Tuesday, January 16, 2024

The Drop Shipper Scam - Is It Really A Scam?

Caveat Emptor, Bob, Caveat Emptor!

I recently fell for sort of a scam, which was not really a scam but just me being lazy.  We have about 50 folding chairs at the Parcheesi club and the rubber feet fall off them when the members decide to play games al fresco.  The chairs sink into the lawn and when they pull them out, the feet remain buried.  Later on, the raw steel legs gouge the floor in the clubhouse.

I found a stash of replacement feet someone had bought and forgot about.  They were in packages of four which sell for more than four dollars apiece which is a buck-a-foot for each chair.  I installed as many as I could, getting the worst offenders fixed first, but I quickly ran out.

So I went online to order more.  I figured eBay might have them in bulk and they did - the Shepherd Hardware 8753E bag of 24 feet for about $17.  I'm saving money over buying them in blister packs of four!

For some reason, each seller has only one in stock, so I order four, one each from a different seller, or four sellers in all.  A few days later, they arrive in Amazon Prime packaging with a "gift receipt" so I can't see how much they cost.  Curious, I go on Amazon and look at the pricing and lo and behold, they are on the site for $11.95 a bag.  When I originally searched on "white rubber feet" that bulk package never showed up - only the overpriced blister-packs of four.  That's when I switched to my eBay tab and found them in bulk there.  When I went back to Amazon and searched on "8753E" well, it was right there, the first hit, $11.95 a bag.

This is not the first time it has happened to me, either!

Some people call this "arbitrage" while others call it reselling or drop-shipping.  It is a pretty simple deal and I think they program a bot to do it (hence each seller had only one bag in stock - too hard to code multiple orders!).  You find something on Amazon that sells for higher elsewhere and then list it on eBay for 50% more (or thereabouts) and if someone clicks "buy now" your bot uses your Amazon Prime account to order the item and have it shipped directly to the buyer as a "gift" item.  You don't even get your hands dirty!

Is it a scam?  Well, I feel foolish for over-paying a total of $20 on $80 worth of feet.  On the other hand, I paid less than the last guy to order these, who bought them in a dozen or so blister-packs of four.  Caveat Emptor - buyer beware.  In a free-market economy, anything goes, and increasingly anything does.

People are already starting to notice that sites like Wayfair have flexible prices.  You click on something and it lists for $99.95.  You decide to think about it and are pleased that the next day, it is $89.99.  Maybe wait longer and the price will go down further!  But that evening, the price is now $111.99!  Better buy before the price goes up further! In some cases, this backfires, at least with me, as I resent being jerked around and decide I really don't need what they are selling.

Nevertheless, these sort of pricing games are on the rise, and a merchant can figure out how badly you want something by looking at your search history and even your e-mails and texts, I presume.  If you want it badly enough, you'll pay more.

Others have noticed a reverse effect - you put something in your "cart" or watchlist and the next day, you get an offer to buy the item for 7% off.  This happened to me recently with the buggy upgrade (more on that in another posting - Lithium-Ion, baby!) as I got "offers" for items that I merely looked at on eBay and clearly eBay communicates that to the sellers.

In that instance, I cross-shopped on Amazon and Amazon's price was 10-20% higher - from the same merchant!

The problem was, I didn't search by manufacturer or by part number.  I typed in something lame like "Rubber feet that go on the bottom of folding chairs" which might work with an AI interface but only flummoxed the search engines of Amazon and eBay (I foolishly didn't search Google).  After I found the bulk package with the part number, I should have gone back to Amazon and searched again - I would have found it.

And the way I found it on eBay was after finding the blister-pack of four, beneath it was "Other items you might like" and after struggling for a half-hour, $17 seemed like a decent price, which in retrospect, I guess it was - I was willing to pay it.

But beware of the drop-shipper!  I suppose it is inevitable you will be snared by one or two in your life, particularly if you are lazy about cross-shopping on price.  In retrospect, they are not hard to spot as the listings are often very short on details or are very vague, which makes me nervous.  You don't want to order what you think is 24 pieces and receive only four, as the listing was vague on quantity or buried the quantity under a wall of text.

On the other hand, should you do this "Arbitrage" thing yourself?  What I noticed was that each seller had the same item at a slightly different price - each nickle-and-diming the other to death.  One fellow wanted $17.99 while another offered $17.63.  Oddly enough there were outliers at $29.99 which I guess some folks would just click on and not care about the cost.

Like any merchant endeavor it is a business of margins, and so long as someone is willing to sell for a dime cheaper, they will, and presumably put you out of business.  In the long run, I am not sure it is a workable "get rich quick!" business model.  But I suppose if you could set up thousands of these listings, you might make a few bucks at it, presuming you could automate the process efficiently.