{"id":10056,"date":"2024-10-08T07:25:31","date_gmt":"2024-10-08T07:25:31","guid":{"rendered":"https:\/\/appscenic.com\/?p=10056"},"modified":"2024-10-09T10:57:53","modified_gmt":"2024-10-09T10:57:53","slug":"is-dropshipping-legal-what-are-the-risks-of-dropshipping","status":"publish","type":"post","link":"https:\/\/appscenic.com\/blog\/is-dropshipping-legal-what-are-the-risks-of-dropshipping\/","title":{"rendered":"Is Dropshipping Legal? The Risks You Need to Know and Where It&#8217;s Illegal"},"content":{"rendered":"<p>First, we want to clearly specify the following:<\/p>\n<p><em><span style=\"font-weight: 400;\">We are not legal professionals and so all this is not actual legal advice. If you want legal advice, we recommend finding an attorney specialized in this type of work. This article is about our personal experience and recommendations on how to start and build successful dropshipping stores.<\/span><\/em><\/p>\n<p><span style=\"font-weight: 400;\">Now, before actually opening a dropshipping business, you need to research all about it, from &#8220;what is dropshipping&#8221; to &#8220;is dropshipping legal&#8221; and &#8220;what are the risks behind it&#8221;.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Below, we will discuss the part about how legal it is to dropship and what are the actual risks of dropshipping. This is a long article so we hope you read it until the end as it has a lot of useful information for both beginners and experienced dropshippers.\u00a0<\/span><\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_76 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69e7ab39b74b1\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69e7ab39b74b1\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/appscenic.com\/blog\/is-dropshipping-legal-what-are-the-risks-of-dropshipping\/#So_is_dropshipping_legal\" >So, is dropshipping legal?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/appscenic.com\/blog\/is-dropshipping-legal-what-are-the-risks-of-dropshipping\/#When_dropshipping_becomes_illegal\" >When dropshipping becomes illegal?<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/appscenic.com\/blog\/is-dropshipping-legal-what-are-the-risks-of-dropshipping\/#Selling_counterfeits_replicas_and_knockoffs\" >Selling counterfeits, replicas, and knockoffs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/appscenic.com\/blog\/is-dropshipping-legal-what-are-the-risks-of-dropshipping\/#Dropshipping_restricted_and_prohibited_products\" >Dropshipping restricted and prohibited products<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/appscenic.com\/blog\/is-dropshipping-legal-what-are-the-risks-of-dropshipping\/#Infringing_on_Intellectual_Property_Rights\" >Infringing on Intellectual Property Rights<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/appscenic.com\/blog\/is-dropshipping-legal-what-are-the-risks-of-dropshipping\/#Misleading_advertising_and_false_claims\" >Misleading advertising and false claims<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/appscenic.com\/blog\/is-dropshipping-legal-what-are-the-risks-of-dropshipping\/#Violating_consumer_protection_laws\" >Violating consumer protection laws<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/appscenic.com\/blog\/is-dropshipping-legal-what-are-the-risks-of-dropshipping\/#Where_is_dropshipping_illegal\" >Where is dropshipping illegal?<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/appscenic.com\/blog\/is-dropshipping-legal-what-are-the-risks-of-dropshipping\/#1_India\" >1. India<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/appscenic.com\/blog\/is-dropshipping-legal-what-are-the-risks-of-dropshipping\/#2_North_Korea_and_Cuba\" >2. North Korea and Cuba<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/appscenic.com\/blog\/is-dropshipping-legal-what-are-the-risks-of-dropshipping\/#3_Countries_with_high_import_taxes\" >3. Countries with high import taxes<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/appscenic.com\/blog\/is-dropshipping-legal-what-are-the-risks-of-dropshipping\/#4_European_Union_EU\" >4. European Union (EU)<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/appscenic.com\/blog\/is-dropshipping-legal-what-are-the-risks-of-dropshipping\/#Dropshipping_legal_requirements\" >Dropshipping legal requirements<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/appscenic.com\/blog\/is-dropshipping-legal-what-are-the-risks-of-dropshipping\/#Business_License\" >Business License<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/appscenic.com\/blog\/is-dropshipping-legal-what-are-the-risks-of-dropshipping\/#Taxes\" >Taxes<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-16\" href=\"https:\/\/appscenic.com\/blog\/is-dropshipping-legal-what-are-the-risks-of-dropshipping\/#Liability\" >Liability<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-17\" href=\"https:\/\/appscenic.com\/blog\/is-dropshipping-legal-what-are-the-risks-of-dropshipping\/#Legitimacy\" >Legitimacy<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-18\" href=\"https:\/\/appscenic.com\/blog\/is-dropshipping-legal-what-are-the-risks-of-dropshipping\/#Is_dropshipping_legal_in_the_USA\" >Is dropshipping legal in the USA?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-19\" href=\"https:\/\/appscenic.com\/blog\/is-dropshipping-legal-what-are-the-risks-of-dropshipping\/#Is_dropshipping_from_Amazon_legal\" >Is dropshipping from Amazon legal?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-20\" href=\"https:\/\/appscenic.com\/blog\/is-dropshipping-legal-what-are-the-risks-of-dropshipping\/#Is_dropshipping_from_Amazon_to_eBay_legal\" >Is dropshipping from Amazon to eBay legal?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-21\" href=\"https:\/\/appscenic.com\/blog\/is-dropshipping-legal-what-are-the-risks-of-dropshipping\/#Is_dropshipping_from_AliExpress_legal\" >Is dropshipping from AliExpress legal?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-22\" href=\"https:\/\/appscenic.com\/blog\/is-dropshipping-legal-what-are-the-risks-of-dropshipping\/#Is_it_legal_to_dropship_branded_products\" >Is it legal to dropship branded products?<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"So_is_dropshipping_legal\"><\/span><b>So, is dropshipping legal?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Short answer: Yes!<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Now, the long answer is that owning and managing a dropshipping business is completely legal, but sure enough before starting a business like this you actually need to do your homework and find out what are the legal issues behind it, for example the ecommerce laws that apply to a specific location.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">So, be sure to check the specific rules of the country of your choice (or that of your target countries) before starting selling products online. Also, start by checking all the information you have available on common legal concerns and issues that dropshippers can come by.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">But, that\u2019s something we\u2019re going to talk about in the sections below.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"When_dropshipping_becomes_illegal\"><\/span><b>When dropshipping becomes illegal?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Dropshipping can become illegal if certain practices or regulations are violated. Let\u2019s explore scenarios where dropshipping can cross the legal line.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Selling_counterfeits_replicas_and_knockoffs\"><\/span><b>Selling counterfeits, replicas, and knockoffs<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">One of the fastest ways to land in legal trouble is by selling counterfeit products. Counterfeiting involves selling replicas or knock-offs of branded items without permission from the brand owners.\u00a0 An example of counterfeit products are the ones manufactured to look like an original trending product, such as Louis Vuitton bags. In dropshipping, this often happens when sellers source cheap products from unverified suppliers on platforms like AliExpress, without realizing they\u2019re selling counterfeit goods. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">Of course, you are not allowed to do such a thing, as these<\/span><span style=\"font-weight: 400;\">\u00a0products will automatically infringe upon the authentic products\u2019 trademark and artistic copyright. Countries have strict intellectual property laws, and selling fake goods can result in fines, lawsuits, and even jail time. To avoid this, you should always verify your suppliers and ensure they provide legitimate, authentic products. Working with trusted suppliers from platforms like AppScenic that vet their suppliers for legitimacy can help you mitigate these risks.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The fact is that selling counterfeit products is unethical and quite risky, you can either get negative customer reviews or be involved in a lawsuit. In any situation, we think this way of doing business isn\u2019t worth it.\u00a0<\/span><\/p>\n<p><iframe title=\"Counterfeit Goods in Dropshipping: A Cautionary Tale\" width=\"800\" height=\"450\" src=\"https:\/\/www.youtube.com\/embed\/TJ5B5XMlfgs?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Dropshipping_restricted_and_prohibited_products\"><\/span><b>Dropshipping restricted and prohibited products<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Every country has regulations on what products can be sold within its borders. Some goods, such as weapons, pharmaceuticals, or certain tech products, may be banned or require specific licenses to sell. Dropshipping products that fall under these categories without complying with the necessary regulations can land you in serious legal trouble.<\/p>\n<p>For example, certain supplements, health products, or even certain electronics might be legal in one country but banned in another. Before selling a product, ensure it complies with the regulations of the country you\u2019re shipping to. Research the customs, trade laws, and import restrictions for your target market to avoid legal headaches.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Infringing_on_Intellectual_Property_Rights\"><\/span><strong>Infringing on Intellectual Property Rights<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>In addition to selling counterfeit goods, other intellectual property violations include using copyrighted images, logos, or designs without permission. Many new dropshippers unknowingly pull product photos or marketing materials directly from the internet or supplier websites, which could violate intellectual property laws.<\/p>\n<p><span style=\"font-weight: 400;\">Now, we know you may be struggling with what is the difference between trademark and copyright, so below we will start by explaining what each of them means.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">A <strong>trademark<\/strong> can be a symbol, or a word(s) legally registered and used by a company or product. In other words, trademarks protect a brand\u2019s name and the logos used to represent that product and service. Brands that have trademarks are Coca-Cola, Google or Disney, among many others, of course.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">On the other hand, having the <strong>copyright<\/strong> for something means that an entity, be it a company or a person, has the exclusive legal right to print, publish, perform, film, or record literary, artistic, or musical material, and to give others the right to do the same. Mostly, establishing copyrights protects a certain intellectual property, as are original artistic and literary works.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">So, as you can see these two terms are quite similar, but trademarks protect symbols that represent a brand, such as logos, and copyright helps to protect artistic and literary works, such as music and books.<\/span><\/p>\n<p>Always make sure you have permission to use images or content associated with your products. Some dropshipping suppliers will provide authorized images, but it\u2019s always better to create your own or seek licensed material.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Misleading_advertising_and_false_claims\"><\/span><strong>Misleading advertising and false claims<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>False advertising is another common legal issue for dropshippers. Making exaggerated or misleading claims about a product\u2019s quality, performance, or origin can lead to consumer complaints and legal action. This is especially important in industries like health and wellness, where unsubstantiated claims about the efficacy of a product can result in penalties.<\/p>\n<p>To avoid this, be transparent about what your products can and cannot do. Ensure that the product descriptions and marketing messages you use align with the actual benefits and features of the product.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Violating_consumer_protection_laws\"><\/span><strong>Violating consumer protection laws<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Many countries have strict consumer protection laws that safeguard buyers from fraudulent activities. Dropshipping businesses must adhere to these regulations, which typically include offering clear return policies, providing accurate delivery timelines, and resolving customer complaints in a timely manner.<\/p>\n<p>If you fail to provide customers with accurate information about shipping times, product quality, or refund policies, you could be in violation of these laws. Always communicate transparently with your customers and have a clear refund or return policy in place.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Where_is_dropshipping_illegal\"><\/span>Where is dropshipping illegal?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>While dropshipping is legal in most countries, certain regions impose stricter regulations or outright bans on specific practices associated with dropshipping. Here are some examples:<\/p>\n<h4><span class=\"ez-toc-section\" id=\"1_India\"><\/span>1. <strong>India<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>India has stringent regulations when it comes to ecommerce, especially regarding international sellers. India\u2019s foreign trade laws impose various restrictions on importing products into the country. While dropshipping itself is not banned, you need to navigate complex customs and tax laws if you plan to sell to Indian customers. Many suppliers avoid shipping to India due to these complexities, so it\u2019s essential to check import laws before targeting this market.<\/p>\n<h4><span class=\"ez-toc-section\" id=\"2_North_Korea_and_Cuba\"><\/span>2. <strong>North Korea and Cuba<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>Due to international sanctions and trade restrictions, selling goods to countries like North Korea and Cuba is illegal for most businesses. These countries are subject to strict global trade embargoes, making it nearly impossible to legally operate dropshipping businesses there.<\/p>\n<h4><span class=\"ez-toc-section\" id=\"3_Countries_with_high_import_taxes\"><\/span>3. <strong>Countries with high import taxes<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>Certain countries impose high tariffs or import taxes, which could make dropshipping financially unsustainable. For instance, Brazil and Argentina have high import duties that could result in significant fees, potentially eating away at your profit margins. While not illegal, dropshipping to these countries requires careful consideration of costs.<\/p>\n<h4><span class=\"ez-toc-section\" id=\"4_European_Union_EU\"><\/span>4. <strong>European Union (EU)<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>The EU has strict consumer protection and VAT laws, which dropshipping businesses must comply with when selling to customers in Europe. Failure to comply with GDPR (General Data Protection Regulation) can also result in hefty fines. While dropshipping itself is not banned, you must ensure that your business complies with EU regulations on data protection, returns, refunds, and taxes.<\/p>\n<p><iframe title=\"Understanding the Legal Risks of EU Dropshipping\" width=\"800\" height=\"450\" src=\"https:\/\/www.youtube.com\/embed\/3EMcYvR8z9k?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Dropshipping_legal_requirements\"><\/span><b>Dropshipping legal requirements<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Now, let\u2019s talk a bit about some <\/span><span style=\"font-weight: 400;\">legal requirements you may have when starting a dropshipping business.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Business_License\"><\/span><b>Business License<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Do you need a business license? Well, it depends on how you plan to start your dropshipping business.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">So, if you want to have a Shopify, eBay or Amazon shop, then you don\u2019t need a business license right away, but you would need one at some point.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">It\u2019s true that getting a business license means more work on your side if you think about the paperwork involved and the taxes you would need to fill in, but in the long term, it will also bring you many benefits, such as legal recognition and protection from certain liabilities.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">And on top of everything, it may happen that some dropshipping platforms can request proof of business registration before approving you to publish and sell products on their marketplaces.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Taxes\"><\/span><b>Taxes<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">The taxes that you have to pay depend as well on the business type you choose. So, if your business is considered a separate entity, such as a corporation is, then you need to pay business taxes separately from your personal taxes.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">We recommend consulting a local tax lawyer or accountant if you want to know more about how taxes work and what you need to do when starting a dropshipping business. This will make it easier for you when you need to report your income and any business losses.\u00a0<\/span><\/p>\n<p><strong>Read more: <a href=\"https:\/\/appscenic.com\/blog\/understanding-the-legal-risks-of-eu-dropshipping\/\" target=\"_blank\" rel=\"noopener\">Understanding the Legal Risks of EU Dropshipping<\/a><\/strong><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Liability\"><\/span><b>Liability<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">If you choose to have a business <\/span><span style=\"font-weight: 400;\">that is separate from you, it will also protect you from liabilities that may come when you sell online.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">What does that mean exactly? Well, let\u2019s say a customer claims that a product purchased from your store caused them harm, during the settlement your personal assets won\u2019t be at stake.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Another thing you should be aware of is that there are different types of licenses that provide different levels of protection.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Besides a business license, you should also think about going for product liability insurance. This will help cover compensation claims in case a customer sues your business, of course, in the worst-case scenario<\/span><span style=\"font-weight: 400;\">.<\/span><\/p>\n<h3><span class=\"ez-toc-section\" id=\"Legitimacy\"><\/span><b>Legitimacy<\/b><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Being recognized as a legitimate business can bring you many benefits and the most important one is that it will give you more credibility in the eyes of your audience. And this is something that every business owner should want.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">It will also open up some more opportunities for other business deals and more government support. If your country or local community recognizes your business, you have the chance to opt for certain programs built to help small businesses like yours grow and succeed.\u00a0<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Is_dropshipping_legal_in_the_USA\"><\/span><b>Is dropshipping legal in the USA?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Again, yes, it is totally legal to dropship in the USA, but you need to follow some specific rules, such as:<\/span><\/p>\n<ul>\n<li><span style=\"font-weight: 400;\">Credit card &amp; payment merchant facilities for dropshipping businesses are still under improvement<\/span><\/li>\n<li><span style=\"font-weight: 400;\">If you are a foreign-based dropshipping business then there are a few tax issues you need to be aware of<\/span><\/li>\n<li><span style=\"font-weight: 400;\">For dropshipping in the US, sellers need to have a USA Reseller Permit for online store owners based outside the USA<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Dropshippers with stores based outside the USA cannot qualify for credit with US-based suppliers.<\/span><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<p><iframe title=\"Understanding the Legal Risks of US Dropshipping\" width=\"800\" height=\"450\" src=\"https:\/\/www.youtube.com\/embed\/m-p1ccRs2Ws?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/p>\n<p><span style=\"font-weight: 400;\">If you want to know more, we recommend reading additional information on how to have a <a href=\"https:\/\/appscenic.com\/blog\/dropshipping-in-the-usa-for-non-us-citizens\/\" target=\"_blank\" rel=\"noopener\">USA dropshipping business<\/a>.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Is_dropshipping_from_Amazon_legal\"><\/span><b>Is dropshipping from Amazon legal?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Yes, Amazon dropshipping is legal. It seems that an important percentage of Amazon&#8217;s sales are done through dropshipping.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">But, even though it\u2019s legal to dropship from Amazon, you still have to be aware of a few things if you want to keep your online store open there:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">\u00a0Avoid selling items that are copyrighted or fraudulent. You need to be extra careful about that as Amazon takes this policy seriously. If you fail to comply, it can lead to getting banned from the platform or even being sued.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Avoid listing products with an over-the-top markup that will probably give you negative reviews or, even worse, having your store removed by Amazon.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Don\u2019t drop surf, avoid shifting product offerings too often.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Again, we want to point out that if you respect Amazon rules (please go to their website and read in detail all their rules and regulations), your seller account won\u2019t get suspended.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">So, if you\u2019re out of stock and you don\u2019t close your listings or when your products keep on arriving late, these are just some reasons for which Amazon will likely ban you.<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Is_dropshipping_from_Amazon_to_eBay_legal\"><\/span><b>Is dropshipping from Amazon to eBay legal?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Dropshipping on eBay is legal, but dropshipping from Amazon to eBay is not allowed. Here is what eBay is saying:<\/p>\n<p>&#8220;However, listing an item on eBay and then purchasing the item from another retailer or marketplace that ships directly to your customer is not allowed on eBay. Activity that doesn\u2019t follow eBay policy could result in a range of actions including but not limited to: administratively ending or canceling listings, hiding or demoting all listings from search results, lowering seller rating, buying or selling restrictions, loss of buyer or seller protection, and account suspension. All fees paid or payable in relation to listings or accounts on which we take any action will not be refunded or otherwise credited to your account.&#8221; (<a href=\"https:\/\/www.ebay.com\/help\/selling\/posting-items\/setting-postage-options\/drop-shipping?id=4176\" target=\"_blank\" rel=\"nofollow noopener\">Source<\/a>)<\/p>\n<p><span style=\"font-weight: 400;\">Now, just keep in mind that<\/span><span style=\"font-weight: 400;\"> eBay allows dropshipping when you fulfill orders directly from a wholesale supplier.\u00a0<\/span><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Is_dropshipping_from_AliExpress_legal\"><\/span><b>Is dropshipping from AliExpress legal?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Yes, dropshipping from AliExpress is legal too. You can definitely use the AliExpress suppliers&#8217; platform and build your product catalog from there.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">There are many dropshippers that start their online business like this, but, as usual, we recommend doing extensive research, checking who are their suppliers, what are their shipping times, do they allow returns, and what are their terms and regulations to see if this is a platform that can work for your target audience.\u00a0<\/span><\/p>\n<p><img fetchpriority=\"high\" decoding=\"async\" class=\"alignnone wp-image-10248 size-full\" src=\"https:\/\/appscenic.com\/wp-content\/uploads\/2021\/10\/What-are-the-risks-of-dropshipping.jpg\" alt=\"What are the risks of dropshipping\" width=\"1920\" height=\"1080\" srcset=\"https:\/\/appscenic.com\/blog\/wp-content\/uploads\/2021\/10\/What-are-the-risks-of-dropshipping.jpg 1920w, https:\/\/appscenic.com\/blog\/wp-content\/uploads\/2021\/10\/What-are-the-risks-of-dropshipping-300x169.jpg 300w, https:\/\/appscenic.com\/blog\/wp-content\/uploads\/2021\/10\/What-are-the-risks-of-dropshipping-1024x576.jpg 1024w, https:\/\/appscenic.com\/blog\/wp-content\/uploads\/2021\/10\/What-are-the-risks-of-dropshipping-768x432.jpg 768w, https:\/\/appscenic.com\/blog\/wp-content\/uploads\/2021\/10\/What-are-the-risks-of-dropshipping-1536x864.jpg 1536w\" sizes=\"(max-width: 1920px) 100vw, 1920px\" \/><\/p>\n<h2><span class=\"ez-toc-section\" id=\"Is_it_legal_to_dropship_branded_products\"><\/span><b>Is it legal to dropship branded products?<\/b><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Yes, dropshipping branded products is completely legal.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">You only need to choose <\/span><span style=\"font-weight: 400;\">an approved wholesale vendor for those specific branded products and just start dropshipping those products through your online store. We actually recommend starting a dropshipping business by selling branded products if you find the right wholesale product suppliers.\u00a0 This will give your business more credibility right from the start.\u00a0<\/span><\/p>\n<p>We hope that now you know all about the legality of dropshipping and the risks behind it.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>First, we want to clearly specify the following: We are not legal professionals and so all this is not actual legal advice. If you want legal advice, we recommend finding an attorney specialized in this type of work. This article is about our personal experience and recommendations on how to start and build successful dropshipping [&hellip;]<\/p>\n","protected":false},"author":5,"featured_media":13065,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27,52,55],"tags":[28,37,38],"class_list":["post-10056","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-dropshipping","category-ecommerce","category-faq","tag-dropshipping","tag-legal","tag-risks"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/appscenic.com\/blog\/wp-json\/wp\/v2\/posts\/10056","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/appscenic.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/appscenic.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/appscenic.com\/blog\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/appscenic.com\/blog\/wp-json\/wp\/v2\/comments?post=10056"}],"version-history":[{"count":0,"href":"https:\/\/appscenic.com\/blog\/wp-json\/wp\/v2\/posts\/10056\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/appscenic.com\/blog\/wp-json\/wp\/v2\/media\/13065"}],"wp:attachment":[{"href":"https:\/\/appscenic.com\/blog\/wp-json\/wp\/v2\/media?parent=10056"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/appscenic.com\/blog\/wp-json\/wp\/v2\/categories?post=10056"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/appscenic.com\/blog\/wp-json\/wp\/v2\/tags?post=10056"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}