Is Dropshipping Legal? A navigator to the Legal Risks (2025)

Starting a recent business can require overhead costs for things like retail space and utilities. Even if you’re a tiny business owner selling products online, you may still incur outgoings for storage space and shipping costs.

The dropshipping revenue strategy is a legal, expense-effective way to run an online store that can assist you avoid a lot of these outgoings.

Here’s the info you require to commence a successful dropshipping business that complies with local and national laws and regulations.

Is dropshipping legal?

Yes, dropshipping is legal. It is a widely used revenue strategy in which a retailer does not keep the products it sells in stake. When a customer places an order, the retailer forwards it to a supplier or manufacturer, who then ships the products directly to the customer. Like in any business, retailers who use dropshipping must adhere to local, national, and international laws regarding the sale of merchandise.

As long as regulations are followed, dropshipping is a low-hazard, legitimate revenue strategy with little personal or product debt hazard. You may desire to have a lawyer assess any legal agreements you enter with your dropshipping partners and third-event suppliers to explain who has legal debt for issues arising during the sales procedure, the shipping procedure, and during customer usage.

Dropshipping legal regulatory adherence

Here are some legal regulatory adherence issues to keep in mind when establishing your dropshipping business:

Copyright laws

A ordinary question among recent ecommerce vendors is: “Can I get sued for dropshipping?” Like any business, you could be sued for any of a host of reasons, and copyright violations are among them. You may be in danger of violating copyright law if your supplier is selling counterfeit goods to fulfill your customer orders. Proceed with caution when partnering with suppliers and receive any ethical concerns seriously.

customer protection laws

Even if you aren’t the corporation making a product, your online business must abide by customer protection laws and is responsible for the standard and safety of goods shipped to customers. If a product that you sell causes damage, you could face personal injury litigation, so you’ll desire to carry product debt insurance.

Truth in advertising laws

Dropshippers are responsible for accurately representing products in any marketing efforts. If unhappy customers buy a deceptively marketed product in an online store that uses dropshipping, they are unlikely to sue the store’s supplier. Instead, they’ll probably sue the business whose name is on the box.

levy and licensing laws

Like any retailer, dropshipping businesses must collect and remit applicable sales levy. You also must pay income levy. Many states require a business license or sales permit to operate a retail business. Contact a local legal professional if you’re unsure about licensing requirements for your area.

Platform-specific requirements

Platforms like Amazon, Etsy, and eBay have specific requirements for selling dropshipping products. Entrepreneurs can face legal issues or having their accounts removed if they do not comply with each platforms requirements. 

What is dropshipping?

Dropshipping is an online retail fulfillment way in which a retailer handles sales, marketing, and customer service, and third-event businesses handle manufacturing and fulfillment.

In the dropshipping revenue strategy, customer orders accepted by a store are forwarded to a supplier, who packages and ships the order.

Dropshipping is particularly popular among ecommerce retailers, as it lowers the costs needed to commence and run an online business.

Why commence a dropshipping business?

Running your online store as a dropshipping business offers several advantages over a traditional retail model, freeing you to focus on specific things and leaving other details to your dropshipping partners. The upsides to dropshipping include:

• Low enterprise costs
• No require to source materials
• No warehousing or inventory management
• No shipping headaches
• Easier to develop products and transformation formulas
• Ability to focus on what you do best

Low enterprise costs

In the dropshipping industry, you don’t require to spend money to stake your store, and you don’t have to pay for retail space. Your main expense is buying products from your dropshipping supplier, which is usually done on a per order basis after a customer order is made. As a outcome, dropshippers can theoretically operate with zero monetary schedule for inventory.

No require to source materials

When you associate with a dropshipping manufacturer, you don’t have to worry about raw materials or supply chains. Your associate handles things like worth changes on materials and shipping logistics.

No warehousing or inventory management

Traditional retail stores require space to stake inventory. When you outsource manufacturing, inventory management, and order fulfillment to a dropshipping associate, you offload these responsibilities.

No shipping headaches

Shipping comes with a lot of logistical challenges. Dropshipping partners work with shipping carriers on your behalf to efficiently dispatch customer orders.

Easier to develop and test products

If you get into private label dropshipping, where an outside corporation makes a custom product on your behalf, you can save money on product advancement. You can also test multiple dropshipping suppliers to view whose products your customers prefer. And, if an existing product isn’t working out, it’s easier to switch dropshipping suppliers than develop a recent product from scratch.

Ability to focus on what you do best

With manufacturing and order fulfillment off your plate, you can focus on three crucial ecommerce business elements: marketing, store design, and customer service. Your job is to do trade research and attract customers. Once shoppers discover your website, you can provide them a great purchase and checkout encounter, and back them with high-standard customer service.

commence dropshipping with Shopify

Shopify users can connect their stores with dropshipping suppliers to automatically import product listings and submit customer orders. discover out how to commence dropshipping with Shopify today.

* Please consult independent legal advice for information specific to your country and circumstances. Shopify is not liable for your use or reliance on these guides.

This post is for information purposes only. You are responsible for reviewing and using this information appropriately. This content doesn’t contain and isn’t meant to provide legal, levy, or business advice. Legal requirements are updated frequently and you should make sure to do your own research and reach out to professional legal, levy, and business advisers, as needed. Your local state, province, or county will have different steps and requirements. To sell products using the Shopify platform, you must comply with the laws of the jurisdiction of your business and your customers, the Shopify Terms of Service, the Shopify Acceptable Use Policy, and any other applicable policies.