Dropshipping: What Should Dropshipper And Customer Pay Attention To?

Dropshipping: What Should The Dropshipper Legally Pay Attention To, And What Rights Does The Customer Have?

Dropshipping has grown in popularity in recent years. It is an attractive way for a novice entrepreneur to earn money quickly. On the other hand, the customer can benefit from low prices. However, things often go wrong with this way of doing business, and the dropshipper has to adhere to too many legal consumer rules. What are these rules, and what is the customer entitled to if something goes wrong?

What Is Dropshipping?

Dropshipping is when a seller (often a webshop) has the products shipped directly from the supplier to the customer. The dropshipper thus acts merely as an intermediary. This party does not have to keep stock and can save much money.

Often the dropshipper buys products for a very low price from a wholesaler from abroad (often China), after which the product is sold to the customer at a much higher price. In this way, the dropshipper can quickly earn money without too many actions and staff. For this reason, it attracts many people to start a business. However, as you will read further here, some risks are involved.

The Dropshipper Is Liable And Responsible For The Product

Although the dropshipper is only an intermediary and does not see the product being shipped to the customer, this party is legally responsible and liable. For dropshipping, the same rules apply to parties that sell products from their stock. This entails many obligations.

Therefore, the dropshipper is responsible for a good delivery of the product, and this is exactly where this way of selling often goes wrong. The supplier delivers, and the dropshipper does not influence this. This can lead to complications, especially if the supplier is a party in a distant country. 

A lot can happen that delays the delivery; the dropshipper does not influence this. This is why it is very important to make clear agreements about the delivery in advance with the supplier. For example, agree with which carrier the product will be sent, the delivery time, and what should be done if the product is damaged on route. Do not forget to state the delivery times to the consumer clearly.

Do you want to go dropshipping, and do you need help with the contractual agreements with a potential supplier? A lawyer can help you with this. He knows exactly which aspects must be recorded in the agreement.

Dropshipping and Infringement of Intellectual Property Rights

Another thing the dropshipper should pay close attention to is that no intellectual property rights are violated. Again, the dropshipper is responsible for the product that ends up with the customer. That is why absolutely no counterfeit products may be sold. Anyone who does so infringes, for example, the trademark or design right. A trademark owner can then hold the dropshipper liable, leading to hefty compensation.

The dropshipper can never be completely sure that the supplier is not sending counterfeit products. For this reason, it is essential to contractually establish a guarantee with the supplier that no products will be shipped that infringes another's intellectual property right. It is also wise to record the consequences if the supplier does not comply with this guarantee (for example, a fine). 

In addition, it must also be agreed that the dropshipper will not infringe any intellectual property rights of the supplier if the former wants to place photos of the products on their site, for example.

Would you like to know more about which intellectual property rights you should consider when dropshipping? Or do you have a legal dispute because you sold counterfeit products? Then you would do well to be linked to a lawyer who specializes in intellectual property law.

The Customer's Right Of Withdrawal

In principle, the customer has nothing to do with the fact that they have bought a product that has been delivered via dropshipping. Therefore, This has the same consumer rights as a 'normal' direct from a manufacturer or producer. In particular, the right of withdrawal is an important part of this. 

The right of withdrawal means that the customer has 14 days after receipt to change his mind and return the purchase. Therefore, the webshop must refund the amount within 14 days after the withdrawal, whatever the reason for the return. There is an exception to the right of withdrawal for certain products. Think, for example, of custom-made products or items that cannot be returned for hygienic reasons.

Example

Alina bought a speaker through a drop shipping web store. A week after receiving it, she changed her mind; because she saw a better one in an electronics store that she preferred. The web store informs her that they do not accept returns because their supplier does not do this either. Alina does not have to accept this. As a consumer, she has a right of withdrawal, also with dropshipping.

It is not difficult to imagine that there are some snags in returning a product after dropshipping. The webshop must then take back products that they have never owned. Even if the (foreign) supplier does not return products, the dropshipper must do so. The risk is that it will get stuck with all kinds of products, while the attractive thing about dropshipping is not having any stock. Therefore, make good agreements with a supplier on this point as well.

Dropshipping And Warranty

Customers who purchase certain goods are entitled to a warranty. If a product does not work (well) or does not meet the description on the site, the consumer can have it repaired or replaced. It follows European regulations that the customer can demand this up to two years after purchase. 

The dropshipper must therefore be well prepared for this. Again, this can be done by making good agreements with the supplier regarding the warranty. But even if the supplier doesn't take back products, the dropshipper still has to do it. The supplier can take the products back and order a new one from the supplier. This makes it wise for the dropshipper to have storage space for the returned products.

How A Lawyer Can Serve The Dropshipper And The Consumer

It should be clear that the dropshipper must be well aware of the legal rules regarding the sale of the products. Many complications can arise in the process, and the consumer has a strong legal position. 

A lawyer can help put together good and complete contracts with suppliers to avoid problems. For example, when it comes to a legal process, a lawyer is indispensable to limit the damage because counterfeit products have been sold.

As a consumer, have you been disadvantaged by an online store that engages in dropshipping? A lawyer can even take further action to get what you are entitled to.