{"id":183133,"date":"2023-09-22T09:08:44","date_gmt":"2023-09-22T08:08:44","guid":{"rendered":"https:\/\/legalvision.co.uk\/?p=183133"},"modified":"2024-11-07T22:45:36","modified_gmt":"2024-11-07T22:45:36","slug":"dropshipping-business","status":"publish","type":"post","link":"https:\/\/legalvision.co.uk\/ecommerce-online-business\/dropshipping-business\/","title":{"rendered":"How to Dropship and Avoid Legal Issues"},"content":{"rendered":"\n<p>As an online business, you must comply with the law and avoid unintentionally breaching the law when running your online store. One type of online business model for an online retailer is a dropshipping model. A dropshipping business model means you work as a seller with a third-party supplier to fulfil your customer&#8217;s orders. A dropshipping store is a good way for business owners to make money fairly quickly and presents an accessible way to get into the eCommerce industry. However, many dropshipping businesses face legal issues regarding product quality and sales tax. There are perhaps areas of the law in terms of your customers&#8217; orders that you may not realise you must comply with for a dropshipping business model, so you should take legal advice from legal professionals. This article will explain how to avoid legal issues when dropshipping with your eCommerce business dropshipping store in the UK.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Dropshipping<\/h2>\n\n\n\n<p><a href=\"https:\/\/legalvision.co.uk\/ecommerce-online-business\/dropshipping-legal-considerations\/\">Dropshipping is a popular model for an eCommerce business<\/a>. It allows the eCommerce business to outsource processing, procuring, storing, and shipping their products to a supplier. In reality, this may look as follows:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li>your eCommerce business advertises the product for sale on your website at \u00a320;<\/li>\n\n\n\n<li>a customer views and purchases this from your website for \u00a320;<\/li>\n\n\n\n<li>you then purchase the product from a third party for \u00a315. This is from another eCommerce business supplier, which results in a \u00a35 profit for your business.\u00a0<\/li>\n\n\n\n<li>the third-party supplier ships the product to your customer.\u00a0<\/li>\n<\/ol>\n\n\n\n<h2 class=\"wp-block-heading\">Legal Issues&nbsp;<\/h2>\n\n\n\n<p>Like any other eCommerce business, dropshipping needs to comply with the law. Let us explore <a href=\"https:\/\/legalvision.co.uk\/ecommerce-online-business\/five-common-legal-issues-facing-uk-ecommerce-businesses\/\">some legal issues<\/a> you can avoid with a dropship business.\u00a0<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Poor Quality&nbsp;<\/h3>\n\n\n\n<p>Despite the product purchased through dropshipping not coming directly from your business, you are still responsible for the quality of the product. In other words, if the product is faulty, your customer can rightly pursue your business customer services for a resolution.&nbsp;<\/p>\n\n\n\n<div  class=\"box box--icon box--idea\">\n    <p>A way to avoid legal issues around the poor quality of a dropshipped product is to choose your type of product wisely. Accordingly, you must consider its suitability for transportation. So, you may want to avoid dropshipping fragile products. This is because you have no legal control over shipping the product.<\/p>\n<\/div>\n\n\n\n<p>Another way to avoid the legal issue of poor quality products is to conduct due diligence when selecting a supplier. Accordingly, factor in the following considerations when vetting suppliers:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>whether their products are legal;<\/li>\n\n\n\n<li>their history; and<\/li>\n\n\n\n<li>their reputation.<\/li>\n<\/ul>\n\n\n\n<p>It is also a good idea to monitor your suppliers continuously to ensure that there are no issues with their business, which could result in legal matters you could avoid.&nbsp;<\/p>\n\n\n    <div class=\"my-7 lg:my-10 border-y-2 border-gray-100 py-7 lg:py-10 flex flex-col sm:flex-row items-start gap-10\">\n                    <img decoding=\"async\" class=\"w-52 mx-auto my-0! rounded\" src=\"https:\/\/img.legalvision.com.au\/wp-content\/uploads\/sites\/4\/2022\/07\/29111635\/start-online-business-uk-560x792-1.jpg\" alt=\"Front page of publication\"\n                 loading=\"lazy\" width=\"208\" height=\"298\">\n                <section>\n            <div class=\"text-2xl font-bold\">How to Start an Online Business in the UK<\/div>\n            <div class=\"body-text\">\n                <p>Starting an online business in the UK is complex. This free guide helps you navigate the legal steps with confidence.<\/p>\n            <\/div>\n            \n\n<a href=\"https:\/\/go.legalvision.co.uk\/uk-online-business-guide.html\" class=\" block px-5 py-3.5 max-w-fit bg-orange button__hover transition rounded text-white font-bold text-lg no-underline uppercase leading-tight text-center\" target=\"\" rel=\"\">Download Now<\/a>        <\/section>\n    <\/div>\n\n\n\n\n<h3 class=\"wp-block-heading\">Tax<\/h3>\n\n\n\n<p>You must avoid any legal issues concerning tax when engaging in a dropshipping business. As with other eCommerce businesses, tax is still due when you sell your products. You are liable for:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>income tax;<\/li>\n\n\n\n<li>customs duty for goods you purchase outside the UK entering the UK; and<\/li>\n\n\n\n<li>value added tax (VAT).<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Legal Liability<\/h3>\n\n\n\n<p>As dropshipping means buying products from others to send to your customers, you must try to steer clear of issues concerning legal liability. This is an area which can be unclear in many circumstances. A way to avoid legal liability issues is to take legal advice. A lawyer can draft legal agreements between you and your suppliers. These should detail who has legal liability for:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>the sales process;<\/li>\n\n\n\n<li>the shipping process; and<\/li>\n\n\n\n<li>throughout the customer&#8217;s usage of the product.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Advertising&nbsp;<\/h3>\n\n\n\n<p>An important legal issue to avoid when dropshipping is <a href=\"https:\/\/legalvision.co.uk\/ecommerce-online-business\/faking-online-reviews\/\">false advertising<\/a>. The business model your eCommerce store adopts is to advertise the product on your website and to purchase it elsewhere. You, therefore, need to ensure you comply with advertising laws. This means you must:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>be honest with your advertising;<\/li>\n\n\n\n<li>comply with advertising standards; and<\/li>\n\n\n\n<li>follow social media platform rules.<\/li>\n<\/ul>\n\n\n\n\n<a href=\"#content-next\"\n   class=\"block p-4 mt-10 text-xl font-bold text-center text-white no-underline bg-gray-800 rounded-t-xl\">\n    Continue reading this article below the form\n    <i class=\"text-xl fa-regular fa-arrow-down\"><\/i>\n<\/a>\n<div class=\"px-6 pt-10 pb-12 mb-10 text-center bg-gray-100 rounded-b-xl sm:px-12 test\">\n    <div class=\"mb-8 text-2xl font-bold text-orange\">\n        Need legal advice?\n        <br>\n        <span class=\"text-lg not-prose\">\n                            Call <a href=\"tel:+448081968584\" class=\"not-prose\">0808 196 8584<\/a> for urgent assistance.\n                <br>\n                Otherwise, complete this form, and we will contact you within one business day.\n                    <\/span>\n    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Dropshipping eCommerce businesses are legal but also must comply with the law. This article has presented some legal matters you can avoid with a dropshipping business. It explains avoiding issues with poor quality products and that you must pay income tax, VAT and customs duties to avoid the legal problems associated with not doing so. The article also explains the importance of complying with advertising laws and avoiding issues regarding legal liability.&nbsp;<\/p>\n\n\n\n<p>If you need help understanding how to dropship and avoid legal issues, our experienced <a href=\"https:\/\/legalvision.co.uk\/ecommerce-lawyers-lp\/\">eCommerce lawyers<\/a> can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents for a low monthly fee. So call us today on <a href=\"tel:+448081968584\" class=\"AVANSERnumber dynamic-number\">0808 196 8584<\/a> or visit our <a href=\"https:\/\/legalvision.co.uk\/membership\">membership page<\/a>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Frequently Asked Questions<\/h2>\n\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1731019430782\"><strong class=\"schema-faq-question\"><strong>Is dropshipping legal?<\/strong><\/strong> <p class=\"schema-faq-answer\">Yes, dropshipping businesses are legal. However, you need to note various compliance risks before launching this type of business.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1731019441966\"><strong class=\"schema-faq-question\"><strong>Is dropshipping profitable in the UK?<\/strong><\/strong> <p class=\"schema-faq-answer\">Yes, many dropshipping businesses are profitable in the UK. There is no need to invest in profit developments and the main costs involve sampling products that already exist. It is, however, essential to choose the right items to dropship.<\/p> <\/div> <\/div>\n<div class=\"not-prose m-feedback-prompt\">\n    <!-- Thumbs up\/down bar -->\n    <div class=\"m-feedback-prompt__main\">\n        <div class=\"m-feedback-prompt__title\">Was this article helpful?<\/div>\n        <div>\n            <!--span class=\"m-feedback-prompt__button--text\">Thanks!<\/span-->\n            <button type=\"button\" class=\"m-feedback-prompt__button m-feedback-prompt__button--yes\"\n                    data-analytics-link=\"feedback-prompt:yes\" aria-label=\"Agree\">\n                <i class=\"fa-regular fa-thumbs-up fa-3x\"><\/i>\n            <\/button>\n            <button type=\"button\" class=\"m-feedback-prompt__button m-feedback-prompt__button--no\"\n                    data-analytics-link=\"feedback-prompt:no\" aria-label=\"Disagree\">\n                <i class=\"fa-regular fa-thumbs-down fa-3x\"><\/i>\n            <\/button>\n        <\/div>\n    <\/div>\n\n    <!-- Feedback form -->\n    <div class=\"m-feedback-prompt__form\">\n        <div class=\"m-feedback-prompt__form--thanks \">\n            <div>Thanks!<\/div>\n            <p>\n                We appreciate your feedback \u2013 your submission has been successfully received.            <\/p>\n        <\/div>\n        <form id=\"contact-form\" class=\"m-feedback-prompt__form--form\" action=\"\" method=\"post\">\n            <input type=\"hidden\" id=\"authenticity_token\" name=\"authenticity_token\" value=\"9eb4f72322\" \/><input type=\"hidden\" name=\"_wp_http_referer\" value=\"\/api\/wp\/v2\/posts\/183133\" \/>            <input value=\"https:\/\/legalvision.co.uk\/ecommerce-online-business\/dropshipping-business\/\" type=\"hidden\" name=\"currenturl\"\n                   id=\"currenturl\">\n            <input value=\"How to Dropship and Avoid Legal Issues\" type=\"hidden\" name=\"currenttitle\"\n                   id=\"currenttitle\">\n            <label>\n                <!-- display on thumbs-up -->\n                <span class=\"m-feedback-prompt__feedback m-feedback-prompt__feedback--yes\">\n                    Can you tell us <span class=\"font-semibold\">why<\/span> you found it helpful?\n                <\/span>\n\n                <!-- display on thumbs-down -->\n                <span class=\"m-feedback-prompt__feedback m-feedback-prompt__feedback--no text-lg\">\n                    How can we better improve this article?\n                <\/span>\n                <textarea name=\"feedbackmessage\" id=\"feedbackmessage\" required><\/textarea>\n            <\/label>\n\n            <div class=\"m-feedback-prompt__form--error\" id=\"form-submit-error\"><\/div>\n            <button id=\"submit-contact-form-button\" type=\"submit\" name=\"commit\" class=\"m-feedback-prompt__form--submit\"\n                    data-analytics-link=\"feedback-prompt:submit\">\n                Submit            <\/button>\n        <\/form>\n    <\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>As an online business, you must comply with the law and avoid unintentionally breaching the law when running your online store. One type of online business model for an online retailer is a dropshipping model. A dropshipping business model means you work as a seller with a third-party supplier to fulfil your customer&#8217;s orders. A<a href=\"https:\/\/legalvision.co.uk\/ecommerce-online-business\/dropshipping-business\/\">Continue reading <span class=\"sr-only\">&#8220;How to Dropship and Avoid Legal Issues&#8221;<\/span><\/a><\/p>\n","protected":false},"author":13326,"featured_media":3235,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_relevanssi_hide_post":"","_relevanssi_hide_content":"","_relevanssi_pin_for_all":"","_relevanssi_pin_keywords":"","_relevanssi_unpin_keywords":"","_relevanssi_related_keywords":"","_relevanssi_related_include_ids":"","_relevanssi_related_exclude_ids":"","_relevanssi_related_no_append":"","_relevanssi_related_not_related":"","_relevanssi_related_posts":"171888,173784,1702,176414,2052,173835","_relevanssi_noindex_reason":"","editor_notices":[],"footnotes":""},"categories":[34],"tags":[20,21,379,639],"class_list":["post-183133","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-ecommerce-online-business","tag-small-business","tag-medium-business","tag-ecommerce","tag-dropshipping"],"acf":[],"yoast_head":"<!-- This site is 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Prior to her freelance writing work, Clare worked for UK central government in policy and communication roles. She has also run her own businesses where she founded a magazine and was editor-in-chief. She is currently studying part-time towards a PhD predominantly in international public law. Qualifications: PhD, Human Rights Law (underway), University of Bedfordshire, Post graduate diploma, Law, Middlesex University.","sameAs":["https:\/\/www.linkedin.com\/in\/ms-clare-susannah-f-4a243545\/"],"url":"https:\/\/legalvision.co.uk\/author\/clarefarmer\/"},{"@type":"Question","@id":"https:\/\/legalvision.co.uk\/ecommerce-online-business\/dropshipping-business\/#faq-question-1731019430782","name":"Is dropshipping legal?","acceptedAnswer":{"@type":"Answer","text":"Yes, dropshipping businesses are legal. However, you need to note various compliance risks before launching this type of business.","inLanguage":"en-GB"},"inLanguage":"en-GB"},{"@type":"Question","@id":"https:\/\/legalvision.co.uk\/ecommerce-online-business\/dropshipping-business\/#faq-question-1731019441966","name":"Is dropshipping profitable in the UK?","acceptedAnswer":{"@type":"Answer","text":"Yes, many dropshipping businesses are profitable in the UK. There is no need to invest in profit developments and the main costs involve sampling products that already exist. It is, however, essential to choose the right items to dropship.","inLanguage":"en-GB"},"inLanguage":"en-GB"}]}},"_links":{"self":[{"href":"https:\/\/legalvision.co.uk\/api\/wp\/v2\/posts\/183133","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/legalvision.co.uk\/api\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/legalvision.co.uk\/api\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/legalvision.co.uk\/api\/wp\/v2\/users\/13326"}],"replies":[{"embeddable":true,"href":"https:\/\/legalvision.co.uk\/api\/wp\/v2\/comments?post=183133"}],"version-history":[{"count":6,"href":"https:\/\/legalvision.co.uk\/api\/wp\/v2\/posts\/183133\/revisions"}],"predecessor-version":[{"id":191241,"href":"https:\/\/legalvision.co.uk\/api\/wp\/v2\/posts\/183133\/revisions\/191241"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/legalvision.co.uk\/api\/wp\/v2\/media\/3235"}],"wp:attachment":[{"href":"https:\/\/legalvision.co.uk\/api\/wp\/v2\/media?parent=183133"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/legalvision.co.uk\/api\/wp\/v2\/categories?post=183133"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/legalvision.co.uk\/api\/wp\/v2\/tags?post=183133"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}