NEW YORK — A popular technology company that has helped launch thousands of online retail sites has become a favorite tool for fly-by-night businesses looking to cash in on the coronavirus pandemic.
New e-commerce sites that use the company’s services are filled with wildly exaggerated claims about virus-fighting products.
The New York Times analyzed registrations with the company, Shopify, which allows just about anyone with an e-mail address and a credit card to create retail websites in short order. The company, which in the past helped build successful e-commerce sites like Kylie Cosmetics, has registered nearly 500 new sites over the past two months with names that include “corona” or “covid.” Untold others have been started using other names.
One of the new sites marketed an “oxygen concentration” machine for $3,080. Another had the “Corona Necklace Air Purifier,” which for $59 claimed to provide “All Day Protection.” A third offered a $299 pill that promised “Anti-Viral Protection” for 30 days. And sites such as CoronavirusGetHelp.com and test-for-covid19.com marketed home test kits for $29.99 to $79, none of which have been approved by the Food and Drug Administration.
Many of the sellers do not actually possess the goods, nor have they verified that the products are legitimate. Often, the sites’ operators are middlemen who fulfill customers’ orders by buying items on other websites — a kind of digital arbitrage known as “dropshipping.” Shopify is attractive to these new businesses because its software can integrate the sites with the distant vendors, mostly in China.
Amy Hufft, a Shopify spokeswoman, said the company last week closed more than 4,500 sites related to the virus. She said sites that did not back up the medical claims they made were suspended from the platform. By Monday, nearly all the sites identified by The Times had been removed.
“Our teams continue to actively review COVID-19 related products and businesses, and stores that violate our policies will be immediately taken down,” she said in an e-mail.
Though Shopify has been policing the new sites, it also encourages its customers to go into the dropshipping business. It offers a guide for starting such a business and makes money from them by charging a monthly fee and a percentage of sales. The Canadian company is one of the largest turnkey e-commerce sites in the world, bringing in $1.5 billion last year. In February, Shopify announced that it had hosted over 1 million businesses.