A close look at the development of Spocket. Generally, most of the reviews are positive with mid to lower 4-star ratings. A 1.8-star rating on one site is an eye-opener. Really? After all the money spent on its development, is Spocket a dud app? There are many who say it is.
- 1 Why was Spocket Founded?
- 2 An Overview of Spocket
- 3 Some Background on Saba Mohebpour
- 4 How was Spocket Funded?
- 5 How Does Dropshipping work with Spocket?
- 6 The Problems Merchants have with Spocket
- 7 Problem 1. Cost of items to the drop shipper.
- 8 Problem 2. Adding Shipping costs
- 9 Problem 3. Editing your items
- 10 Problem 4. Fulfillment issues.
- 11 Problem 5. Value for Money and Customer Service.
- 12 Conclusion.
Why was Spocket Founded?
When Saba Mohebpour created an online store to sell smartphone accessories, he became frustrated with the time and effort it took to maintain proper inventory and negotiate discounts with suppliers.
That’s when he came up with the idea for Spocket.
With the help of Machine Learning, Spocket is set to revolutionize the dropshipping market and aid online retailers compete with Amazon- by removing the need to hold inventory and erasing upfront costs for retailers
…to remove inventory from the online and physical retail by using the dropshipping model and fixing the $1.1 trillion issue called inventory distortionSpocket founder Saba Mohebpour. Edited.
It looks like a version of the Amazon Central Sellers program introduced in 2019
Amazon and Aliexpress
By 2018, Amazon already had warehouses at various locations in the world and was traveling along quite nicely (business-wise).
Aliexpress also, and others who saw the Amazon model as an efficient way of doing things, were also doing quite well.
There were also, within the dropship industry product importing apps that could import products from the Aliexpress product site into dropshipping stores such as Shopify.
Nobody was doing this for US or European products because there was no centralized product point to download products from in the US or Europe.
Amazon developed as its own drop shipper with warehouses for holding inventory.
Amazon moved on from just selling books to selling everything and anything, much like Aliexpress.
It was still selling books when Alibaba was started as a B2B business by Jack Ma.
Then followed Aliexpress with thousands of suppliers and the creation of the modern dropshipping model. B2C
However, although they both relied on efficient logistics, their business models were different.
Amazon relied on its name, advertising, and the use of affiliate marketers to promote and sell the products from its supplier base.
Aliexpress relied on its name, advertising, and the dropship model to move items in its supplier base.
A customer could buy a single item from a website (e-Bay for ex.), have it shipped to their address by the manufacturer/ supplier (located in China), and receive the item in about 7 to 14 working days.
Although derided as cheap, a good percentage of the items were actually made by US and European companies that had relocated to China.
Some items even developed cult-like followings. Fidget spinners were one not-that-long-ago.
Spocket’s idea was to build a stable of US and European suppliers and supply their products to people using dropship platforms such as Shopify, BigCommerce, or Wix.
In effect similar to Aliexpress, but without the warehousing and logistics of Amazon.
An Overview of Spocket
|Founders and date founded||Saba Mohebpour. 2017. CEO|
Tom Hanson Head of engineering. Co-founder.
|Headquarters and number of employees||Vancavour, Canada. 39 employees.|
|Product Idea and features.|| Help online retailers compete with Amazon. The vision of Spocket removing inventory from online and physical retail by using the dropshipping model and fixing the $1.1 trillion issue called inventory distortion. Linkedin|
Product importing. Order processing. Order fulfillment.
|Annual Turnover||2.7 million in 2022. from approx 50,000 entrepreneurs and 20,000 merchants.|
|Awards.||Spocket was recognized as a top North American Startup in 2018 by TechStars, Seattle.|
It also earned the title of one of Canada’s most promising startups
Saba Mohebpour was named one of the Forbes top 30 under 30 honorees.
Some Background on Saba Mohebpour
Spocket was founded in 2017 by Saba Mohebpour and is headquartered in Vancouver, Canada.
The company was a finalist in the Techstars Seattle accelerator program.
The platform focuses only on improvising dropshipping programs.
Around 2016 he started a dropshipping store to help with living expenses.
In his own words from an interview in 2018.
“I was building my own e-commerce store, when I realized how time-consuming and difficult it is to find products. I had to contact more than 400 suppliers and makers, to ask for collaboration and product discounts, because I couldn’t afford to purchase products in bulk.
I started Spocket to help small online retailers, many of whom already have an audience or are influencers on social media, source and sell highly discounted products without having to deal with inventory or logistics.Saba Mohebpour 2018
If you were to believe the hype, it so far has been a success, with around 60,000 (?) online entrepreneurs and 20,000 vetted suppliers.
Not too shabby for someone who arrived in Canada from Iran to study medicine you could say.
He gives an insight into how Spocket was created in the video below.
You can see more about him on Linkedin.
How was Spocket Funded?
- Jul 4, 2017 Spocket raised $500,000 / Pre-seed from 7 gate investors and entrepreneurship@UBC
- Jan 22, 2018 Spocket raised $120,000 / Pre-seed from Techstars and Techstars Seattle Accelerator
- Aug 21, 2018 Spocket raised $1,200,000 from 7 gate investors and 3 private investors.
Totals= a touch over $1.8 million. Currently, the 2022 annual turnover is reported at 2.7 million.
A lot of money for a product importer that also fulfills a sold item.
How Does Dropshipping work with Spocket?
The plugin will be synced to your site, it is basically a simple, quick process
- Select your item(s) from your dashboard area.
- Unlike Aliexpress plugins, you don’t see the manufacturer/supplier’s details.
- You see photos of the item, its cost, and estimated shipping times country it ships from.
- There is a fee for expedited shipping.
- Click add to import list, then download to your store.
The Problems Merchants have with Spocket
To be listed as a merchant on Spocket comes with a lot of rules.
- Spocket allows them to impose greater fees only when they adjust their listing prices accordingly.
- So long as they meet the minimum net discount of 25% for Spocket users.
The end result of this is many of the products listed by Spocket are priced higher than they are elsewhere.
Problem 1. Cost of items to the drop shipper.
The chief complaint is, they can be bought on Amazon for less than the cost to a dropshipping entrepreneur, destroying any competitive edge.
Related article Here.
There is a train of thought that if you can build value into a product then the price doesn’t matter.
However when you have a general cross-section of mostly consumables then the competition is going to come from all angles.
Not only Amazon, Bangood, and Aliexpress but also local supermarkets, Walmart, Home Depot, etc.
If you were a manufacturer of socks (or anything else), I am sure the managers would be looking at efficiencies.
Sending a truckload of assorted socks to an Amazon warehouse or Walmart warehouse is obviously going to be more efficient than having someone in an office packaging and labeling a dozen different products to be sent to a dozen different addresses (some with different shipping rates), via UPS, DHS, or FedEx.
At the bottom end of the chain are the retailers posing as wholesalers infiltrating the dropshipping industry through Aliexpress, Amazon, Spocket, and others.
This corrupts the market for buyers and dropship entrepreneurs alike.
Dropshippers list items from merchants who are really retailers, then do some research when they are not making any sales only to find the originator of the product is 30%(?) cheaper.
The other that has been around for ages are imitations of branded items.
In some cases, people pay more than they would for the branded item.
Problem 2. Adding Shipping costs
For suppliers, there are 2 problems.
- Domestic shipping
- International shipping.
This can be tricky. The supplier has to use shippers recommended by Spocket. DHL, USPS, ePacket, and FedEx.
For smaller items, they can sometimes add the cost of shipping to the retail price and make shipping free.
For larger items, international shipping becomes a pain with different rates to various countries.
Get it wrong and they will lose money. And then have to re-do their shipping again their settings.
The problem. is Spocket only allows shipping rate changes to new products, not the existing ones you have already listed.
To get around that problem, a supplier will increase the price of his product.
Of course, this can mess things up for the drop shipper if he is not notified.
Shipping can be difficult for merchants some shipping companies use weight, while others use size. (cubic capacity)
I once did a bulk order for pet urns.
The supplier had acknowledged receipt of the money. A few days later I checked the site to see if they had been sent.
I sent an email. 2 days later still no answer. The next day…
I got a reply back saying there were problems sending them by post because of the weight.
They suggested we put them in smaller packs and send them that way, but not all at once otherwise there may be customs duties to be paid, as well there will additional postage charges.
I passed all this information on to the customer. He was happy to continue with the order and pay the additional postage (about $60.00 from memory), and so every couple of weeks for a few months he received a package of pet urns until his order of 200 was fulfilled.
As you will see below, with Spocket this sale would never have been able to happen.
Problem 3. Editing your items
There are complaints about not being able to edit the product descriptions on your website.
I am not sure if this is all platforms, but there are complaints about not being able to do it on the BigCommerce platform.
Related Article Here.
That problem didn’t exist on Shopify prior to 2018.
Spocket now says that it can only be done inside Spocket because it will affect transmission errors when sending updates.
So you have to delete the item re-select it in Spocket, do your re-editing, and download it to your site again.
Imagine having 250 products.
It is common among drop shippers to go through their products from time to time and re-edit them to try and make them more appealing.
Problem 4. Fulfillment issues.
Common among the complaints were canceled orders.
Some had experienced Spocket not being able to fulfill orders over a lengthy period before they decided to give them a miss.
Leaving a one-star review to show their dissatisfaction.
Others had orders canceled by Spocket!
Related Article Here
If a merchant doesn’t send the order in the stated time frame Spocket cancels it.
There could be reasons the supplier never sent it within the allotted time frame.
One being he may not have received notification from Spocket that he had the order to fulfill.
The disturbing thing about this 3rd party interference with orders is, that it is left to the seller to handle an unhappy customer who will likely leave a bad review on their website, and others as well as social media.
Running an online business is not easy at the best of times.
But when the app hides all the supplier information you are making decisions based on the vetting process of the 3rd party.
Salehoo has been vetting suppliers for years and even they are not infallible.
But, at least you know within a couple of days of ordering whether or not the supplier is going to meet their obligations because you are able to contact them.
This at least gives you time to source alternative suppliers.
I panicked once, I forget the exact circumstances, but it boiled down to a lack of communication. I had no confirmation from the supplier (I think it was Bangood), that the item had been sent, or any response from the customer. So I went and ordered a very similar item from a different supplier. A couple of weeks later I received a message from the customer saying they had just returned from holidays and they had received 2 clocks (I had wood clocks on my site).
What happened was, they had the postal service hold their mail until they returned from holidays!
If Amazon is out of stock the buyer will know, because Amazon keeps an up-to-date registry of items in its warehouses.
If a product is out of stock, it appears on their website below the product.
If a product is out of stock from a merchant on Aliexpress then the seller will know when he goes to order it, and he will have other alternatives to source the product.
Problem 5. Value for Money and Customer Service.
Spocket customer service seems well below professional expectations.
What I have interpreted is there appears to be a lot of platitudes, but little help apart from help signing up.
Is Spocket value for money?
Not from the reviews I have seen.
It seems to be badly lacking in customer service and value for money.
Once you pay for a monthly or yearly subscription that is it.
The money is theirs, even if you cancel a few days into the so-called Free-trial.
Add in the complaints about product pricing, shipping issues, limited product choice, and customer service beyond the signup, it is a wonder it is still functioning as a business.
Spocket’s lofty ambitions of competing with Amazon have gone backward.
They are so far behind the eight ball they have their work cut out just to come up to par with other established dropship apps.
Some things have changed I believe, you are now able to contact suppliers… for a fee!
The reason for starting Spocket was: “frustrated with the time and effort it took to maintain proper inventory and negotiate discounts with suppliers.”
They have become the very thing they complained about.
Worse, it has become an interfering 3rd party.
That is not going to work in this industry.
Some may say it is the responsible thing to do as it removes unreliable suppliers.
Related article here.
If that is the case then Spocket’s vetting process is another failure in a long list of failures.
All it is achieving is leaving the seller and buyer in a difficult position which does nothing for Spocket’s reputation.
Amazon has its faults and can sometimes be slow to react.
But, it has a reimbursement/damage policy that can be accessed and restitution paid.
Spocket now includes an Aliexpress product scraper.
And guess what? there are issues there as well.
I won’t go into them here, but check out the reviews on Shopify, I am sure you will easily come across some.
There are independent reviews of the Spocket software.
This one rates it at 4.07 stars.
However, I will let this Shopify seller have the last word.
1 of 5 stars
December 1, 2022
Location United States
Used the app for about a week trying to get it to sync while working with their customer service daily to trouble shoot. They couldn’t get it to work. It was suggested that I sign up for an annual plan and still no luck. After 4 days of wasted time, I asked for a refund and part ways. They fought it and only issued a partial refund due to “policy.” That policy should only be in force when their product would actually work. It should be criminal what they did. DO NOT RECOMMENDReview of Spocket on Shopify.