If you’ve spent some time on the internet, then you’ve probably heard of dropshipping. The term combines an action that suggests giving up responsibility, with another sexless term that describes the least desirable part of shopping online. Using your powers of induction, you can probably figure out what it means. Dropshipping is a business model where the business in question sells another business’s products and, when an order is placed, “drops” the latter’s product onto the end consumer by way of shipping, without ever having any inventory.
If you’re feeling sketched out by this whole process, read on and see if we can’t help ease your mind!
Q: Is dropshipping legal?
A: Dropshipping is perfectly legal. Although you may run into other legal issues if the supplier you’re using isn’t what they claim to be. For instance, the products that you’re getting from your suppliers may be supplying counterfeit goods that use the intellectual property of others; you may be implicated in IP infringement lawsuits if you’re not careful.
Q: How can I limit my liability when engaging in dropshipping?
A: You can protect yourself with a Dropshipping Agreement. This is a contract between you, the seller, and the manufacturer you’re working with to supply you with goods. You can customize your contract to specify pricing, delivery standards, defects rectification, and liability for any other issues that you may anticipate, including liability in intellectual property disputes.
Q: Can I dropship on Amazon, Shopify, Big Commerce, and other eCommerce platforms?
A: Dropshipping is allowed on Amazon. Dropshipping is allowed on Shopify. Dropshipping is allowed on Big Commerce and many other eCommerce platforms, including this one. Amazon prohibits vendors from shipping orders directly to end consumers by having another online retailer send the product to them directly, meaning you can buy something online and simply fill in your customer’s name and address. As a vendor, you must be the seller of record to dropship on Amazon.
Q: Which products can I dropship?
A: The best dropshipping products are simple products that are in high demand. By simple, we mean products that are not high maintenance i.e. highly valuable, must be stored under special conditions, too heavy, too fragile, too large. This means that customizable products like t-shirts, quirky office supplies, inexpensive fashion accessories, and giveaway merchandise are often the best choice for first-time dropshippers.
Q: Can I make a lot of money from dropshipping?
A: Dropshipping can be a good source of income if you do your homework, meaning sufficient market research to identify the right product, the right supplier, and the right shipping services to deliver your goods. You should be aware that dropshipping isn’t a get-rich-quick scheme, at least not anymore. Dropshipping has become highly competitive, often with razor-thin margins and challenging supply chain management issues that’ll make you wish you were still working a 9-to-5. It is still possible to be successful at dropshipping, however, as long as you’re willing to dig in for the long haul. In time, once you’ve gathered enough experience dealing with suppliers and other logistical issues, you may find it more profitable, and fulfilling, to start your own DTC brand and sell your own products!