It doesn't matter. There's websites like builtwith.com, you can go there and see everybody using any platform out there, so that's how scammers find out who's using what platform. They simply make email addresses that look like they're official. They build these fake landing pages and they steal people's information. So be on the lookout for that.

If you ever do get an email from again anyone, whether it may look like it's from Shopify or it may look like it's your bank or whatever, don't click those links. Just go directly to shopify.com and log into your store or go to your bank website and log into your bank and see if there's any alerts in there. But don't go through those emails. Unfortunately, it's something that people have made mistakes with in the past. I can't say that I know of anybody that's done that, but I've seen enough people ask about it saying, "Hey, do you think this is legit?" that I have to assume some people haven't asked and just made that mistake. So yeah, double check everything. Go direct to the source if you ever get any of those emails. So let me build on that a little bit and go into the third scam to avoid and that is sharing your access to different platforms and softwares that you use. So it's very common if you're building an eCommerce store that you want to bring in contractors and maybe that can be somebody to go in and design your store for you, or maybe that's somebody to go in and upload products for you or maybe that's someone to go in and optimize your site for SEO or somebody to go in and manage your orders and make sure they're all being processed with your suppliers. Whatever it is, there is going to be a point that you need to share access with other people to your store. Now, this isn't something that you shouldn't do, but there's a very specific way you should do it because what could happen is you could hire somebody off Freelancer or Upwork or wherever and everything might seem good, good, good, good, good. A year later, you don't realize they still have access to your account and now all the deposits from your store aren't going into your bank anymore. They're going into some random bank account you know nothing about because somebody that had full access changed the settings in the Shopify admin.

So when you're sharing access, again to important things like your Shopify store, make sure you're never giving out your administrator username and password. So the one that you use, do not share that with anybody. What you can do in Shopify is actually make what's known as staff accounts. And as you're creating these staff accounts, you can give restricted access. So when you do this, you can block people out from certain things. For example, the financials, from going into your Shopify settings. But if you're giving people access by just saying, "Here's my username and password," then they have as much control over you do. And while more often than not, nothing does go wrong, things definitely can go wrong.

As a matter of fact, last week I actually received an email from a really big company that was actually from their email address, not a phishing email, a real email, and it was saying like, "You have a past due payment of," forgot what it was, like 500 bucks or something, which I knew I never bought anything from them. So I was like, "What is this about?" But it was a real link and it went to a real payment page which, of course, I didn't pay because I didn't owe anything. I didn't buy anything from them. But they send out an email a day later that they got hacked. Somebody had their login and that's what they did. So this stuff really happens. Again, do not share that admin level access because you open yourself up to the possibility of being scammed.

The fourth scam that you should avoid is letting anybody ever get access to your accounts for their business. Now let me explain. You might've even seen posts like this in marketer Facebook groups or maybe even on Craigslist, things like that where people will say, "I need access to a PayPal account. If we use your PayPal account for my eBay drop shipping business, we can split profits 50/50" or "I'll pay you $1,000 a month" or whatever it is. Never, ever, ever, ever do that because the reason people are asking basically to use somebody else's account is for one reason and one reason alone, it's because their account is banned and they're no longer allowed to work on eBay or whatever other platform they want to drop ship on.

And the reason this happens is because they were most likely doing business in a way that was an ethical, that was against the terms of service of whatever company they were working with and now they need someone else's account information to plug in so that they can keep their scheme going. And what's going to happen is you're going to give them your info, you're going to even maybe sign an agreement with them and in a week or two weeks or three weeks, or a month or even six months, it doesn't matter, whatever they originally got flagged for, you're going to get flagged for. So now, not only are you not getting money from the deal, but you, not just your email address, but your name, your social security number, your address, your phone number, everything is going to be banned just like theirs was from whatever platform it was. So no matter what somebody is offering you, no matter how good you think you know them, if they're asking to use your information to sell and to do business, it's because they already messed up. And I'm telling you, they're more than likely going to mess up again. You're going to lose your ability to ever sell in the future on certain platforms. So please avoid that scam. Do not let anybody use your information.

So the fifth scam to avoid is working with agencies that guarantee you results in advance. Now I've worked with different agencies before for pay per click ads, for SEO, for all different types of services that I thought, "You know what? We do good with it, but let's see if somebody could do better." And as a business owner, I'm always attracted, or at least that in the past I had been, to the ones that can say, "Yes, I guarantee you in one month your organic traffic is going to go up 10%" or "I guarantee you that we can get your return on ad spend up by 15%," whatever it is, but people that can provide an actual number. But what I've realized is the people that guarantee it are the people that always fail. And it's because when you're working with agencies, they can give you an estimate, they can give you what they believe is going to happen, but when you hear, "Oh, I guarantee this is going to happen," it almost never does. Okay?

People that make guarantees like, that that say their agencies, and I say that because it's usually just a guy that went through a Ty Lopez course and says, "Oh, I can do this stuff for you." But those companies, those are the ones that will say, "I guarantee you." The ones that are legit are the ones that can actually look at your data, can give you real reports, can give you milestones where they think they're going to be. But if anybody ever tells you, "Oh yeah, yeah, give me $1,500 a month, I'm easily going to double your return on ad spend," just run. Don't pay them anything because that's somebody that you should not trust.

The sixth scam to avoid are these fake gurus that are selling online courses and mentorship and you might be thinking like, "Anton, you've been selling an online course and a coaching program since 2013," and that's true, but I want to point out some specific things that you can look for. If you already own an online store and you're looking to learn more and do better and build a real business, when you are finding people that put content out online and you're thinking, should I invest in this person's mastermind or should I buy their course, or should I pay them for consulting? Please, please, please don't go with the people that are constantly promoting the rented Lamborghini's and the Airbnb's and posting photos of their jewelry. That is a type of marketing that definitely attracts people to their brands, but that is not what's going to help you grow your business. That's not what's going to help you learn how to build a successful store. That's not what's going to help you get approved with suppliers. That's what's going to help them bring in people that want those same things, but it's not what's going to help you build a business.

So if you're looking to learn either just starting from nothing or looking to grow with what you already have, if you're going to invest in anything paid, do yourself a favor and learn from the people that you're already getting actionable tips from and the people you're already actively growing from learning what they're talking about. So the people that share strategy, not the people that have a YouTube intro sharing five Lamborghini's walking into a big beach house. That stuff doesn't matter. Is it cool? Yeah, maybe for them. But what's cool for you is actually getting the information you need to grow rather than fantasizing about what life could be like. It's important to have goals, but it's more important to get strategies and to do the work that will take you to where you want to be.

A seventh scam to avoid is something I've talked about in the past, so we'll keep this one brief, but that is buying websites and online stores that are pitched as opportunities. If you're ever going to buy an online business, the best way to do it is if it already has a track record of profitability, ideally at least 12 months, ideally growing month over month. And if you're going to buy a business like that, I've said this before, it's not going to be cheap. It's going to be a lot of money. You're most likely better off building it yourself from the ground up once you know how to do that, but don't get yourself in trouble by buying a website for two thousand, five thousand, ten thousand that looks great, that supposedly has access to a whole bunch of suppliers, that supposedly has this huge income potential, but that has made $0 million in sales. Do not buy those websites. They are scams and you're going to lose money if you do.

And that brings us in to the eighth scam to avoid, and that is working with supplier directories. Now there are a ton of different supplier directories out there. There are dozens of them. Some of them are more legit than others, so I'm not saying everyone you find is just an absolute scam. But by far the majority of them make their money through the fees that they charge you to be a member, to see these products that supposedly you can make all this profit with. Now the reason I think that this is a scammy business model is because the potential profits that they show you on their homepages before you sign up look super high. They'll show a product and they'll say, "Oh, this chair, your wholesale cost is 50 you can sell it for 200. You can make $150." But then if you actually go on Google and you search for that same chair, you'll see people are selling it for $55.

So when you work with most of the supplier directories, again, they're giving you false hope. They're giving you false promises by showing these potential profit margins before you sign up. And then what you're really getting is just access to a middleman where there's no pricing controls, where I could sell that chair for $54 and you could sell it for 53 and somebody else can sell it for 30 and then somebody else can list it for 200 if they want and never get a sale. So you do not want to work with supplier directories. You always want to work directly with the brands for which you sell for and you always want them at least as often as possible to have MAP policies which stands for a minimum advertised price, which means if they say, "This chair you should sell for $200," it means I can sell it for less than 200, you can't sell it for less than 200 and neither can anybody else.

So hope you guys found this helpful. Again, most of these apply to eCommerce stores as a whole. As always, if you got value from this podcast, please do leave a review over on Apple podcasts or on Spotify. And if you're watching the video version on YouTube, I would definitely appreciate it if you left a message below. Let me know if you've ever been scammed before. Let me know if any of these stood out to you and just share if you've got any big takeaways from this. So thanks again, everybody. I appreciate you and I will talk to you in the next episode of the podcast. See ya.

  • Kenneth says:

    Very good content thanks

  • Ronjia Nellemann says:

    Good information, thanks, I did fall into a trap or to and it`s not fun…embarrassing!
    Love your podcasts

    • Anton Kraly says:

      I’m sorry to hear that, Ronjia! Hopefully, you can get everything resolved quickly.

  • Kenneth Freshley says:

    Thanks for the heads up Anton

  • Mel J. says:

    No BS, Just good info. Thanks

  • Shirley says:

    I fell into the trap and lost $60,000. How stupid can you be, right? Yeah afterward I am so embarrassed that i wish I didn’t have to reveal it. But, it is true and can happen to anyone. These guys know their stuff and make you easily fall for it because they start asking lower amounts and build up to gigantic ones. Everyone has a stake in it; getting your money. If it sound too good, you would already be doing that so watch out who promises what and how involved the money trap starts to get before you fall completely in. Best thing to do…hang up and don’t answer them!!!

    • Anton Kraly says:

      🙁 I hope that you can find a way to recover your money. Would you be willing to share the name of the company that scammed you?

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