The Ethical Entrepreneur

The ethical entrepreneur - Can you use dropshipping and still be an ethical business? 

We probably all know someone who has started up a business recently or entered in a side hustle they’re really excited to share. It is clear more people are starting their own businesses since the pandemic, maybe being more anxious about money, losing  jobs or just realising there are other ways to make money in an increasingly online world. YouTube is flooded with videos on “How to Succeed in Starting a Business” or “Make Six Figures Off Your Side Hustle” and dropshipping has been getting a lot of attention, quickly becoming one of the most-used e-commerce models for startup entrepreneurs. As it rises in popularity, more information is coming to the surface about the flaws of this kind of business model.

What is dropshipping?

First, let's get into what dropshipping is and why it is so popular. If you don’t already know, it's where a seller markets and sells items without manufacturing them or holding any goods in stock, essentially working as a middleman in a retail business. This works great for a startup business model as there are low start up costs and you don't have to save up to afford the manufacturing of the original item.

What are the benefits?

If you work another job or have committed responsibilities, using dropshipping on the side is manageable since it doesn’t demand significant hours from labour. Once items have been sourced and a store has been set up the potential earnings can be significant. 

What are the downsides?

Websites that utilise dropshipping can experience delays in deliveries, breaches in website security and low standards in product quality testing which can lead to low customer satisfaction and trust of the website. Popular suppliers such as Ali Express and Alibaba are infamous for their delayed shipment which could lead to cancellations and returns.

Is it ethical?

When we say ethical we want to look at what the standards are behind sales and manufacturing, the sustainability and its ecological effects. 

Stolen art 

Sadly it is fairly common for small businesses to be ripped off by larger brands, and it's made easier than ever with dropshipping. Often as a seller you won't know whose designs have been ripped off and being resold at a cheaper rate. Online marketplace Etsy, is well saturated with artists and creators selling their own works who have had their products stolen and reproduced cheaply then resold at a much lower cost through stores that use dropshipping. It's most likely people are making more money off of other peoples’ dedicated work than the creators themselves.

Labour and transparency 

Popular fast fashion brands who produce a lot of their stock in third world countries can often be associated with forced and unethical labour from low wages to unacceptable working conditions. As AliExpress items are often priced at unbelievably low prices it's worth questioning how this is possible. As there is little to no supply chain transparency you don’t know who is manufacturing these items or even really who is selling them.

It also wouldn’t be a stretch to imagine a lot of popular fast fashion brands dropship from Aliexpress rather than having items manufactured and sold through their own supply chains. Instagram account @exposing_dropshippers shows how many current brands are using Aliexpress products and marking up the price. This does however, present a benefit as the brands themselves are not manufacturing items they don’t make a surplus of clothing that end up thrown out if not sold. 

Possible alternatives

As Anne Hathaway once said “A girl’s gotta eat”. Obviously go get your money honey, we love that entrepreneurship is taking over and if dropshipping is your vibe we want you to know there are more ethical and sustainable ways of starting a dropshipping business we’ve found for you to consider: 

Dropship sustainable items 

Most suppliers will have a section for eco-friendly and more sustainable items, even Aliexpress has a sustainability section, now it is up to you how much you trust your suppliers but you can always find something 

Source from local suppliers 

Dropshipping from suppliers in your region or country would reduce your business’ carbon footprint and you might find some hidden gems that would be more valuable to your community. 

If you're a go-getter with the drive to start an ecommerce business and have been looking into dropshipping, don’t be dissuaded, but be mindful of creating a business that aligns with your beliefs  

We believe in you, go get your dreams.