Many aspiring ecommerce business owners wonder if dropshipping is a legal practice. That’s because it almost looks too good to be true.
Earning money from reselling a product that you don’t own is an entirely legal practice and an established business model. There are some illegal pitfalls that you need to be careful about.
That’s exactly what we will discuss in this article: how to run a dropshipping business legally, as well as different requirements you must meet and practices you should avoid in order to not fall into the illegal side of the industry.
Is Dropshipping Legal?
Don’t worry too much: dropshipping is completely legal. In fact, it’s a business model that a ton of companies use, as both retail and ecommerce shops engage in the practice. If you take a second to think about it, dropshipping is simply a fulfillment method. Your company has the task to take orders from customers, while the supplier has the responsibility to ship the products to them. That is why plenty of owners prefer this method – it’s quicker, cheaper, and a lot less risky.
With that said, you may still be wondering whether dropshipping is legal on marketplaces such as eBay, Amazon or Facebook, and the answer remains yes. What’s more, some selling platforms such as Shopify and Wix not only support dropshipping but also encourage it. Shopify even owns Oberlo, a separate platform that helps dropshippers find products.
Along with that, eBay encourages its sellers to do dropshipping via wholesale suppliers and officially bans it from retail marketplaces such as Amazon. However, many continue to do it without facing issues.
Having said all that, dropshipping can become illegal if done incorrectly. For example, you don’t have the right to sell trademarked or copyrighted products. But that’s not the only way it can become illegal. Let’s cover all of it below.
What Products Can You Legally Dropship?
The thing is, you can’t just sell whatever you want in a dropshipping store. There are four things you need to consider before choosing a product in order to remain in the safe zone:
- Stay away from copyrighted products.
- Don’t sell products that are age-restricted or forbidden.
- Try not to list dangerous items.
- Don’t sell special categories of products such as medicine and supplements.
Let’s take a look at each element and explore it in more detail.
A lot of dropshippers make the mistake of selling copyrighted products. The rule you have to follow is that you should refrain from listing a product that’s protected by copyright. That means items from popular brands like Nike and Adidas, as well as some from lesser-known brands.
The best place to look for a list of sellers whose products you cannot sell without permission is eBay VeRO. It contains detailed information on how each company enforces its copyright violations as well. We probably don’t need to mention that companies don’t care about where the violation occurs. It doesn’t matter if you’re selling their product on Shopify, Wix, or Amazon. That is why you need to check all the items you list prior to doing so – that’s the best way to avoid copyright infringement.
Age Restricted or Forbidden Products
Coming up next on the list of things you should avoid selling are age-restricted and forbidden products. While it’s true that most people realize dropshipping can’t be legal if they sell items that are prohibited by the law, if you accidentally make a mistake, it can have more severe consequences than copyright violations.
Most countries, as well as all in big markets like the US and Europe, have strict regulations and laws that safeguard the selling of age-restricted products to minors. For example, according to US law, if you sell alcohol or tobacco to a minor, you can get charged with a misdemeanor leading to a possible charge and a hefty fine, and that’s without considering how complicated it is to sell the same products to adults.
Most states require tobacco sellers to have a license. If you want to do it online as a form of dropshipping, it’s hard to tell whether it’s legal or not, and so it’s advisable that you consult with an attorney as you consider the idea.
Along with tobacco and alcohol, some countries ban the sale of sex toys or any adult-themed products, which means that you shouldn’t do it without having done some research on the place where you plan on selling. Furthermore, most advertising platforms have a policy against advertising adult-related content, making it hard to market your business. That’s why it’s best to refrain from selling any products that fall under the age-restricted or forbidden category.
Is dropshipping legal? Yes. Is dropshipping firearms, ammo, and other dangerous weapons legal? Probably not.
Weapons and ammo are an extremely risky category, and so it’s advisable for you not even to consider starting that kind of a dropshipping business. The laws regarding the ownership of weapons vary from state to state and from country to country, and the penalties for violating those laws are often severe. One wrong move, and you can even become criminally liable. That is why you should avoid this category of products like the plague.
Medical Supplies and Dietary Supplements
On a similar note, selling medical products and dietary supplements is also not a smart move. There are special laws that govern both the sale and the marketing of such products and so it can be very easy to step over the line. Additionally, there are some medical products that require a specific license in order to be sold.
You shouldn’t spend time worrying whether dropshipping is legal. It 100% is. The one thing you should consider, though, is the type of products that you sell in your online store. Hopefully, the advice given in this article will help you make the right choices, and if you need any more dropshipping advice, head over to the Camberlion blog, where you will find more articles.