Ever seen those offers: we're giving away (insert item) as a promotion, all you need to do is pay shipping and handling?
Let's dissect one and see how it really works.
Recently, someone brought this to reddit.com/r/scams attention. In the interest of NOT giving them any link juice, all names will be redacted, but you can easily figure it out. Here's a screenshot of the top of their giveaway page.
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They claim to be giving away all sorts of headsets and headphones for FREE. The catch is you'll need to pay about $13USD per item for shipping and handling.
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However, are these headphones REALLY worth as much as they say? The answer is no. NOT EVEN CLOSE. Let's take that first headphone for example. They said "save $80", implying MSRP is $80.
Well, let's do a bit of digging via Google image search, and we got a $3 headset:
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Oh, myyyyy. It's the EXACT SAME headset. For $2.99 with free shipping. These headphones are NOT worth $80. They're not even worth $8. It's worth $3.00
Now you see why they are charging $13. For every order, they pocket $10, while making people believe they are getting something for cheap.
Let's pick another item, just to make a point.
This is the most expensive item, supposedly, on this website. Save $120, they exclaimed.
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Yet you can tell with the MI logo this had to be a Xiaomi headset, not this generic (censored) brand name. And it's NOT worth $120. Try $2.
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This sort of bogus promotion is a dark side of a legitimate business known as "dropshipping".
Dropshipping is legitimate. Basically, you operate a store with no warehouse and no inventory. If you get an order, you pass it on to a factory or warehouse and they ship it out. You pay the factory, and customer gets the goos. Everybody is happy.
But this is the "dark side" of dropshipping, where you get bogus claims of value and deception of the customers. By claiming a $2 or $3 headphone is worth $80 or $120, then promise to "give them out for just $13 in shipping", the operator of this website is pocketing $10 per order doing virtually no work.
It's deceptive, but it's not breaking any laws per se.
And this happens quite often. One of the promos was hot on Facebook a while back in November and December was a "gold rose" for $10, but you must "order now to be ready for Valentine's Day". But the gold rose is available on Aliexpress for $2 or $3. Every order that puts through means $7-8 profit for the store owner. But at least, that one didn't claim to be "giving it away for free" and claim "it's worth $100".
The cost of setting up a dropshipping store like this is low. You need a domain name, a Shopify (tm) cart, a dropshipping plug-in to Shopify that automates the transfer of orders in YOUR cart to Aliexpress orders, and a tracking plug-in so any package tracking info is sent back through your website. The initial setup cost is maybe a few hundred dollars. Then the same thing can be recycled, just need a fresh coat of HTML for different things to pimp next time. I have no idea how much a guy can make from one website, but I'd expect it to clear at least several thousand dollars even after expenses.
There are even courses you can take online that teaches you how to do this. The legitimate way, mind you, not this underhanded (not)giveaway way.
So, what's the lesson to take away?
Be skeptical of any "bargains" you come across. There's probably a catch somewhere.
Let's dissect one and see how it really works.
Recently, someone brought this to reddit.com/r/scams attention. In the interest of NOT giving them any link juice, all names will be redacted, but you can easily figure it out. Here's a screenshot of the top of their giveaway page.
They claim to be giving away all sorts of headsets and headphones for FREE. The catch is you'll need to pay about $13USD per item for shipping and handling.
However, are these headphones REALLY worth as much as they say? The answer is no. NOT EVEN CLOSE. Let's take that first headphone for example. They said "save $80", implying MSRP is $80.
Well, let's do a bit of digging via Google image search, and we got a $3 headset:
Oh, myyyyy. It's the EXACT SAME headset. For $2.99 with free shipping. These headphones are NOT worth $80. They're not even worth $8. It's worth $3.00
Now you see why they are charging $13. For every order, they pocket $10, while making people believe they are getting something for cheap.
Let's pick another item, just to make a point.
This is the most expensive item, supposedly, on this website. Save $120, they exclaimed.
Yet you can tell with the MI logo this had to be a Xiaomi headset, not this generic (censored) brand name. And it's NOT worth $120. Try $2.
This sort of bogus promotion is a dark side of a legitimate business known as "dropshipping".
Dropshipping is legitimate. Basically, you operate a store with no warehouse and no inventory. If you get an order, you pass it on to a factory or warehouse and they ship it out. You pay the factory, and customer gets the goos. Everybody is happy.
But this is the "dark side" of dropshipping, where you get bogus claims of value and deception of the customers. By claiming a $2 or $3 headphone is worth $80 or $120, then promise to "give them out for just $13 in shipping", the operator of this website is pocketing $10 per order doing virtually no work.
It's deceptive, but it's not breaking any laws per se.
And this happens quite often. One of the promos was hot on Facebook a while back in November and December was a "gold rose" for $10, but you must "order now to be ready for Valentine's Day". But the gold rose is available on Aliexpress for $2 or $3. Every order that puts through means $7-8 profit for the store owner. But at least, that one didn't claim to be "giving it away for free" and claim "it's worth $100".
The cost of setting up a dropshipping store like this is low. You need a domain name, a Shopify (tm) cart, a dropshipping plug-in to Shopify that automates the transfer of orders in YOUR cart to Aliexpress orders, and a tracking plug-in so any package tracking info is sent back through your website. The initial setup cost is maybe a few hundred dollars. Then the same thing can be recycled, just need a fresh coat of HTML for different things to pimp next time. I have no idea how much a guy can make from one website, but I'd expect it to clear at least several thousand dollars even after expenses.
There are even courses you can take online that teaches you how to do this. The legitimate way, mind you, not this underhanded (not)giveaway way.
So, what's the lesson to take away?
Be skeptical of any "bargains" you come across. There's probably a catch somewhere.