Many "successful" dropshippers simply sell success. That is, they make claims about how much money they're making, and sell courses or coaching to unwitting marks. And if their marks' stores don't pan out, they an always offer the "advanced" course, the "super secret" formulas, just give me another $3000 please.
There might be a few bros out there doing well at this, that is, actually selling things to consumers, but mostly it's selling inessential products to indifferent consumers at tight margins. There's nothing wrong with dropshipping as a business model, per se, but there's a lot of hype and shadiness going on in these circles.
My second job out of college, back in 2011, was as the only employee for a drop-shipper who sold fabric for upholstery, lighting, and all kinds of home furnishings. Her website was an off the shelf .NET ecommerce app she probably paid a few thousand for. I was the customer service rep and web dev for the company. She did surprisingly well, grossing $120-160k a month. Her margin was around 20% I believe. I made a pretty small salary but it was a great way to kickstart my dev career.
Her biggest success was upholstery fabric. Forgot to mention she did a decent amount of wallpaper, probably 15% of her business. Furniture was a very very small portion. I don't think there was much overlap other then both businesses being designy but her store was a furniture showroom. Her sales were nationwide. I think she took a lot of business from interior designers who would sell at a high markup to customers.
As a frequent importer I think the most important thing she built was a relationship with her supply chain in China which was likely unique and an understanding of prices and quality in the industry. Her intimate product knowledge is the biggest difference between her and a normal dropshipper.
It was early days and I think she just had about 200k different fabrics and wallpapers and ruled SEO or at least got a decent chunk. She probably did well because of the bulk import of products. I am not sure but I think all of the warehouses were in the US. We didn't talk to anyone in China. We placed orders through distributors that sold to retail stores. The brands I remember were Duralee, F.S. Schumacher, Ralph Lauren, and others I forget. Customers knew what they wanted, usually from an interior designers recommendation. We could just send them a swatch of a specific run of fabric or wallpaper. It was always messy though because it was almost impossible to guarantee the swatch would match the actual product delivered. Every run of a product is slightly different. It's why people buy extra carpet or wallpaper for high traffic corridors to be replaced early.
The article hits on this a lot, and if you look up the main subject (Mike Vestil) on Google, some of the first hits you'll see are videos from him like "TURNING $2 INTO $500000!" Ironically, even Mike himself in the article says that he hates that part of the dropship culture.
But if you really want to see how prevalent it is, take a look at r/dropshipping. There's tons of posts trying to sell courses, or Shopify themes, or a new commerce platform, etc. There's an entire "get rich quick" industry that's aimed at targeting other "get rich quick" dropshippers.
Oh my. I checked out that Reddit group. There are people making posts trying to sell something, and in the comments people trying to sell the original poster something different. It's turtles all the way down.
That should be easy. You’ll find plenty of “master classes” on online marketing from the same snake-oilers. They might actually fit the bill here, because the only thing they teach you, if anything, is how to push useless, digital content to suckers.
source: I know someone with a proper addiction to this stuff. Think 6-digits “invested” in “life-changing material”...
Unfortunately this kind of thinking is also why I’ve never created a YouTube channel or blog to teach people software dev stuff from my years of experience.
I keep thinking I’ll come across as a failed developer who now has to teach for ad money because he can’t do anything else anymore.
1. If you try to make money on youtube with ads... good luck with that. Thats not the business model of most devs who teach on youtube.
2. Before your youtube channel becomes popular to get noticed in a good or bad way, it will probably take a long time. Teaching code, being good at coding and being popular on youtube are 3 skills that dont necessarily overlap.
3. If you do get noticed, the (financial) benefits of it far surpass any developer job. And usually it actually help you to get dev jobs anyway.
Why? Youtube is a vast wasteland of videos, if people think that then your videos simply won't get many views, if people do find you insightful you will.
Unless you're specifically worried about the lack of low views maybe upload some random videos of you wandering around maybe even talking about random things first (because there's a trillion videos on youtube of people doing this already) so you get used to it.
Coding is not sales or trading and I didn't intend for this aphorism to apply to programming.
If you know a stock is going to appreciate in value and you tell everyone about it, they are going to buy it and cause the stock price to rise. If you didn't buy any and they did you will miss out on the appreciation. Alternatively, if you buy enough of the stock and don't tell anyone that will also cause the price to rise in value and other people will miss out on the appreciation.
Teaching someone else how to be a better programmer does not diminish your market value as an engineer in any meaningful way. It most likely increases it. Disclosing your winning trading strategy will make it so you can't profit off it because your trading costs will rise to such a level that the trade is unprofitable.
There is also a tendency with these kind of businesses to happily disclose sales, but not much beyond that. Sure, making $200k a month is great for selling courses but they don’t tell you they had to spend $199k in facebook ads to get there.
Most of these businesses would be doing great if they could make $200k for 199k in advertising, most are earning $200 after spending every last penny they had on advertising.
Have a friend doing dropshipping of real products. He mostly goes into amazon. Had a marketing background.
Key things if doing the real version of this.
1) In person supplier visits to vet them (yes, you need to fly to china
2) Amazon reviews are everything to these guys. So ad copy that is not too overblown (disappointment), amazing customer service etc. FBA.
3) Stick your own brand on the product and try to build that in a niche.
Lot's of seedy stuff also, but it does make really good money when its working for sure. These guys live in total fear of their accounts being banned / blacklisted (usually by competitors filing fake reports on them).
Each is typically expressed as a percentage, and we're talking about the gross margin here, not the net (net margin takes into account other business expenses).
If your gross margin is 100%, it means you got the product for free:
But what if your SalePrice is also 0? I asked our Lenovo Smart Display about this: "Hey Google, what's zero divided by zero."
She replied "No one knows. It's possible that zero divided by zero is some unknown number mathematicians have yet to discover. Maybe they'll name it after you!"
Yeah, I mean, if you have it solved, then that's great. I just tend to see a lot of comments in some communities I'm in to the tune of "I spent $2000 setting up my store, lots of traffic, no sales, please help". It's often touted as a get-rich-quick scheme when in fact it takes a lot of hard work and an understanding of how to sell.
Cringely is amazing. He runs his whole persona under a name that directly confessed how bad his thinking his, yet has somehow made a long career as a pundit.
Actually sometimes a dropshipper will be willing to say what sold really well last year (if they're seeing poor sales on that item during the current year).
It's not hard to figure that out, make bunch of fake Facebook accounts in different age groups and disable ad blocker, you'll get bombarded from ads on store.
Then go to that advertisers profile and checkout their all running ads on their page, you can easily Google how.
My sister does this and she was a hairdresser so she mostly operates in the beauty product sector but also has had a lot of luck with things from IKEA this year.
The actual products almost never matter because they change all the time. Some only have a sales period of a few weeks. What dropshippers do is to automate data gathering and number crunching to figure out the next products to focus on.
Yes that's why you need to keep spying on competitors using fake fb accounts and establish a protocol of quickly testing and dropping the duds without investing feelings into it and scaling only the winner.
That's what I'm curious about. With that margin I'd guess CPG with a re-branded product. Most retailers are lucky to see anything north of 50% gross margin. I would have imagined a drop shipper having closer to 20%.
Actually many times I sell products which are available elsewhere for 1/2 the price like on Amazon or wallmart but it doesn't stop people from US buying those products. Not everyone has time or smartness to acquire perfect price info of the market.
Dropshipping is all about arbitrage, in one form or another. If you can do just a little bit better than a manufacturer at customer acquisition, you can make money.
This is what retail and trading is about. Making contacts with suppliers, making contact with distributors, researching the market, trying to get credit, etc.
I think people get very angry about dropshipping because there is this self-help industry around it...but what that really reflects is that platforms for acquiring customers have totally changed: costs are nothing, you don't need huge scale to contact customers, etc.
But it is a legitimate business model, people have been dropshipping for decades (shock: most Asian manufacturers have little to no interest in working out how to market to Western consumers), and you can make billions doing this if you want - Wayfair is a dropshipper, Wish is a dropshipper, you can do this if you want.
Dropshipping is a great way to test an item before private labelling. Then you can focus on building that brand and not worry about being priced out by your supplier. Even DoorDash is a dropshipper since they list all restaurants on their app, order from the restaurant when an order comes, and then handle the "fulfillment" aspect.
I'm working on an e-commerce automation platform called Openship and one of our first users wasn't even into dropshipping. She sold her own brand coffee but wanted to sell coffee accessories like french presses, grinders, etc. Her buyers would get these add-ons with the coffee. She would ship the coffee and dropship the other items. Those add-ons would cover her ad costs and she eventually private labelled those items too. That is how you effectively use dropshipping to test and build out your catalog.
Even DoorDash is a dropshipper since they list all restaurants on their app, order from the restaurant when an order comes, and then handle the "fulfillment" aspect.
Aren’t restaurants calling DoorDash and GrubHub out over exactly this “ghost kitchen” practice though?
Ghost kitchen means
a real kitchen with a fake brand-only "restaurant". It's more akin to "white labeling".
Of course one could argue the Chili's and Applebee's are just "white label" brands for Sysco food.
Parent was referring to DoorDash pretending to be affiliated with the real restaurant you but from. That's not really dropshipping.
Dropshipping would be setting up a ghost kitchen storefront but not even having a kitchen, just redirecting orders to Chile's or whatever.
> nothing wrong with dropshipping as a business model
Actually, that's the part I'm struggling to understand. Why isn't drop shipping automated? And what's stopping consumers from bypassing drop shippers altogether?
> And what's stopping consumers from bypassing drop shippers altogether?
Situational awareness and a narrative of trust. The number of advertisements on facebook these days promoting some retail site where every single product can be found on aliexpress for less money _and_ free shipping is staggering. The only reason you would buy from them is 1) You don't know what's on aliexpress because you don't know about aliexpress, 2) You don't know what's on aliexpress because you don't trust rando chinese factory sellers without western-friendly spin.
I suppose, depending where you live, local laws may provide more assurances if something goes wrong with the order. Here in Australia at least you are not obligated to deal with anyone other than whoever took your money.
Though in my experience most AliExpress sellers are friendly and willing to refund or work through issues anyway. I've had fewer bad surprises on there than Amazon.
Not a big aliexpress shopper but last time I checked everything is being sold in volume. You don't buy one thing you have to buy many. I am wrong? If that is the case buying one radio instead of 25 makes more sense.
Alibaba is about volume. AliExpress does single quantities too. Except for really cheap things and then you can several items together but nothing you'd really call bulk.
Dropshippers (assuming the product they are shipping is decent quality) are providing a service to the manufacturer - customer acquisition. Sure, it's possible for a consumer to find the vendor on Ali Express or somewhere like that, but most don't want to. They just want to Google $THING and buy it from a website that they've heard of or looks like it specializes in $THING.
No customer buys a product from a drop shipper after a googling session. It's all sales by aggressive advertising on FB and Insta, peppered with false promises aiming at selling you a $3 plastic gizmo for $25.
> They just want to Google $THING and buy it from a website that they've heard of....
People google stuff (or search on Amazon), land on Amazon or some other online retailer, and buy it.
You might be surprised how much stuff is drop shipped via Amazon sales, and that can be direct shipment or to an Amazon warehouse then FBA.
And yes, paying $25 for a $3 rack rate good is close to standard. If you walk through a Target or Walmart, you will see tons of stuff that can be purchased on Alibaba for about that ratio.
You might think they are the same product, but Amazon is currently being overrun by counterfeit goods. It's no better than ebay or craigslist, at this point.
Also delivery timescales vary a lot. The worst are the ones claiming to ship from local warehouses and four weeks later you get an envelope from China. Basically they just con you on the wait period. But hey you can always go to a local shop and pay £20 for 16GB microSD card or USB cable.
90% of the job of a dropshipper is to market the product, make ads campaigns, SEO, and optimize their website(s) for conversion. There's almost nothing on dropshipping website you couldn't find on AliExpress, the value added is the sale itself.
It can't be automated because they are different manufacturers. There is already Aliexpress for that. What manufacturers need to do is setup a marketing operation in the US/EU to sell their product. They figured that it's more profitable to let these guys run these operations.
This is not actually mainstream dropshipping. Not all dropshipping is from China or international in general because of the unpredictability and latency. It makes more sense to dropship from stable and predictable suppliers for products that you don't have to spend a lot to create demand for. This article could have been written in 2005 and I think a lot of the reason why many of the people mentioned are expats selling to international markets is because ad rates in the US are generally too high to support this kind of business model in the US currently in 2020.
In the US the dropshippers I work with and am very familiar with use mainstream sources with predictable shipping times as do I when I dropship a selection of items very occasionally. The course sellers would generally not be selling courses if they could be scaling their business instead. Dropshipping is not generally a high margin business whereas course selling is. A scaled dropshipping business can make a lot of money but it is not a laid back type of operation really -- it's labor intensive and generally requires some in house automation to make sure that your offers for products match the offers you have from your suppliers.
GRQ dropshipping seems exciting and sexy because you never have to take possession of the inventory and you don't need to put a lot of cash up front if you get paid fast enough. Normal dropshipping is as boring as a wrench or a hammer. Also this article sort of conflates private label dropshipping with dropshipping more generally. They are really quite different things. The typical private labeler takes possession of products here in the US and probably does not dropship the bulk of their stuff just because customer expectations are pretty high for delivery speed and predictability. If you are sourcing from AliExpress or what have you, it's just a lot easier to suck up the unpredictability as the seller and then to sell it to the final buyer with more predictable fulfillment without dropshipping.
I have had two relatives get roped into this world - one ended with them forgetting they had to pay sales tax and owing massive amounts of money, to the tune of millions in back taxes, the other fizzled out pretty quickly.
The craziest part of it was they totally bought into the "super secret" nature of the whole thing. There was a huge amount of family drama when someone in the family mentioned that her brother had a business on Amazon. He said it was top secret and he had access to trade secrets that no one else had.
Having unfortunately been involved on the tech side of MLM early on in my career, it was painfully hard not to point out the predatory nature of the whole thing.
If he’s owing millions in taxes this means his operation was at a scale where you don’t just “forget” to pay taxes. I suspect he tried to evade taxes, screwed up but doesn’t want to admit it.
Income taxes, sure, but for a while nobody had to pay sales tax on out-of-state internet sales. I could see someone not realizing that had changed.
Theoretically they should have gotten good help from a CPA by then, but if it's a largely automated business and it suddenly skyrockets, it might be easy to just enjoy the money rolling in without taking it seriously enough.
My understanding is that it used to be the buyers' responsibility to pay taxes (so almost no one did), and then laws were passed to make it the responsibility of the seller to collect the taxes.
Within 15 minutes of hearing the concept it yelled "scam" to me. Super low margins with high scale? Great. Sounds like a bunch of warehouses wanting you to act as a salesman for all the work and none of the money.
I remember reading about dropshipping in the 4hww, and eventually coming to the conclusion that it just sounded too good to be true, and usually if it sounds too good to be true then you should avoid it.
Dropshipping might have worked as a decent side-hustle when the 4HWW was originally published many years ago. I think the space became flooded to the point where I concluded that it was impossible for an ordinary person to make decent money. It's probably also become much, much more predatory since then. It's more lucrative to sell dropshipping advice than it is to do actual dropshipping.
The 4HWW came out 13 years ago. Probably could have made decent money as an individual dropshipper if you got into it early before all the hype started in ~2014
I know a few people that claim 100K a month. That's all they claim, they don't say what that 100K a month is. I found out later it was 100k a month in what they managed in the store of a customer. They were the ecommerce middlemen that set up stores for successful brands that wanted to branch into eCommerce. They likely still did make more money then the non-consulting DIY dropshipping middlemen that provide no value.
They will inflate the number by just citing their revenue similar to pyramid schemers. You can write a bot that will generate lots of revenue, and any idiot can generate lots of revenue with dropshipping. The trouble is risk and the cost involved in turning a profit from such a business.
I am confident that any 10 year old could sell $100k+ per month online with about a week of training if that was the only requirement and they were allowed to spend $120k. Actually earning significant profits is the difficulty here, and that only gets easier with the standard toolkit of running a successful online retail business: understanding the products, knowing the market, and understanding all the legal hurdles.
I think the biggest issue here is barrier to entry. The barrier to entry is so low in eCommerce. The required skills are not that difficult to obtain, you don't need years of schooling, you don't need to know how to code, you don't need much of anything. For most people the level of competition is obscene because of how easy it is to get into. It's extremely difficult to reach the top tier because of the unreal amount of competition and very little competitive advantage available to leverage. I look at it the same as I do with YouTube and Social Media Influencers. Incredibly easy to start, incredibly difficult to "Make it".
> I am confident that any 10 year old could sell $100k+ per month online with about a week of training if that was the only requirement and they were allowed to spend $120k.
This 10 year old sounds like they're ready for the next YC batch lol.
with drop shipping literally every penny counts. You are competing against prices that are identical to yours, so shaving a few cents off your prices actually matters. He forgot that taxes are needed and shaved those cents off only to be hit in the face.
Sales tax, not profit (% of value, not margin). Their real margins could have been negative - it's easy to undercut competition if you're selling at a loss.
They could have 'earned' hundreds of thousands, only to owe millions.
I spent a while in Thailand and the dropship-bro "digital nomad" culture is just everywhere. During burning season the Chiang Mai dudes would come down to the islands and the rest of us expat/nomad types would bail to avoid them. Lots of Tim Ferris cultists and so forth, though there were also a lot of sincere people just trying to get out of the rat race. All chasing the four hour workweek thing. It's a weird subculture.
I know this sounds dramatic but these types have practically ruined staying in hostels for me. I used to love hostels because of the types of people you would meet, all of them vastly different in most ways but all united by a common desire to travel and see the sights of the place you're visiting. If someone were to talk about work, it would be to say that they are taking an extended vacation from it or working as a part-time bartender or travel guide, but they certainly wouldn't brag about it.
But the last couple of times I've gone backpacking in Southeast Asia, you can't go to any hostel common area without at least a handful of nomad-bros on their MacBook and a Chang bragging to anyone nearby about "yea I'm a digital nomad, I'm making so much money even while just chilling at this bar". A lot of them have somehow turned the travel aspect of the culture into "just part of the job", as if the only reason they are traveling is because "working and traveling is cool", rather than simply "travel is cool".
Are you sure you're not just rebelling against the new? Like in the past most people had to separate work from travel but now there's this new thing "digital nomad" that lets lots of people work from anywhere and they're enjoying this new freedom that used to be available to a lot less people?
My point that I'm having a hard time expressing is that these dropshippers do not seem to be "enjoying this new freedom" in the way you imply. As in, they aren't people who wished to travel, were previously unable to do so because of work commitments, and now are able to enjoy travel because of extra work freedoms.
The majority of "nomads" I've encountered seem like they are mostly uninterested in travel, but they do it anyway because that's "what you're supposed to do" if you're a nomad. This leads to a bizarre culture where talking about the places they've been becomes more of a "digital nomad resume" than it does a recounting of enjoyable travel experiences. Instead of "I went to the Batu Caves and it was gorgeous, they have such interesting architecture there!", it becomes "yea I've been to the Batu Caves, there's a really nice cafe with good wifi just outside that I used to work from".
Have you ever had a conversation with a professional consultant and they have this weird habit of bragging about waking up at 4am to catch flights to NYC, and the only thing they ever tell you about NYC is how nice the Midtown Marriott's beds are? It's kind of like that.
I don’t think ppl are traveling as digital nomads because “that’s what you’re supposed to do”. You’re missing the point of what they’re doing.
Digital Nomads are in those places because it affords them a great lifestyle at minimal cost.
Perhaps you’re also confusing travel with sight seeing. For me personally I love to travel but have little care for temples, churches, most waterfalls (unless it’s something truly spectacular) and other architectures which there are millions of around the world, or honestly are just a bit underwhelming. For me, travel is about being in amongst different cultures and experiencing what it’s like to live in a different place, and having unique experiences that you don’t get elsewhere.
Yes, maybe some people are only taking advantage of the lifestyle and have little care for their environment, but like any group of people there’s a spectrum.
"Have you ever had a conversation with a professional consultant and they have this weird habit of bragging about waking up at 4am to catch flights to NYC, and the only thing they ever tell you about NYC is how nice the Midtown Marriott's beds are? It's kind of like that." - you managed to very eloquently get your point across in the end. Totally got the great professional consultant analogy.
That's one reason I avoid Indonesia. Everyone there is just toxic in terms of tourists.
Japan and Philippines are much more rewarding and much less "digital nomads." It used to be fun, but if you're part of any of the online groups on facebook it's a toxic sub culture.
Totally. I see it as just an extension of the 80's Yuppie. Instead of Patrick Bateman's friends bragging about the restaurants they go to (without even really caring about the food), their stereo equipment (while having absolutely zero taste or authentic interest in music), whatever, now it's bragging about where they travelled to and whatnot.
It's inane peacocking. Virtue signaling without any virtue. Etc. Yuppies never die.
Nothing about this is particular to digital nomads. It's the whole "eew conspicuous consumption is so tacky, experiences over things" movement. Today's Rolex is a gap year.
I have a short story about a guy like this. In the story, he's an independently wealthy Instagram rooftopper type. He gives the impression that he lives off money from streetwear/etc comp deals, but actually makes hardly anything from that, and he has been kicked out of Hong Kong for climbing on buildings. I should dig it out and finish it properly.
I'm not the person you're replying to but my personal issue with a lot of "digital nomadism" in Asia specifically is that it depends on lax enforcement of visa laws. A lot of people working remotely in Asian countries are on three month tourist visas that explicitly prohibit work. Doing endless visa runs and not paying any tax to the host country, in fact not providing any value beyond what you consume, even while taking advantage of tax funded public infrastructure, seems wrong to me. In most of East Asia at least, visas for foreigners are tight in the sense that visas allowing you to live in the country and do whatever work you choose are hard to come by. Most visas for foreigners allow a specific type of work only and prohibit others. I busted my ass to get a three-year visa in Korea that would allow me to be self employed so these people's blind certainty that they are in the right/reliance on western privilege* to avoid being caught bugs me a bit. When challenged they fall back on letter of the law vs spirit of the law prevarication: "so what if I came here on holiday and happened to do some urgent remote work for my company back home, would that be illegal?" Well, you aren't in that situation; you have an apartment and a cellphone number and you're on your third tourist visa in a row.
*by which I mean, less intense scrutiny at the border, which seems to be a privilege of westerners (I am one) in these countries vs. say, south east asians.
> in fact not providing any value beyond what you consume, even while taking advantage of tax funded public infrastructure, seems wrong to me
I would expect the economic benefit to the country to be significantly positive:
1. Every dollar spent is foreign income
2. Limited future costs to governmen: no retirement (huge cost), no unemployment benefits, no health (tourists should be insured - foreign income if actually need to use health services), no education.
3. Taxation still occurs (sales tax, wages of anyone working in a business the tourist uses).
edit: 4. If the working tourist wasn’t in the country, the country would see zero of that income... It is marginal income.
edit: In New Zealand for example: 1/2 of NZ government spending is on social welfare and education; another 1/4 is on finance; and Sales tax is 12.5%. We should encourage foreigners to work here as there’s no way their spending wouldn’t help the country, especially if they are earning a lot and spending a lot. Working visas allow people to take jobs from locals, which not what “digital nomads” are doing.
I wouldn't expect the benefit to be significantly positive. (I live in a SE Asian country and come across these people all the time.)
The vast majority of them are spending $20,000 or less. VAT is Thailand is 7% so that's $1,400 in tax. And that's probably overstating things because much of their spending will be on things that go untaxed for one reason or another.
There's only a few thousand of these people in any given country, by most estimates I've seen. Which matches my personal experience. In any given country they will only be in 2-3 cities and if you spend time in those cities you'll be surprised how small the expat circles are even in a city of 10 million.
$1,200 in tax from 4,000 digital nomads is...$5,000,000. Thailand's economy generates $500,000,000,000 a year. The illegal expat contribution is a tiny, minuscule drop in the bucket.
Unsurprisingly, countries (just like neighborhoods that crack down on AirBNB) might want to optimize for people who want to stay long term, adopt their values, become part of the social fabric...not just maximize marginal income from people who will never even try to learn the language and don't have a single local friend.
What's more, the arguments all have a whiff of colonialism to them. If having foreigners working in your country and not paying income tax is so amazing....why don't you get your own country to do it first?
At the end of the day, the countries get to set their own laws. You don't get to ignore their laws because "well I'm an entitled middle class white man (there are effectively zero digital nomads who aren't white men, in my experience) and I'm bringing a lot of money into their economy don't you know!"
"Digital nomad" is just a "white person who is an illegal immigrant".
Geez, you're really off base on a lot of these comments. But to start somewhere:
> $1,200 in tax from 4,000 digital nomads is...$5,000,000. Thailand's economy generates $500,000,000,000 a year.
How are you only measuring direct tax income? They're spending foreign earned income on Airbnbs, hostels, bars, restaurants, likely multiples more than the average local, to the point that many successful businesses in Southeast Asia would cease to exist without a steady stream of these people.
> want to optimize for people who want to stay long term, adopt their values, become part of the social fabric
These countries don't want these people as permanent residents. As other posters pointed out, part of the unspoken contract is that they're leaving at some point. They come, they spend, and they leave before they get old and sick. If they were really taking more in services than they spent into GDP, the visa situations would change very quickly.
> What's more, the arguments all have a whiff of colonialism to them.
Please go travel to an immigration office in a third world country and see if you feel like you're exercising your white privilege. Officials in these countries tolerate travelers to the point that they're making out economically, but know they are in control. There's no subservience.
> there are effectively zero digital nomads who aren't white men
Sounds like you need to get involved in different social circles. I've seen the split to be about 50/50 gender-wise.
> Please go travel to an immigration office in a third world country and see if you feel like you're exercising your white privilege. Officials in these countries tolerate travelers to the point that they're making out economically, but know they are in control. There's no subservience.
I disagree strongly with this one statement. White privilege is definitely a thing. I have been a white tourist in many countries, and “travelling while white” simplifies plenty of things dramatically, and you can get away with things that a normal local cannot. However, I would guess 95% of that is due to the assumption made by locals that white === tourist === wealthy. The simple ability to fly into some countries immediately shows you are relatively very wealthy compared to the locals. I have also got away with plenty of shit as a English speaking tourist in “white” countries (euro and US), so colour isn’t the only thing. I do try to be generally respectful when I am a guest in other countries. Also I’m not American, which helps a lot as they seem to have a bad reputation most places.... Tourist often gets you the same privileges: I’ve seen white and non-white tourists in NZ get away with batshit crazy shit!
>Unsurprisingly, countries (just like neighborhoods that crack down on AirBNB) might want to optimize for people who want to stay long term, adopt their values, become part of the social fabric...not just maximize marginal income from people who will never even try to learn the language and don't have a single local friend.
agreed... and there certainly are visa paths for people willing to participate in this sort of optimisation, the Korean visa I hold being a good example.
>What's more, the arguments all have a whiff of colonialism to them.
As do the blithe statements about "<country> is so CHEAP." That's always a bit cringe.
>I wouldn't expect the benefit to be significantly positive.
I was in Canggu in feb and it was full of digital nomad types and pretty prosperous. I just looked it up the other day and the nomads/tourists are gone due to covid and the locals are broke and often have no food. I sent some money to a soup kitchen operation to help feed a few who used to have decent jobs. They were definately better off before.
I would summarise your points as “I don’t like tourists, so I will make arguments against digital nomads” (which you summarise with your last sentence which is flamebait IMHO).
> $1,200 in tax from 4,000 digital nomads is...$5,000,000.
The export income from nomads spending money earned elsewhere is the total amount they spend less the imports they cost: it is certainly not just the VAT. USD10000 x 4000 is 40 million of export income - that is actually a significant number that politicians would chase after (well, they would here in NZ).
> Thailand's economy generates $500,000,000,000 a year.
Thailand’s export income is ~215 billion (2017), not 500.
> The expat contribution is a tiny, minuscule drop in the bucket.
Irrelevant: you could say about every small export business, so why not close them all?
Economically, look at the marginal benefit of adding one digital nomad, and decide whether the benefits (export income, but also positive externalities) outweigh the costs (negative externalities like social costs of having “bad” foreigners, or “colonialism” etcetera).
The marginal export income from a digital nomad is say USD10000 per annum. That is economically great, so long as the social costs are not too high.
Note that I’m from NZ and I definitely think it would be economically worthwhile to have high income digital nomads come here even if they pay zero income tax (see my cousin comment for that analysis).
Fundamentally: Thailand accepts foreign cockwomble tourists, so I can see little reason not to accept cockwomble “digital nomads” as well.
Edit: I actually empathise with your sentiments: New Zealand gets a lot of tourists (1 in 7 jobs are directly in the tourist industry), and for a long time we allowed foreigners to buy property, so I have seen some of the social damage they do. Albeit the damage from tourists is much less than Thailand from what I have personally seen. Although NZ is more of a “white” country, we still have mixed feeling towards wealthy US people e.g. Theil bought himself a passport here. NZ is more egalitarian than the US, but still has more wealth inequality than the scandy countries (on average most Maori are hit particularly hard).
Edit 2: It’s only really a legal difference between (a) a person that works at home then travels to spend money as a tourist, and (b) a person that works as a digital nomad while a tourist. The distinction is arbitrary. Countries can make whatever rules they like, but if you want tourists, you want digital nomads. NZ gets plenty of backpacker tourists that spend fuck all per day and we welcome them.
Getting a VISA to work in NZ means quite a bit of paperwork but it's still a lot easier than Australia. Originally, I wanted to do my internship in Australia but didn't get a Visa but the friendly Kiwis let me in. I had a blast in NZ and love the country.
> Thailand accepts foreign cockwomble tourists, so I can see little reason not to accept cockwomble “digital nomads” as well
As I mentioned, I live in a South East Asian country and have for many years. There is a difference between tourists and people staying long-term and working illegally on repeated tourist visas.
Fundamentally, though, it isn't up to you or me. Those countries have their laws. They made their decisions. They don't want that marginal money. It isn't up to a bunch of white foreigners to tell them they made the wrong decision and laws don't apply to them.
Both Thailand and Vietnam have recently (in the past 6-12 months) changed their visa system to try to get rid of these illegal workers.
1. My summary: it’s illegal to be a digital nomad on a tourist visa. My response: illegal doesn’t mean the law is sensible. You make no argument that it is sensible. We all accept the laws given to us. I’ve argued there is very little difference between a tourist and a digital nomad (within the limits pointed out). “It’s illegal therefore bad” is not a very compelling argument in any country.
2. My summary: Digital nomads don’t pay taxes and are not paying their way. My response: I have pointed out many ways that it surely makes economic sense to have foreign earners in a country even if they are on tourist visas.
Also, repeatedly bringing up “white” in your comments is borderline behaviour IMHO, and doesn’t do you any favours.
Yeah, for sure. I was including sales tax etc in "what you consume". And there's actually a good argument to be made that countries that are popular digital nomad destinations could benefit greatly from setting up a specific visa class for remote workers. Most visa laws do not take remote work into account, or else unenforceably prohibit other sources of income, and a country that took a careful look at the up and downsides and set something up accordingly could reap serious benefits.
Morally it's a bit hazy at the moment. But if we think we'd be OK with someone living in our own country in three month chunks, while all the income they generate that is not spent on local goods/services essentially goes offshore, then no problem I guess. Add to that the fact that for the analogy to be accurate, our hypothetical person would likely speak our country's language at an extremely basic level, or not at all.
edit: just saw your edit and now I will have to edit accordingly >_<
edit:
>Working visas allow people to take jobs from locals, which not what “digital nomads” are doing.
This is getting into slightly different ground than my OP. In the Asian countries I'm familiar with, almost all visas for foreigners do not take jobs from locals--they are for jobs locals can't do for whatever reason.
I agree with some of what you wrote about NZ and digital nomads' spending generally, but I still think it's reasonable to expect tax revenues from someone who is employed and in a country longer than 180 days. That's when the NZ government starts to consider NZ citizens as NZ tax residents--after 180 days in country. "Wanna stick around? Gotta contribute." is just my basic view I think, but thanks for your input.
I did a quick squiz at numbers. GST and income tax are about equal sources of revenue to the NZ government[1], and social services plus education is about 1/2 of government expenditure.
NZ export income is ~40 Billion, with 5 million inhabitants (USD4000 each).
So anyone from a first world country earning overseas income and spending it here is a massive win for NZ, even without income tax (which pays for things they don’t get: social services and education)... So long as NZ can send them home if they stop spending, send them home if they can’t pay for expensive or chronic healthcare services, or send them home if it is causing significant negative social externalities. Even retirees from other countries should be welcome if they are spending savings.
The Thailand example is more complicated and I did look at some of the economic numbers. I would struggle to see how getting significant foreign earnings could be anything but economically positive for Thailand - so long as the “digital nomads” are spending above say USD10000 per year and are not causing significant social harm.
> Working visas allow people to take jobs from locals, which not what “digital nomads” are doing.
This is an important point. What do anti-immigration people in the US complain about? Immigrants taking jobs and benefits. That's it. Digital nomads are doing neither.
That still doesn't make it right, but maybe it's a low priority problem for the government.
While I don't agree with breaking your Visa terms; I think you are not in the same boat as these guys. Doing Visa runs is exhausting, there is a price for stability and thus these guys are paying it accordingly.
Also most of these countries (ie: Thailand) rely a lot on direct taxation and provide no services for foreigners. So they are not really leaching that much on government expense.
No it means when I'm vacation I want to be with people that are also interested in doing interesting things. Not bros on laptops talking about their social media engagement.
That's a brilliant summation. My sentiments exactly. It's like they've managed to bring the office with them and get the worst of all worlds in the process.
The problem is that it was written in a different time for a different world. In 2007 having a web shop was not commoditized, so there was some value in a drop-shipping business, factories and wholesalers had no presence on the web, there was much less competition in e-commerce, Amazon was not so ubiquitous, Aliexpress did no exist, Shopify was in its infancy and unknown, ... Edit: So in short for me it's outdated.
> what part of business is not currently commoditised?
In the business of selling online? None I think, I don't see how dropshipping can fit in the future, what's the value of having a middle man that don't stock when goods producers can setup their own online shop or sell directly via Amazon?
(Sorry if I miss your point or I wasn’t clear English is not my first language) I think producers that can selling directly on their website can be pretty legitimate (in theory they already know how to handle inventory and logistics).
What I wanted to highlight was that nowadays given that producers can sell directly, or through Amazon if they can’t handle logistics, dropshipping has become irrelevant.
There are parts of it that are just dog shit, complete drivel. I read the book when it first came out and can't understand why it's so popular after all of these years. Came off as bits of pop psychology with a large helping of self-promotion, and sprinkles of bullshit. I do recall coming across some interesting tidbits, though.
For some reason it reminded me of Trump's first book, The Art of the Deal.
You guys are really doing Tim Ferriss a disservice here. Don’t want to shill for him but I follow his podcast and read a few of his books. There’s definitely good advice in there in managing time/energy, business engagements, career planning not to mention all the guests he’s interviewed who give lots of solid, unique advice.
It depends on what you're trying to get out of it.
If you really want to work less and enjoy life more, the FIRE community (Mr Money Mustache is a good gateway) is a more sustainable/achievable path. The specific types of businesses that The 4-hour Workweek recommends (dropshipping, podcasts, Youtubing, blogging, consulting) are crapshoots. And we can't have a world where everyone's dropshipping and peddling their e-courses and newsletters to everyone else for a living - it makes no sense on a macro level.
It's still a fun, breezy read and opens your eyes to other possibilities.
IMO The 4-hour Body is way more useful and practical. Pretty much everyone who reads it can find something that will benefit them.
I read the book 10 years ago and it was hugely inspirational to me. From what I remember it was not about drop-shipping or specific tactics (it does mention virtual assistants), but general ways of thinking, like the 80/20 rule. For me, he really pioneered the idea of "the side project" as a thing people were doing seriously, and gave many examples of different businesses people started on their spare time that lead to a full time income. So Tim Ferriss is not a "get rich quick guru". The 80/20 rule, outsourcing things you're not good at, will always be relevant, and that's why his books/podcasts are so successful.
Drop shipping and similar high-margin ventures work when there’s no competition. There’s no reason why it wouldn’t work in the beginning but eventually competition appears and margins go down as the market readjusts.
> there were also a lot of sincere people just trying to get out of the rat race.
With the relatively small start-up costs, if you can limit the downside risk it's worth a shot. But as with anything with a low barrier of entry people grossly miscalculate the odds of success - easy to begin does not equate to easy to win.
And that's when the "$0 to $100,000 in 30 days" ebook hucksters jump in with all the answers.
Speaking of which I used to watch MTV Cribz back when I was a kid. The cars were rented, and the homes apparently never even belonged to the celeb. Was all manufactured, which I understand given the amount of crazies, celebs would not want to show off their homes. And the cars being rented to maintain their status.
I was watching an episode a while ago (forgot which one) where it was obvious the two rappers had never even been in the house before, like having to look around what sort of room it was before saying 'this is the lounge' or whatever. There was a picture of a sail boat that they looked at for a bit, slightly perplexed, and then said 'yeah this is a picture of a boat because we like boats' or something like that. It was hilarious.
From stories I've heard from exotic car rental companies, it seems they end up renting to people basically at cost and the real money is made when they ship out 10 cars at once with a full time handler for a photoshoot.
Worth noting that dropshipping is not particularly new nor particularly the province of undercapitalized mom-and-pop operations. Some of the largest retail/wholesale companies in the world also dropship; it's an obvious thing to do if you own a channel, don't want inventory risk, and can put up with the substantial challenges involved.
(I learned the word in 2000 when working for an office supply store, which was happy to take inventory risk on paper or printer ink but did not want it on $X,000 pieces of furniture, so if you ordered them they'd arrive at your door straight from the factory.)
Dropshippers are literally rent-seeking [0] middlemen, though, and their actions are contemptuous on the surface, for the harm done to consumers. In addition, it seems like their relative wealth is creating wealth inequality in some Southeast Asian locales, which is the calling card of neocolonialism [1].
I don't see why we shouldn't judge marketers harshly, in general, and these folks in particular seem particularly unctuous.
Drop-shipping is not rent-seeking, any more than any retailer or wholesaler is rent-seeking. Is anyone you buy from other than the direct manufacturer a rent-seeker?
From WP:
Rent-seeking is an attempt to obtain economic rent (i.e., the portion of income paid to a factor of production in excess of what is needed to keep it employed in its current use) by manipulating the social or political environment in which economic activities occur, rather than by creating new wealth. Rent-seeking implies extraction of uncompensated value from others without making any contribution to productivity.
Drop-shippers don't manipulate the social or political environment, and the value they provide is the same as any retailer. They just don't take on as much risk or physically handle the goods. It's a sales and marketing business only, and margins are both more volatile and slimmer on average as a result.
I think that you're overestimating what dropshippers actually provide to the economy. Like Instagram-style influencers, dropshippers are ultimately advertisers; they create consumerist desires where none previously existed.
To quote from "Office Space":
> Bob: So, what would you say you do here?
> Tom: Well look, I already told you! I deal with the goddamn customers so the engineers don't have to! I have people skills! I am good at dealing with people! Can't you understand that? What the hell is wrong with you people?
Just like Tom, dropshippers are redundant at best and harmfully interfering at worst.
The largely white people dropshipping in SEAsia are a drop in the wealth inequality bucket compared to uber rich SEAsians living in their own countries.
Sadly, HN regulars neither understand nor respect the concept of neocolonialism. The typical HN user seems in denial about the existence of the American Empire [0], and it's not obvious that American expats form a network of global influence, from operating PMCs [1] to OFCs [2], unless one either does the hard work of reading, or one gets linked directly to the relevant articles.
Additionally, HN is not built on very good software. On higher-quality fora, like Lobsters [3], hyperlinks can be embedded directly into paragraphs and do not disrupt the flow of text. HN is a backwards and primitive site in comparison.
Imagine if the regulars were willing to tackle ideas like the concept that the USA itself is a tax haven [4]! No way would people be able to talk about that. So we must take it slowly and carefully introduce folks to these ideas.
Edit: [5] just broke within the hour. Here's a story of an American expat engaging in bad conduct abroad. I didn't even have to go searching for this; it showed up on Imgur while I was trying to forget the fact that I am being downvoted, yet again, for being a leftist with facts.
I dropshipped from 2001 to 2004 in the jewelry market.
I never really set out to do it, just stumbled into it. I had a friend in the jewelry business that tipped me off on the potential so I started exploring the opportunity. I was in college and thought it an interesting real-world challenge compared to what I was working on in my classes. It ended up paying for my graduate degree and then some.
This was years and years before turnkey solutions. So I built my own. Everything was held together with ColdFusion MX 6, which I was a big advocate at the time and into that dev meetup scene.
After 6 months of development putting in tons of late night hours, things were fairly automated. I would scan daily email reports and any process exceptions, too, were emailed to me. I never achieved astronomical volume, but it made a decent chunk of change. Just ran on cruise control sustaining me and my family through graduate school.
I was an early integrator with the jewelry dropshipper. Orders and order status was communicated over FTP. Cue batch processing jobs. They are still around btw. At the time, they supplied most brick and mortar jewelry shops. Probably still do.
This, of course, was before social media of any kind, so my channel was eBay. I was an early integrator with eBay's new API built on something called SOAP. :) I hated it, but after complaining in their dev forums, eBay paid for travel and hotel to their conference in 2002(?) to give feedback in a private session with their developers. I have to give them credit, they were really trying hard to keep things simple and were sincere.
There wasn't anything like Stripe at the time, so I was one of Netsuite's first (very) small business customers just as they were beta testing online payments (iirc backed by Authorize.net). NS had a comprehensive CRM, order fulfillment, etc. solution. It is funny to think that NS was actually cheap relative to other offerings. Open sourced a ColdFusion implementation of the integration and a ColdFusion framework ( bothhosted on tigris.org... anyone remember that?). Both had users for a few years.
I built an e-commerce website (I sometimes go browse it still on WayBackMachine to reminisce) to try to steer purchases away from eBay to avoid fees. Was navigating the gray area of auction, buy it now, and linking back to my site. Sometimes would get reported for policy violation.
In the end, I didn't have budget to market outside of eBay, nor the entrepreneurial spirit to grow it, nor the inclination to bring in investors. My heart wasn't in it once the technical challenge wasn't there. A pattern I've unfortunately repeated over my career.
After my graduate degree, I sold it all to a local jeweler and transitioned it to them. They ran it for a few years to supplement revenue that their brick and mortar store was starting to lose because of online jewelers. I got paid for periodic work to fix a bug here and there. They shut it down in 2009 when their store went under. :(
Overall, it was a fun run. I learned a heck of a lot early in my career.
I've had a few dropshipping businesses over the years. Here is my experience:
Margins are tight. You need to have enough money in the bank or credit to cover loss. This will happen, especially if you are buying anything overseas.
All suppliers need to be vetted and checked out. Companies will lie to you, just to get your business.
Counterfeits are rampant. If you have a supplier that will sell you something name brand for 1/3 the cost, it's 99% a fake. This will result in: possible lawsuits (if they are in China, our laws don't apply, so the law will go after you), lost shipments at the border (you will most likely eat the cost for this), and losing customer's trust.
On top of this, it's so easy for your dropshipping company to steal your customers from under you.
Creating your own product/service is the best way to have a long-lasting business and you really won't get rich quickly with any dropship business.
I did it in 2000 when it was harder to get setup but margins were great even on electronics like plasma TVs and projectors.
I hacked an oscommerce store and piped in inventory from my drop ship warehouses.
The side benefit was getting all my personal electronics at a discount.
Eventually dropshippers started going crazy low and disregarding MAP pricing so margins were super thin. Some distributers of mine even started direct to consumer sites and selling at the same or lower price as I could get from them.
I switched to selling products overseas to Italy that they couldn't get there. Also found some niche electronic products that had margins, manufacturer support (they dropshipped direct not via a distributor) and did well there. That was fun sourcing and marketing unique stuff I liked.
Outside of selling unique products, I did my best buying closeout or specials from my distributor in bulk and shipping orders overseas myself. Margins were very nice and fulfilling myself was easy.
If you have a business and a sellers permit then you can get setup with distributors. Petra was one I used back then. It's way easier to dropship nowadays, way more competition, terrible margins in general.
1995-97: My the key to drop-shipping is buying cheap from one market and selling expensive to another market (market arbitrage). I did this for classic video games - bought from thrift-shops and sold via the web - my web-store was build with MS Access piping out raw HTML that I FTP'd. Customers found my via Usenet and Yahoo's curated links.
Worked well - but the problem is that it's easily repeatable because there's no regulatory capture, patents, large-startup costs or other things that makes it hard to start. I soon had competition that killed the margins.
Several people that did likewise wound up training their own competition - there employees would leave and mimic their business model.
So if you do this, or something like this, make sure your profitability event horizon is really short. Make sure you can exit the business without holding the bag of expenses or inventory.
Yeah, that's just retail (assuming thrift shops are considered retail) arbitrage. Dropshipping specifically is when you accept orders for products you don't have in inventory, and someone else fulfills that order for you.
When I started machinist shop it took me wayyy longer to profit from that shop than dropshipping.
Testing is easier and cheaper. Just don't buy bullshit course from idiots.
It takes special type of person to crack dropshipping. If you know how conversion rates work, you've basic math, design, and copyrighting skills and you know how statistics work, you can make good money.
That said, don't go crazy with greed or you'll blow up your merchant processing account - that's a huge problem to recover from.
You don't want bunch of angry customers and if you are totally unempathic to them, you'll lose in long run.
While a student in Finland, I dropshipped Japanese comic books to Finnish customers. I kept inventory for many items as well, but whatever people wanted that I didn't have in stock I'd dropship for them.
It worked OK, but wasn't lucrative at all, just a bit of side income while studying. Can't recall exact numbers, probably somewhere around $500 / month.
There was a fairly well-known account here years ago for someone who had successful small business dropshipping television racks for wall. Apparently there was a lot of demand for that with small institutions such as nursing homes. I don’t recall who it was. I got it confused with the person who made bingo cards or whatever. Maybe it was the same person.
Does anyone recall who does? I remember reading various reports from someone who did wall mount stands and had a successful business, something like an annual turnover of 150 K.
I feel like it’s someone who is fairly well known around here, and considering I have had an account for about 10 years I feel sort of embarrassed that I don’t remember their name.
I did it before the hype and found some trending items.
Check the google adwords and the math added up.
It worked, no record profits tho.
Then big local sellers started undercutting me a lot.
I assume they have some data mining trending processes running. Ad costs spiked and it wasn't profitable anymore.
It was a fun try, but not worth it for me.
I have sold some t-shirts in this manner, which is one of the primary subclasses of these stores. Doing this has the advantage of access to legit suppliers based in the USA, so you get predictable shipping times and pretty good quality and customer service. However, it's way more expensive, and the quality of DTG (direct-to-garment, essentially inkjet printed t-shirts) is not as good as screen-printing. I now print my own stuff out of my garage and use on-demand printing as a way to validate ideas or fill gaps in inventory.
I know a couple but they are operating at the (my) local market which is harder to penetrate (Arabic language) and they are not really making that much. Just enough to get by. Also need to be here most of the time to get in touch with customers.
...claims to have made “around 400k, I guess” in his dropshipping career. (When asked to provide evidence, he told me that he didn’t keep records. ... I don't understand how a this youtuber person can get successful?! Is it his speech, his appearance or some other magic?
There used to be a time when products and innovation made in America were deemed high-quality and highly desired for. I am talking non-software.
Here we are talking about people who make a living out of cheap potentially slave labor and to top it off, selling courses to others to be a marketing/ecommerce snakeoil salesperson.
Truly disgusting to think about what we are turning into as a society.
Is there a future in which manufacturing would ever return to the US? Legit question....
I suggest maybe there's a huge difference between true 'drop-shipping' and literally creating a product for export.
You don't need to 'touch the product' to become a business.
Selling a commodity product is like having a little store on the web.
Running ads and the shipping right from some regular retailer, the most 'pure' form of drop-shipping is really just price arbitrage, this will always exist but I can't imagine for too long.
Working with a factory to develop a product, marketing it, and selling it, well that's a regular business.
They are providing real products, as advertised, and usually process refunds etc honestly. While quality and service aren't likely to be amazing, I doubt they get scam-levels of chargebacks.
Besides, payment platforms don't mind if there are chargebacks and refunds. _They_ still get paid.
I ordered some boxed EPYC processors from an East Coast online shop who dropshipped OEM/tray processors from Ingram-Micro (a large US wholesaler of computer parts used by many small stores) thinking I wouldn't notice the difference. Either the store or the dropshipper substituted cheaper parts that don't have a warranty, so I turned around and sent them back. They can both finger-point to each other if anything goes wrong. Complete waste of time and credit card space.
In my view, a successful company should own as much of production, supply, distribution, sales, and support as close to the customer's last-mile as is pragmatic. For example, Moen (US market) plumbing fixture products seem to have excellent customer/tech support, documentation and parts dispatch. McMaster-Carr, a commercial parts and tools supplier, carries zillions of hard-to-find SKUs and dispatches them quickly. I can't see how outsourcing the most vital departments to the lowest bidder does anything but introduce potential risks for organizational self-immolation.
Edit: hold on. I have several colleagues who are foreign citizens in America on visas; and I’ve never heard of them being called expats. I feel like I only ever see that word when applied to Americans or British citizens moving to cheaper areas of the world.
> Think the difference is that an expat makes his wealth from outside that country he migrated to and Immigrant makes money from the country they migrated to.
None of this stuff is an official definition, but this seems to be how most people essentially mean the term, or rather what happens to be true when they use it.
I'm basically a permanent traveler. I might spend years at one location working remotely. Calling myself an immigrant really seems to lack some important distinctions that explain my situation compared to a visa worker.
Even when I'm technically an immigrant and an expat is just an expatriate, there's more nuance to how we use the terms. And to me it comes down to power: when my fun is over, I just buy a ticket home.
> Think the difference is that an expat makes his wealth from outside that country he migrated to and Immigrant makes money from the country they migrated to.
I don't agree that this is at all universal, I moved to a (marginally) more expensive country for a local job, and am still definitely considered an expat. And while it's not an official term, there are plenty of companies targetting people like me, "expat mortgages" and so on. For them they can target their market, for us it means that we know they'll be good enough speaking professional English.
> And to me it comes down to power: when my fun is over, I just buy a ticket home.
This rings more true however. I think if you still have some feeling of "I'm likely to go back some day", rather than putting effort in to learning the language, making local friends, and possibly putting down serious roots, that's more expat-like.
The distinction is not so much about source of income as it is about the reason for their relocation, in my experience. Expats come to a country more so for adventure than opportunity. Not to say they can't thrive there and integrate closely with the culture, just that it wasn't really a relocation driven by necessity.
In my mind, it's the word Americans use for Americans living in other countries. I doubt the locals in whatever country they're in consider them "expats." Just Americans.
"I doubt the locals in whatever country they're in consider them "expats." Just Americans."
The locals definitely refer to them as 'expat' or something along those lines in local vernacular.
And it's generally a Western thing, not just American or Anglosphere.
These people are completely unlike immigrants, there's almost no comparison.
If someone married a woman from Bali, moved in, was working as a manager in her Father's factory ... the term 'immigrant' might apply.
Most ex-pats are temporarily stationed, they are not there permanently, they work for international conglomerates, governments, news agencies, universities. The 'drop shipper' thing is a little specious but roughly in that category.
For me, an expat is somebody who temporarily works abroad for, say, 2 or 3 years, with company housing allowance, expat COLA allowance etc. In the US, this is often reflected by their L1 visa.
An immigrant is somebody who moves to a different country and works for a local company (which might be the same one as the one they worked for in their home country) with a local salary and benefits.
Expats often transition into immigrants.
Being a citizen is not a part of the equation. I've been an immigrant for decades, but I'm not a US citizen.
I’ve noticed that British and American migrants usually refer to themselves as expats while most other nationalites that I’ve spoken to refer to themselves and/or their fellow citizens as migrants when living and working in another country. It kind of bugs me; it’s as if there’s an unspoken assumption that an expat is better than a regular migrant who may have uprooted themselves from their native land due to economic necessity.
Disclaimer: I’m Irish and spent a couple of years as a migrant worker in other European countries during the mid-90s – mostly to get a better cultural understanding of what life is like for our fellow European citizens.
Thanks for the clarification on the usage of those terms. I grew up in the 80s where emigration and the plight of Irish emigrants were hot topics. Thankfully, the economic situation had improved by the time I reached adulthood so migration was a choice but it was still many years later before I came across the term, “expat”.
There's Irish people in the south of Europe who consider themselves expats and that they're part of the Irish expat community too.
My own interpretation is based on the underlying intent of someone moving countries. If you're not intent on pursuing citizenship and are there mainly for business or retirement, you're probably going to call yourself an expat.
If you're intent on moving, building a life and becoming a citizen then you're an immigrant.
I've found I really don't get on very well with "expat" Brits¹, but "immigrant" ones are fine.
Partly, it's that the "expat" ones tend to be working in a bank for a year or two, and just talk about money, but I also think you're exactly right about the unspoken assumption. When I meet "expat" British people I feel like I'm one step away from a comment like, "oh, you actually like the pickled fish? I haven't dared to try it myself" or, "no, we don't really like the beaches -- too much nude sunbathing".
And this is in Denmark. Further away, this presumably translates to living in a compound, sending the children to a British private school and a social life revolving around the English Pub.
French and German friends have grumbled about emigrants like this from their countries, but I'm unlikely to meet them. Last year I was given a menu in "Nordic" in a restaurant in Greece, based on the brand of backpack I was carrying -- it turned out there was a Danish/Swedish/Norwegian "enclave" nearby.
¹ And Canadian, American, Australian, and to a smaller extent New Zealand or Irish -- they exist, but there are more British people here than all the others combined.
If you move somewhere with an intention of making a new life there in the place, then you're an immigrant. If you are temporarily relocated, usually for work you're an expat. If you follow a seasonal circuit for work, you're a migrant. If you wander without following a circuit, you're a nomad.
I always took this to mean they identify more strongly with their home country, and don't want to be mistaken as someone who is willing to fully acclimatise to the local ways. They're keeping a way out just in case.
I don't know if there's a racial component but thinking about it more, people I've heard described as ex-pats are basically always white in a non-white country. I've never heard anyone use it to refer to Asian non-citizens working here in Australia for example, even if they technically meet the criteria.
I've heard Indian and non-white British people use the term, and I've heard these people use it here in Denmark.
I think the Indians use it through knowledge of British usage, and some British people use it in a slightly snobbish way wherever they are. "Oh, we're expats. We'll go back to England before Rupert starts school."
There might be a few bros out there doing well at this, that is, actually selling things to consumers, but mostly it's selling inessential products to indifferent consumers at tight margins. There's nothing wrong with dropshipping as a business model, per se, but there's a lot of hype and shadiness going on in these circles.