Is Branded Dropshipping Legal In 2024?

Welcome to the ultimate guide for the eCommerce mystery. “Is branded dropshipping legal?”

It seems like I get this question from my clients AT LEAST ONCE A WEEK. So let me give a QUICK answer now. 

Branded dropshipping is LEGAL. As long as you FOLLOW the brand’s business licensing guidelines. 

Work with authorized suppliers and comply with the law. Enjoy a profitable eCommerce journey that EASILY attracts buyers. 

Ready to familiarize the process of branded dropshipping? Keep reading!

Is Branded Dropshipping Safe and Legal?

First off, let’s get this fact out of the gate: 

There are TWO common meanings to the term “BRANDED DROPSHIPPING” business.

• The PROCESS of selling generic products under your brand. Incorporating go-to recipes for having a legitimate business. Such as BRANDED PACKAGING, BRAND IDENTITY, AND BRAND LOGO.

• DROPSHIPPING BRANDED merchandise through an eCommerce store. Resell brands like Nike, Adidas, or Supreme. 

For this article, we’ll FOCUS on the 2nd approach. Selling other brands’ LEGITIMATE products through a dropshipping store.

So, is this process SAFE AND LEGAL?

Yes! Branded dropshipping is legal! 

It has legal risks and requires some LEGAL agreements. But once you wrap AROUND the nooks and crannies of this process. Be ready for a SUCCESSFUL branded dropshipping business model down the road! 

Branded Dropshipping Pros and Cons

Now let’s delve into the key pros and cons branded dropshipping companies encounter. 

Pros:

• Faster brand recognition to foster HIGH customer engagement.
• Simplifies targeting potential customers, leading to HIGHER conversion rates.
• EDGE in scaling without brand awareness efforts. Saving business funds on EXPENSIVE marketing fees.
• LOWER advertising costs due to established brand loyalty. FREEING UP resources for business development.

Cons:

• Low-profit margins unless dealing with exclusive items
• RISK of legal issues, emphasizing the importance of legal compliance and insurance
• Limited flexibility in pricing and profit strategies
• DEPENDENCY on brand popularity, affecting sales if the brand loses appeal

Legal Requirements to Consider in Branded Dropshipping 

Dropshipping is often quoted as a NO-BRAINER business model. But only when you DROPSHIP BRANDED PRODUCTS. Not generic, unlabelled goodies. 

Take LEGAL LIABILITY into consideration. One wrong move caused the loss of an entire eCommerce business. Or worse, get involved in ugly lawsuits from BIG COMPANIES.

Sure, everyone’s in it for the money, not the headaches.

So get your pens and notes ready. Take these legal requirements down to start dropshipping branded products SAFELY:

#1: Review the brand’s business license policies 

Brands won’t allow ANYONE to sell their products. They often have strict guidelines. Ensuring only those who UPHOLD the brand identity, brand values, and brand voice. Are authorized to sell their goods. 

Always read through a brand’s business license policies. Before working to DROPSHIP their goods. There are often LICENSING FEES and royalties to take into consideration. Not to mention law-binding contracts that need the help of legal professionals. 

#2: Only work with authorized wholesale suppliers 

NEVER resell counterfeits while you’re a dropshipping partner of ESTABLISHED BRANDS. On top of gaining tons of unhappy customers. It’s VERY LIKELY to encounter legal complications and intellectual property rights. Trust me, when they hit the pockets, they surely break the bank.

It’s better to work with multiple suppliers. But they should be VERIFIED with the brands first. 

#3: Follow legal standards of advertising and marketing efforts

Only make factual claims in your marketing materials. Being transparent guarantees having satisfied customers. And avoid going against the loyal customers of partnered brands. 

#4: Sales tax compliance

Typical dropshipping businesses won’t need to worry about taxes early on. But those SELLING branded goods must know the ins and outs of sales tax before selling. Branded dropshipping online stores are recorded on paper as functioning businesses. 

Meaning, the local government will be very interested in how much you make. Especially how much a BUSINESS OWES in income tax. Every single month or year. 

Pro tip: I recommend getting professional legal advice for BRANDED DROPSHIPPING. SECURING your online business from hefty legal costs. For breaching consumer protection laws. 

What Products Are Legal to Branded Dropship?

Considering the GLOBAL SCALE of e-commerce. It all depends on which country and the RULES of brands you want to dropship. 

But GENERALLY SPEAKING. Feel free to ship every brand product, OFFERING permission to do so. 

To be an authorized reseller of a brand… Make sure to check off this checklist:

• Have an authorized reseller agreement
• Adhere to Consumer Protection laws
• Comply with trademark laws 
• Ensure your chosen eCommerce platform allows branded dropshipping.  

Are these always necessary?

No. When selling only a couple of dropshipping items. There’s no need to GO THROUGH ALL THESE TROUBLES. As long as the products sold are USED or LIMITED EDITION. 

That’s why we see PLENTY OF PEOPLE selling branded products in marketplaces. 

How to Legally Sell Brand Name Products?

Selling branded items SEPARATES a dropshipping business from selling counterfeit goods. But PERMISSIONS are necessary from the people who own the brand. 

So here’s a detailed guide. Helping you skim through a COMPLETELY LEGAL journey towards branded dropshipping. 

Step1. Know the brand 

Before asking a brand to sell their products. Take the time to familiarize yourself with its brand’s values and licensing policies. Such as reviewing fees, royalties, and common terms used in licensing agreements. 

This helps understand the process and increases the CHANCES of getting permission.

Step2. Get your dropshipping business ready

Make sure to meet the brand’s standards. They care about things like product quality, so read their guidelines carefully.

Pro Tip: Outline how to acquire, maintain inventory, and manage logistics.

Step3. Develop a marketing strategy for the branded products

Make a plan for how to market the brand and the products you wish to sell. Who’s the target market? What do they like? 

Doing some research on the market and competitors helps figure this step out. 

Step4. Ask permission from the brand 

Now comes the big moment – reaching out to the brand owner. 

Write a POLITE and PROFESSIONAL message introducing yourself. Attach a business plan and marketing strategy to prove seriousness. 

Don’t hear back after a couple of weeks? Then, follow up with another polite message.

Step5. Choose a selling platform for your online store

Each platform has its unique way of dealing with copyrighted items. And protect brand owners’ rights. 

Whether on Amazon, eBay, or Shopify. Make sure the platform allows selling products that are branded. And, of course, get permission from the brand before selling their products.

Remember: No seller agreement, no branded dropshipping.

And that’s it! You may now sell branded products online the right way!

People Also Ask about Is Branded Dropshipping Legal

What’s Next

Branded Dropshipping is legal only if permission is GRANTED by the brand owner. You sell products owned by successful business owners legally. Getting this permission might take a LONG ROUTE. But once access has been granted. This attractive business model brings profit to enjoy.

Ready to sell popular brands?

Call Leeline! We help every retail business avoid legal complications. Reliable dropshipping suppliers and STAY ON TOP of the supply chain.