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The seller in question was selling items they didn't have at a nearly 50% markup.
Basically the way it usually works is.
Chinese knock off mass factory, makes stores and has the items.
They find a guy in America and say "Hey can you list our items on ebay, when you sell them, we'll take $20, you can probably sell them for $50.
Guy lists item for $50, someone buys it, he then just e-mails the dropshipper and asks them to send it straight to the buyer. Sometimes he will have to give ebay a fake tracking number (because ebay doesn't approve the practice).
Point is the drop shipper is just there to conceal the actual source of the product. That's generally because they are sketchy in some other way.
A co-worker of mine at one point got into a drop shipping scam. She was selling golf clubs that way (she was selling them about 80% of expected retail, place she was buying from was charging her about 25% of retail. She didn't know (but probably should have guessed) that the clubs she was selling were counterfeit, and she about had a heart attack when her 2nd customer called her out on it (she refunded him and took the loss).
Yes, and it's basically a given that most of this crap is counterfeit, unless it's a scheme as dopey as simply ordering it from Amazon and shipping it back to you. Which still isn't a guarantee that it isn't counterfeit, come to think of it.
That profit margin for the drop shipper has to come from somewhere.
And this is coming from someone who deliberately orders counterfeit crap. (Yes, knives, how did you guess?) But if you're okay with that you may as well buy it directly from whoever is making the knockoffs in the first place via Aliexpress or whatever and pay a lot less in the process.
Me? Order an obvious fake of an overpriced knife so that I can decide if I like the design in person? Nah, never!
quickly shoves small box of counterfeits under bed
Ha-ha, your box of counterfeits is small...
It's not the size of the box that matters, it's how you use it!
At least, that's what my mom told me