Some people might ask, “Is dropshipping legal at all?” when it comes to dropshipping as a business model. “Yes, dropshipping is completely legal,” is the short and simple answer to this question. But you’ll need to find out if several parts of your online business are legal to make sure everything is in line with the law. This article will go over each of them to help you get your dropshipping business off the ground.
Legalities you must ensure
These laws will be important not only for dropshippers but also for other online and offline store owners. So, even if you haven’t decided on the type of business you want to have yet, these legal details will be helpful to know.
Do I need a business license?
If you want to know if you need a business license to start a dropshipping business, the answer is no. Technically, you don’t need a business license to start an online store and start selling things to customers. Even though you don’t have to have one, that doesn’t mean you shouldn’t. If you read this article, you’ll see how having a business license could be helpful. By having one, you can keep your business’s money separate from your own, and people will take you more seriously in the business world. Getting a business license can be different depending on which country you want to dropship to. Make sure you find out about all the different kinds of businesses you can start and which one will be best for you to register as.
Taxes vary from country to country.
Taxes are a problem in the same way that business licenses are, because the way you pay taxes can be different depending on where you want to run your business. It’s one of the most important parts of running a business because you’ll have to pay sales tax on the things you sell and income tax on the money you make. This way, you can make your business seem legitimate to both your customers and the law in your country. Since this is a part of your business that depends on where it is, and since laws and rules are always changing, you should talk to a tax lawyer or an accountant.
Who is responsible for any new problems?
You or the business you set up are responsible for any problems that come up while doing business. If you have a business license, you will be less responsible for the business than if you don’t. In those situations, you are personally responsible for any losses your suppliers or customers face when doing business with you. When you run a dropshipping business, you always have to think about where you get your products and what you’re selling. Speaking of which, it’s best not to buy low-quality items from AliExpress because there are a lot of chances you’ll end up selling fake items and getting sued.
But you should also be careful when choosing a dropshipping supplier that is not part of a larger company. You should always be careful with the ones you find while doing research online or on social media, because you could end up sending your customers broken or wrong products. If you don’t want your customer to be unhappy with the purchase and possibly rant about it on social media, which can be very bad for your business’s reputation, you should be very careful when choosing your supplier. Branded dropshipping is a very profitable and safe niche to start in, but only if your supplier makes sure the products are real.
Whether or not your business is real
When you’re running a business, your main goal is to look legit to both your customers and other people in the business world. If you have a Business License, this can be a lot easier for you to do. It will show that your business is legitimate and that you are a reliable source of products.
Most common mistakes to avoid when drop shipping
Now that we’ve talked about whether or not dropshipping is legal, you’ve taken care of the most important legal parts of your business. You can improve the customer experience even more by not making the most common dropshipping mistakes. With the dropshipping business model, you get a lot of flexibility and ease, but you also have to give up some control over how happy your customers are. Since you won’t be shipping the items yourself, you won’t have much say over broken items, mistakes in fulfillment, or shipping times. In the second part of this article, we’ll talk about the mistakes you can make with dropshipping that can hurt your brand or store.
Not choosing a niche or choosing the wrong one
When you first start dropshipping, it is tempting to offer as many products as possible to your customers because this type of business lets you list products quickly and without much work. Even though it’s good to give your customers options, it’s easy to get them confused about what niche you’re trying to fill. You have to pick a niche and be passionate about it if you want to market it in the best and most cost-effective way. There are a lot of free tools you can use right now to find the best niche to get into. Once you know which niche you want to be in, you can learn more about your customers and make your marketing plan more appealing to them. You can not only bring people to your store this way, but you can also show that you are an expert in the field. This will automatically make you look more trustworthy, make your customers think your products are worth more, and improve your bottom line.
Not having a plan for marketing
Not having a marketing plan is another dropshipping mistake that can make or break your eCommerce business. Marketing plans are not just about getting the word out, but also about building a brand. For your customers to think of your brand when they buy something, you need to put it in as many places as you can. Many dropshipping suppliers let you include your brand’s materials in the package, which is a great way to make sure your customers remember where they bought from. Also, sending a thank-you note by email after someone buys something from you can make their experience with you last longer. When it comes to advertising, you need a plan for how to reach the people you want to reach. First, try out different methods that you think your potential customer will respond to. Once you know how people feel about these test runs, you can look at the data and make any changes you need.
Bad structure for a website
In dropshipping and eCommerce in general, it’s very important to have a great website that customers can easily navigate and find all the information they need before making a purchase. Keep your website neat and clean so that your customers don’t get confused and can easily find the products they want. There are many free website builders that don’t require you to know how to code that you can use to set up a beautiful and useful website quickly. Shopify, WordPress, Wix, and Shift4Shop are the ones that people use the most.
Picking the wrong provider
Choosing the right supplier is important for the success of your dropshipping business because they handle many parts of the business that have a direct effect on how your customers feel. It’s very important to have reliable suppliers with whom you can work together for a long time. This way, you can get rid of any doubts about the quality of the product and the trustworthiness of the fulfillment and shipping process. Before you work with a supplier, make sure you know as much as you can about them. Trustpilot is a good place to find out about a potential supplier, read comments about them, and see ratings of how well they do their job. Also, make sure that your supplier has quick customer service in case there are any problems with the purchase. The return policy they offer your customers is another thing you need to keep an eye on. If you have a flexible return policy, you can be flexible with your customers and give them the best service possible.
There is no way to know if a branded item is real.
If you sell brand-name items through dropshipping, giving your customer a fake is probably the worst thing you can do. This can make customers unhappy and hurt your store’s reputation. It can also lead to legal trouble. Because of this, when you work with a supplier that sells branded products, you need to make sure they have a way to make sure the products are real. Dropship Corporation is an example of a dropshipping supplier that only sells authentic branded items from authorized and reputable dealers that are shipped and delivered with the original tags and boxes.
Product pages that are poorly written
When it comes to dropshipping mistakes, the product page is one of the biggest ones that could affect whether or not a customer buys from you. When you’re looking for a supplier, it will save you a lot of time to find one that can automatically add product details and images through a dropshipping plugin for automation or CSV files. When you add listings to your eCommerce store on any platform, it’s important to make sure that the product information, description, and pictures are correct. Make sure you work with a supplier that gives you a plug-in that automatically integrates their catalog and updates their stock so that your dropshipping store is always up to date.
Not giving the right help to customers
One mistake that many new dropshipping business owners make is that they don’t pay enough attention to customer service. However, this is one area where you can really affect how your customers feel about your business. With good customer service, you can quickly get ahead of your competitors and even turn a customer who is upset into one who will buy from you again. Read our previous article on how to deal with unhappy customers to learn how to do this.
Not paying close attention to the process of placing an order
Quite often, a customer will press the wrong button and order something by accident, or they will change their mind the next day. Because of this, you need to keep a close eye on your order and fulfillment process, even if you aren’t the one doing it. Always check your emails, because a customer might have already contacted you to cancel an order that hasn’t been shipped yet. So, the supplier won’t send the item if the customer doesn’t want it, and you won’t have to go through the return process. So, make sure to let both your customers and your suppliers know about any changes. This will help prevent any misunderstandings that could lead to bad experiences with your store.
Poor policy on returns
Before you even start your dropshipping business, you need a good return policy that keeps your profit margin safe. First, you need to know exactly what your suppliers’ rules are and base your own on them. If you work with more than one supplier, you should use the one with the strictest return policy as a starting point. Also, make sure your customers can easily find your return policy on your website so they can make a more informed decision about whether or not to buy from you.
Too soon to give up
When you are new to dropshipping, everything can seem sweet and spicy. But with so much competition, it’s hard to get the attention of possible customers and turn them into paying customers. Don’t get down on yourself if you’re not selling as quickly as you thought you would. Dropshipping is a long-term game. The better you know your targeted niche, the better you can market to them and the more sales you will make, but this takes time. Those who don’t give up will be the ones who win in the end and make the most money.