Is Dropshipping Legal And How to become a dropshipper?

Recently, the dropshipping model is popular but Is dropshipping legal? Actually, dropshipping model has emerged as a new breeze in the “make money online” world and is expected to be a new business trend in the digital age!

Dropshipping is a topic that has never stopped being “hot” in the 4.0 technology era. If you are asking ” Is dropshipping perfectly Legal, ” ” How to become a dropshipper quick,” and “Who can start a dropshipping business?” you’ll find here all the answers.

How to become a dropshipper? 

Dropshipping means “selling without thinking about shipping.” This is a form of business model where you are a retailer but do not have goods in your warehouse. 

When a customer buys, you will go to your supplier to purchase goods and ask the manufacturer to ship the goods to the customer. At this point, what you need to do will not be shipping goods to customers but only focusing on marketing the products you want to sell, tracking customer orders, and taking care of customers.

Thus, the profit you achieve is the difference between the price of the product at the supplier and the price you sell to the customer minus shipping costs. The person who controls this process is called the Dropshipper.

The person who controls this process is called the  Dropshipper.

To make it easier to understand, you can imagine it in the following simple way:

You buy ‘the product you want to sell’ at a low price and sell it at a higher price to the customer. At this point, your profit is the difference between the two prices mentioned above. However, depending on the product type and other subjective factors, this difference is large or small.

It is normal for your profit to reach several hundred percent when you are skilled at finding cheap suppliers and choosing profitable products. Normally, the average profit level for dropshipping businesses fluctuates between 30-60%. 

✅See also: How to Promote Affiliate Offers: 20 Ways to make money with Affiliate Offers

General legalities of dropshipping

As said before, dropshipping is legal. However, there are some legalities related to your e-commerce store.

1. Do you need a business license?

First of all, dropshipping is a legitimate online business, but it doesn’t require any business license to start it. Most dropshippers/sellers don’t get any business license, especially among beginner merchants.
However, not needing a business license doesn’t mean that you should not do it. Actually, such a license has many advantages like taking you more seriously in the e-commerce environment.

2. What about your liability?

You’ll look more liable dropshipper with a business license and product liability insurance especially if you faced any problem as an e-commerce store owner. After all, US customers, for example, file lawsuits if they are not satisfied with a product.
In general, it is good for protecting yourself from unexpected issues.

3. How to avoid financial risks if you’re sued?

To avoid financial risks if you’re sued, take these precautions:
Cover legal costs by getting a business license.
Cover any cost of compensation claims by getting a liability insurance.

4. Do you need to pay taxes?

Each state has its own rules when it comes to taxes. Consult a lawyer or accountant from your account taxation.

How to Build Trust in a Dropshipping Store?

Creating a dropshipping store is easy. However, there are some tips to make it look more legtimate. These are not a must, but they with help your store looks trustworthy:

1. Refund policy

Having a refund policy – return policy on your store is not required by laws, but it helps you build a trust relationship with your customers.

2. Terms and Conditions

Having a terms and conditions page on your store that lists rights and responsibilities of your business and your customers is very helpful. It is not from the requirements for running dropshipping stores, but it makes a difference.

3- Privacy Policy

Again, publishing a privacy policy for global on your store that simply explains the policies how your business collects your customer’s data, uses, discloses, and protects them.

What are risks in dropshipping?

We’ve discussed the legalities of dropshipping. Now, let’s check the general risks which dropshippers/sellers may face:

1. Suppliers may scam you

Your dropshipping success depends on your suppliers in the first place. That’s why you should find trustworthy suppliers to deal with them.
Stay away from suppliers with complicated return process, delayed shipping times, inflated prices, defective product quality, etc.
The main signs of a fishy dropshipping supplier:
⏩Having a low-quality website: spammy website,
⏩ Selling to the public at a “wholesale” price
⏩Refusing to sign an agreement or contract

2. No control over the supply chain

Although not having to manage and the inventory is an advantage as the supplier handles it, it can be a risk if you are selling a product which is out of stock and the supplier didn’t tell you yet.

3. Low profit margins

The competition in dropshipping is considered high, so many dropshippers are selling similar or even same trending products. To face this competition, your prices should be pretty low and so your profits will.

You’ll gain more profits after days or months when your store become branded with a trademark.

4. Easy to get banned on largest marketplaces

Even the biggest marketplaces like Amazon and eBay can ban you any minute if you don’t follow their strict rules

5. You need a solid marketing strategy

You need a solid marketing strategy and a budget to make money from dropshipping especially as a beginner.’

6. Customer support may become too much

In your dropshipping business, you are the salesperson, the web designer, the marketer, the social media manager, and the whole customer support team which may be tough sometimes.

Is Dropshipping easy?

Yes, dropshippping is legal worldwide, easy and allowed for everyone. Actually, there is no reason to be illegal. The dropshipping method is similar to other ecommerce methods. People are tending to start to dropship business for several reasons like:

Ease of implementation

The operation of the dropshipping model is only encapsulated in 3 main activities, including:

• Search providers;
• Website construction;
• Perform related tasks to sell goods.

Low investment capital

When implementing the dropshipping model and creating dropshipping businesses, you must pay the main costs of website building fees and marketing costs (advertising) to sell products. In addition, the costs of operating retail operations, warehousing for inventory management, or inventory costs are not your problem.

Low level of risk

The fact that you do not have to keep inventory in stock will be a great advantage for you in reducing risk in the form of traditional sales. If you don’t sell the product, you still don’t have to pay the inventory control cost. If you want to change business items or even stop selling, you are not heavy on capital loss due to the high inventory of products.

You can sell goods anywhere: The advantage of selling online is that you can sell goods anywhere, to anyone, even though you are not near the customer’s location. Thus, they want to sell goods abroad is not difficult and still a legal business. In addition, we do not need a fixed office, warehouse, or staff.

Diversity of products for you to choose from: You can completely learn and experience sales with any item you desire. Moreover, you can also become a place to buy wholesale with a wide range of products at different prices. Or if you do retail on the website, the variety of products also stimulates the ability of customers to buy because they now have more choices.

For example:

• Supply sells that product in the Vietnamese market. If you want to trade that product in Vietnam, you must apply to be a collaborator or franchise agent to do business to get a wholesale price with a high discount. This costs you capital to negotiate because most want to be a wholesale agent or collaborator, and you have to spend an initial investment;
• However, with Dropshipping, it is good that you can still take retail prices and take them one by one to sell to customers at a high price. To do that, you must choose another market. The market does not provide this product, or this product in that market is too expensive to jump in.

The tip for you is to negotiate with suppliers from this country and sell to customer markets in other countries. That’s how Dropshipping exists. It exists based on exchange rate differences, geographical differences, and regional differences between cities and the countryside.

✅See also: What is DropShipping Business and How Does It Work?

How can I legally drop ship?

Yes, dropshipping is legal but how? Here are the most important guidelines to ensure your dropshipping business is legal( Notice that not all countries ask for the same things):

1. Pay Your Taxes if your country asks for taxes on people working online.
2. Get Business Insurance if needed.
3. Don’t Infringe Copyrights. Create your own content, images and videos without copying them from other sources.
4. Build your brand with your logo and your personal data.
5. Don’t spam. Promote useful products from their original suppliers. 
6. Pick Good Suppliers like AliExpress, Amazon and more.

Is dropshipping legal:  Requirements for a successful dropshipping experience?

These are the advantages and legal requirements accumulated after the hard work with Amazon’s system, hoping to help you “wet feet dry” into the Dropshipping model:

1. No need for too much capital to get started. Less than 50$ to be deposited into the visa card to start the cross-border dropshipping journey with Amazon.

2. Do not hold inventory, do not need self-produced products, can take other people’s products to trade;

3. Skip shipping, only order from the source site, and the supply or distributor is the one to deliver the order to your customer;

4. Really, you need to know basic English, or if you’re good at English, it’s also an advantage for you to practice reading more knowledge in foreign forums. And Amazon’s Dropshipping job is to copy and paste from the source page selectively.

The same is applied to Ebay

Is dropshipping legal: Who can Start a DropShipping Business?

To this question, the answer will be perfectly subjective. However, it can be said that “anyone can fit.” The important thing is whether you want to try it or not. If unsure, try to consider drop-shipping as a side business to earn extra income.

But I believe that when you get used to everything, you will be committed to this job, and gradually it will become your main job. Besides, it can help you create a source of income that is not only enough but also large to take care of yourself and your family.

If you are in the following group of people, perhaps drop shipping will greatly help your income!!!

Group 1: Office people

The first object is none other than office workers. If you have free time from 2 to 3 hours a day, don’t waste it anymore. Take this time to understand this business and earn a new income stream with Dropshipping.

If you later feel that Dropshipping is probably your destination, don’t hesitate to spend a little more time and effort on it. Then your income will probably reach $200-$300 a month. At this point, perhaps your life will become much easier.

Group 2: Students

This group has a great advantage not only in terms of time but also the ability to quickly adapt to operating rules as well as advances in digital technology. Moreover, if you need market and product research, this is probably an absolutely great opportunity to experience and gain practical knowledge.

Are you worried that you have no capital? Then don’t worry anymore. Try it now because this model is suitable for those with low or almost zero initial capital. What you need to spend now is not money but time, knowledge, and experience. You will not go wrong when deciding to spend time watching movies or playing games for Dropshipping. Not only will you learn more things, but you will also experience the feeling of “financial freedom” and reduce the burden on your family.

Group 3: Beginners who are just entering the online business.

It is obvious to newcomers that you have no experience with the real environment. Online business not only requires marketing knowledge, but you also need skills in market analysis, product sourcing, freight, etc., and a lot of practical experience.

But rest assured, Dropshipping will be a tool for you to learn and experience at the lowest risk in the online business market. Later, when you are confident enough, set your plan and enter more complex markets will not be difficult for you.

Now, you got the answer for your question “Is dropshipping completely legal and legitimate,” and you can become a dropshipper today to make money online with dropshipping. dropshipping is worth the effort. Actually, you will admit that dropshipping worth all the spent time.

✅See also: How to Start a Dropshipping Business in 6 Simple Steps?