Dropshipping firms often break online retail rules

Many “dropshipping” firms are operating outside the law and are impossible to reach if something has gone wrong with a shipment, the Dutch consumer association Consumentenbondsaid on Tuesday.

Dropshipping is a business model whereby intermediary online retailers transfer orders to the supplier or manufacturer which then ships the product directly to the buyer.

Two in three of the 100 dropshippers checked out by the Consumentenbond have no return address, phone number or Dutch chamber of trade registration number, even though this is required by law.

In total, 82 were unclear about the cost of returning a product, which is also against the law, the Consumentenbond said.

“To return a product, customers have to first contact the retailer for the right address, that is often in China,” the agency said. “That makes returning a product expensive. And some won’t accept returns because, for example, the item was on sale. That is against the law.”

Some 2,500 members of the Consumentenbond were also asked about their experiences with dropshippers. Some 88% percent of those who had bought from a reseller said they wished they had not done so. Long delivery times, the high cost of returns and quality were among the main reasons they cited.

The Consumentenbond has passed its findings on to the Dutch competition authority ACM.