Legal disputes may occur both in a physical and virtual business model. Find out the common legal concerns in dropshipping before starting one.
The Covid-19 pandemic challenged the financial stability of many. It was tough for a lot of people to have a stable source of income; even established businesses were struggling. Although the health crisis tested everyone’s resilience in all aspects, it introduced a new era to the eCommerce industry.
Ecommerce is nothing new. It has been around for several years. However, it was only during the pandemic that online businesses immensely thrived. There was a significant growth of online businesses, rising along with the increase of demands from consumers due to the inaccessibility of physical stores.
Dropshipping is one of the models of eCommerce that benefited from the health crisis. It is different compared to a traditional online store. In dropshipping, one can start an online business without having an inventory or stock of physical products. A dropshipper works with a third-party supplier who will supply the items and ship them to the buyer. In a nutshell, the job of a dropshipper is to advertise and sell products online.
The dropshipping model is ideal for beginners in eCommerce. It does not require huge capital and a stock of products. Moreover, you can operate such a business anywhere as long as a stable internet connection is available. Indeed, this business model has many to offer; you can find out more about it here at Emily and Blair.
Is Dropshipping Legal?
The legality of eCommerce is one of the common questions beginners ask. Dropshipping is 100% a legal online business. Although it is perfectly legal to operate a dropshipping business, legal disputes sometimes arise due to common issues. Here are the common legal problems that you might face in a dropshipping business.
#1 Breaching the Terms and Conditions of an Affiliate Program
Amazon Associates is the most popular place for dropshippers to do business. It offers a wide array of products and accepts a third-party scheme in selling products like how a dropshipping business operates.
While Amazon’s affiliate marketing program is lenient towards third-party selling, otherwise could be said when you breach their terms and conditions. Every dropshipper must strictly abide Amazon affiliate program’s terms and conditions to prevent legal issues.
#2 Beware of Fraud Third-Party Suppliers
Before starting a dropshipping business, make sure to look for a legitimate and trustworthy third-party supplier. Most of the legal concerns in this type of business model come from issues with fraudulent third-party suppliers. Take note that you are the seller of the product: therefore, the consumer will go after you rather than the supplier.
This problem can be resolved and prevented by creating a Dropshipping Agreement Contract. Also, be careful when choosing suppliers.
#3 Legality in Countries
The legality of a dropshipping business does not depend on the seller’s country but the platform being used. Dropshipping is generally legal in all online market platforms. However, beware of following the platform’s terms and conditions to prevent legal disputes.
You can also avoid these legal concerns by doing extensive market research. Learn more about dropshipping through reliable sources like Emily and Blair.