Dropshippers Getting SUED?! (Store Reviews) How to Sell Branded Products Legally (When is it OK?)

Are YOU making these 3 critical dropshipping mistakes that could get you sued or shut down?
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How to not get sued when dropshipping: https://youtu.be/DtEkAyKapds
3 Things gurus don’t tell you: https://youtu.be/fnCiYMQizrU
Why long shipping times don’t matter: https://youtu.be/sBuiN-CVxE4

In this video, Sarah reviews 3 of our subscribers stores… but NOT for sales and conversions. Instead, Sarah takes a look at them to see if they are legally compliant (and spoiler - they aren’t!). Here are the mistakes they made:

MISTAKE #1: Selling Copyrighted Products

The first store that Sarah reviewed (Scoops World Online) was making a HUGE mistake by selling phone cases that featured copyrighted photos, pictures, characters and trademarked logos (and yes - photos can contain copyrights as well!).

On Aliexpress, a lot of sellers will sell items that contain copyrighted pictures and characters, and sell items that contain logos that are trademarked. A lot of people make the mistake that surely these manufacturers are only selling them if they have the right to do so? But unfortunately, they almost always don’t. The reason why they do it is because they know that they can get away with it, not because they have the right to do so.

It’s very tempting to sell items that feature copyrighted characters/trademarks because they sell extremely well. The reason why they sell extremely well is because companies like Disney have poured enormous amounts of money into making them super popular. That is why they protect their copyrights/trademarks: they want to capitalize on that popularity and keep all of that money for themselves!

However, this does lead to another question that we get asked a lot…

QUESTION: Can I Sell Items that Contain Chinese Manufacturers Names?

YES! Yes you can. There is NOTHING wrong with selling items that contain copyrights or trademarks, as long as you acquired those items LEGALLY. So you can tell a Captain America action figure, as long as you acquired it from a source that either produced it legally, or bought it legally.

The problem with Chinese manufacturers is they usually did not produce their Captain America phone cases legally in the first place, which makes the items illegal - and thus, it makes it illegal for you to purchase them and resell them. If the manufacturers had produced them legally, it would be legal for you to sell them.

So when a Chinese manufacturer places their brand/logo on an item (e.g. the manufacturer Transhome likes to put the name of their factory - Transhome - on their products) it’s absolutely fine to buy and resell that, as they had the right to make that item in the first place.

MISTAKE #2: Not Having a Refund Policy Page

The second store that Sarah reviewed (Doggo Trend) did not have a refund policy page anywhere on the website. This is a big problem because it means that if the customer wants to return an item for an illegitimate reason (e.g. they bought the wrong sized shirt) that you can’t point to a refund policy page and say, we don’t accept refunds if you purchase the wrong size, and we made this clear before you bought it. The customer now has an opening to argue with you that they should receive a refund - which increases the chances that they’ll try to do something like file a dispute with PayPal.

And yes: you would probably win that dispute. But now your seller metrics have been negatively impacted. Be sure to protect yourself with a refund policy page.

MISTAKE #3: Not Including a Shipping Time Disclaimer

When dropshipping from Aliexpress, the shipping times can be 10-20 days long with epacket to the USA. This is an abnormally high shipping time. It is not fair to the customer to not warn them that the shipping times are going to be long. The third store that Sarah reviewed, Kokosale, did NOT include a shipping time disclaimer on their product pages. This is very concerning: you should include a note (and we recommend bolding it) saying that shipping will take either 2-3 weeks, or 2-4 weeks to be safe.

If you do not warn the customer, they could get very upset and legitimately ask for a refund, file a PayPal dispute or file a chargeback. And the chances are, you will lose that dispute because you were engaging in shady practices. So don’t try to hide the shipping times - set the expectation for the customer. Be upfront and let them know!