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How to Avoid Being Sued in Dropshipping

By Shaheryar

How to Avoid Being Sued in Dropshipping
Many people, particularly young entrepreneurs, come up with different business ideas and try to sell that idea and have their startup. Dropshipping is a recent trend in the market that is an order fulfillment method where a seller takes orders from customers and passes them onto a third party, who supplies the orders to the customers.

Dropshipping is a method used by many global retailers and investors who start a store selling different products and services and then outsource the orders from different sellers. Now, in theory, this seems like a good investment, but every business has its pros and cons.

It's essential to make sure your startup is lawful and how you can avoid being sued if you're in the dropshipping business. Here are a few tips.


1. Get a Business License

Getting a proper business license should be the first step to making your entire work legal. Technically, a business license is not essentially required when you're in the dropshipping field, but it is never a bad idea to be on the safe side.

A business license will save you any future troubles from being sued and make your business more legitimate. You can lessen the risk of any personal liability by having a proper license because when you sell products through a third party, your customers are going to blame your platform for any potential damages or losses.

In dropshipping, both you and the seller must have a business license, so you can develop a relationship with the retailer and grow the business as a team. On the other hand, if you're starting new and need sellers on board, you have to come off as a trusted partner yourself. 

So, getting a business license will help both your business and the outsourced warehousing business in the end because you can avoid a lot of lawsuits by having a strong and legitimate backbone of your business.


2. Rely on Trusted Manufacturers

In dropshipping, you don't get to keep your products in stock as you outsource them using a seller. Your customers come to your store or online platform and place an order, and you contact your manufacturers or seller, who directly ships the products to your customers. Trust is an important key factor in this exchange.

Since you are offering the products and services, the customers will come to you with any complaints about the product or any questions about the service. It's important that you only go into business with trusted manufacturers and sellers.  If there's ever a problem, you can count on trustworthy business partners to help you get it sorted as quickly as possible.

In the business market, your reputation is the most important thing as it attracts more customers, so make sure you have trusted and reliable sellers to avoid any problems. For example, if you have a Muslim Pro app that tells consumers prayer times and provides Islamic knowledge, you must get a trusted web designer that understands the target audience and designs the app appropriately. 


3. Use Your Own Product Images

One of the most common lawsuits involves getting sued for copyrights. Every business has to follow copyright laws and the most important way to avoid getting sued is to use your own product pictures and descriptions.

Most drop shipping businesses use copyright images as they are not selling the actual products and have never seen them. So, to avoid any issues, you can't copy or steal a manufacturer's product and use the images to sell it as your own. 

Product images fall under the intellectual property category, so the owner can easily sue you if you use their work without their permission. You can take your own product pictures and verify each product, or you can ask your seller to provide you with licensed images that you can use.

Make sure to verify each and every image used on your website and keep a record of everything that has been documented and proof of your product provider giving you access to use their images.


4. Have Insurance

In every business, you have to be prepared for the unexpected, so to be on the safe side, and make sure you have insurance. Product liability insurance is very important, as one day, you will end up selling a damaged product or has defects.

Product liability insurance will make you have peace of mind because you are part of a distribution chain in dropping shipping, so if there are any problems, there will be potential lawsuits. Liability insurance will cover your expenses of an attorney and provide your business with protection as well.


5. Verify Each Sale

One of the cons of a dropshipping is business is that there is no quality control. It is a highly profitable ecommerce business, but since you're just fulfilling every order you get by outsourcing the products, there is no trust and quality assurance.

Most people have different sellers and manufacturers with different qualities for every product, and you can't promise your customers a genuine, trusted product every time. To build a reliable business, you must verify each and every sale.

Overlook and supervise every order your seller ships outs and make sure your customers receive their money's worth. This will save you many lawsuits as most people tend to sue in case of defective products and demand reparation for the damages done.


Takeaway – Avoid Lawsuits

Every business owner is worried about stepping into the market and making sure they are doing everything right by the book. The only way to avoid getting sued is to make sure you have a legitimate chain of work and reliable partners. 

Keeping a record of every contract and deal made is another way to back and support your business by providing proof and documentation with all the essential details.

In the end, dropshipping is just a fulfillment method, so make sure you fulfill all the copyright infringement laws and act as a trusted and legal middle ground between the retailers and the buyers. 


About the author

Shaheryar provides ghostwriting and copywriting services. His educational background in the technical field and business studies helps him in tackling topics ranging from career and business productivity to web development and digital marketing. He occasionally writes articles for Carpet Cleaning London.