Now I understand why people think dropshiping is evil! What you describe is bad, but it's not dropshipping. Stealing designs, re-selling without licensing or permissions is NOT dropshipping.
In dropshipping the manufacturer/supplier/owner of the product definitely knows about the "guys with the shinier websites" because they are the ones who send the product to consumers. The product owners know about the "shiny websites" because the shiny websites send them orders to ship product. This is dropshipping!
The suppliers explicitly agree to these arrangements because it saves them from the hassle of marketing. The guys with the "shinier website" do the marketing for them, so they can reach more consumers. The dropshipping business is helping them sell more products than the suppliers could do themselves.
It's different from affiliate sales because in dropshipping the "shiny website guys" run an actual store of their own, take payments and do customer service. They pay the suppliers for the goods, at wholesale prices just like in traditional wholesale/retail businesses.
Dropshipping businesses can be horrible, selling over-priced, low-quality stuff to unsuspecting consumers (bad) - think AliExpress - or they can be beautiful, ethical mom-and-pop businesses.
A good dropship retailer curates a range of high quality products that their customers will love.
For example, a soft furnishings business might not want to manufacture lampshades, since that's not their expertise, so they would find a lampshade manufacturer to supply lampshades to them. They could do the traditional wholesale/retail model and buy 100 lampshades; keep them in a warehouse and pay the lampshade supplier upfront, or they could dropship instead.
To dropship, they would ask the lampshade supplier to enter an arrangement in which, every time the soft furnishing website sells a lampshade, the supplier ships it straight to the consumer. That means the soft furnishing business doesn't need to get a bigger warehouse or pay for a heap of products upfront. And the lampshade supplier sells more lampshades. It's a win-win.
That is what dropshipping is. Not stealing designs, not re-selling without permission.
Okay, hope that helps. Love the rest of this article - dream lady yeeeahh.
