Creating and managing your dropshipping business is challenging work, but enjoyable. So, you probably have no time during the day to think about lawful stuff such as getting sued. In the end, you’re convinced that your business isn’t fairly large to make it worthwhile for somebody to sue you. 

However, being convinced that the chances are super-low to ever do something bad enough to get sued, lose your business and reputation is wrong. You may be sued for a multitude of things, anything from using an unauthorized picture on your website to violation of the ADA to getting accused of intentionally selling an unsafe product that causes health issues.

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While this sounds dull and disappointing, the great news is you can understand how to protect yourself by taking some time to ascertain some strategies, access tools, and implement the newly discovered knowledge.

Some strategies will probably cost you a few bucks, but others are free and require just a small investment of your time. Nevertheless, each of them will inform and prepare you to be successful in dropshipping without being worried about getting sued.

We understand that your dropshipping business’ success is crucial, so read below to get yourself prepared with tips to prevent being sued for dropshipping.

Get A Business License And Insurance

Dropshipping comes along with several risks. One of them is losing your private property, your car, your house, and your bank account in case you haven’t purchased a business license and you get sued.

Having a business license means your dropshipping business is a registered entity on its own. That means your personal belongings are protected because if someone tries to sue you, all liability rests with your business.

However, to ensure your business is completely safe, you should obtain a proper business insurance policy as well. Many owners acquire the errors and omissions insurance policy which is a form of professional liability insurance. It can protect your company against claims of unsatisfactory work or negligent actions made by customers. 

Having a business license and insurance in hand builds a strong foundation for your business. It states to your customers and suppliers that your business is reliable and worthy of their close attention.

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When Dropshipping Never Use Copyrighted Images And Videos

Most of us don’t know everything about copyright law. To make it simple, copyright is the right to copy. It means that any individual who has created an original work (pictures or videos) owns the sole right to copy, sell, and distribute their work.

Infringement of copyright is when another individual uses that work or intellectual property for their own use without asking the copyright holder for permission. Copyright infringement is a serious law violation in the worldwide community.

Stating you don’t know the law or thinking you can’t get caught violating the law won’t protect you from being sued. If you’re dropshipping with vendors from China, it’s good to know that many of them still think nothing of copying, selling, and even distributing another individual’s intellectual work. 

That happens in other countries also, so ensure not to sell a product from a vendor without checking to see if they are authorized for selling it, otherwise, you could be held accountable. While Fair Use can, in some cases, provide you some protection for using material without having the copyright holder’s permission, it just applies to certain forms of content. So, in order to protect yourself, make sure you learn everything about copyright infringement.

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Work Only With Reliable Dropshipping Suppliers

Your suppliers are basically your business partners. Therefore, choose a supplier that has a good reputation, is careful to the needs of your business and open to resolving issues.

No matter where you find them, make sure to ask them some incisive questions to know if you’ll be comfortable doing business with them. Since product quality is crucial for your success, do some product analysis prior to committing yourself to a supplier. To do so, pre-order some sample products for you to ascertain the level of quality. Plus, you will see how long it’ll take for the product to be shipped and delivered.

Product quality and shipping time are vital to your customers because if they’re unhappy for any reason, you’ll be held responsible, not your vendor. So, ensure to read reviews of different suppliers. Also, once it comes time to sign a dropshipping agreement, read it completely and make sure it works best for you.

Final Words

Learning about the legal side of dropshipping isn’t fun at all, but you’ll understand how to avoid being sued. Implement the tips mentioned, and you’ll be more comfortable knowing your business is fully protected. Start your trial with CoreCommerce to dropship using our Vendors feature!

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