There are several things to be kept in mind as you decide to become a seller of dropshipped goods. From your suppliers’ warranty and return policies to the legal requirements if the goods cross borders, it is better to know your own personal liabilities and prepare for any eventuality than to start first and find out after the fact that you have not set things up properly.
Shipping & Inspections
Be aware of your current or prospective supplier’s policies regarding product warranties, missing or damaged shipments and who is responsible for shipping charges when returning or exchanging products.
There is a critical period, with many suppliers only allowing several days to inspect and report problems. Make sure you understand these times, sure they start not from date of shipping, but from the day of receipt by your customer. Most suppliers ship goods FOB their place of business, which means that legally you are the owner as soon as the package is turned over to the carrier.
In the case of electronic products, there may be times when your customers receive a Dead on Arrival (DOA) unit that will not even turn on or operate. When selling goods of this sort, it is a good idea to make your customer aware that they should open and test the unit as quickly as possible. Some suppliers insist that DOA claims be filed within 3 to 5 days After Receipt of Order (ARO).
Two weeks from receipt is a fair time limit for you to report problems (other than DOA), with an additional two weeks for the actual return. A 30 day over all policy is fair to all. Unfortunately, not all dropshippers are so lenient, so do not assume anything. Check their policy closely and see if you can adapt it to work for you.
Guarantees & Returns
Does your source even have a satisfaction guarantee? Some do, some have a policy of no returns other than damages or warranty. Be sure and understand before you have someone saying they simply are not happy with their purchase.
In regard to returns of any sort, find out who is responsible for the shipping charges. Who pays if the supplier simply sent the wrong item? Your order to them and your receipt from them clearly shows the item you ordered for your customer, but they sent the wrong thing.
Will your customer have to return the item to you and then you return it to the source? It should work that way, since you do not want your customer dealing directly with your supplier. But even if your supplier does pay return shipping and to re-ship the correct item, who pays for your customer returning it to you?
UK Distant Selling Regulations
In the UK, and possibly elsewhere, there are government regulations concerning customer satisfaction and returns. In the UK they are called the Distance Selling Regulations and you should make yourself familiar with them when designing your own policies. Since links can get stale, simply do a Google search for “Distance Selling Regs” and you will find a nice, user-friendly brochure.
Another consideration when dropshipping across borders is the tax and duty consequences involved. Since rates and product classifications vary from country to country and change from time to time, we will not get into particulars. Our purpose here is to make you aware that these can play a part in your decision to use specific dropshippers.
Customs & Import Taxes
The most important thing to keep in mind at all times in this regard is that your customer, not you, is the one responsible for any charges involved. The seller or the shipper have no responsibility whatsoever in this regard, it is the person whose name is on the “ship to” label who bears full responsibility for any charges levied by the government or carrier.
Whether a courier service such as UPS, FedEx, etc. or a government postal service, all carriers charge for collecting the government’s fees. So in addition to the actual taxes and duties, there will be a fee for the carrier added on to what your customer will have to pay.
To make it worse, oftentimes your customer will only find out after the fact. Depending on the carrier, they may either have to pay in order to get the package, or they may receive an unwelcome bill in the mail days or weeks later,
You should make it clear to your customer before they buy, that they may be liable for such charges. Sometimes things slip through, but there is no guarantee they will. Save problems, make your customer aware of their total costs, not just the cost of the goods themselves.
Being familiar with and informing your customer of these topics can help keep happy customers and reduce charge-backs.
Be aware of your current or prospective supplier’s policies regarding product warranties, missing or damaged shipments and who is responsible for shipping charges when returning or exchanging products.
There is a critical period, with many suppliers only allowing several days to inspect and report problems. Make sure you understand these times, sure they start not from date of shipping, but from the day of receipt by your customer. Most suppliers ship goods FOB their place of business, which means that legally you are the owner as soon as the package is turned over to the carrier.
In the case of electronic products, there may be times when your customers receive a Dead on Arrival (DOA) unit that will not even turn on or operate. When selling goods of this sort, it is a good idea to make your customer aware that they should open and test the unit as quickly as possible. Some suppliers insist that DOA claims be filed within 3 to 5 days After Receipt of Order (ARO).
Two weeks from receipt is a fair time limit for you to report problems (other than DOA), with an additional two weeks for the actual return. A 30 day over all policy is fair to all. Unfortunately, not all dropshippers are so lenient, so do not assume anything. Check their policy closely and see if you can adapt it to work for you.
Does your source even have a satisfaction guarantee? Some do, some have a policy of no returns other than damages or warranty. Be sure and understand before you have someone saying they simply are not happy with their purchase.
In regard to returns of any sort, find out who is responsible for the shipping charges. Who pays if the supplier simply sent the wrong item? Your order to them and your receipt from them clearly shows the item you ordered for your customer, but they sent the wrong thing.
Will your customer have to return the item to you and then you return it to the source? It should work that way, since you do not want your customer dealing directly with your supplier. But even if your supplier does pay return shipping and to re-ship the correct item, who pays for your customer returning it to you?
UK Distant Selling Regulations
In the UK, and possibly elsewhere, there are government regulations concerning customer satisfaction and returns. In the UK they are called the Distance Selling Regulations and you should make yourself familiar with them when designing your own policies. Since links can get stale, simply do a Google search for “Distance Selling Regs” and you will find a nice, user-friendly brochure.
Another consideration when dropshipping across borders is the tax and duty consequences involved. Since rates and product classifications vary from country to country and change from time to time, we will not get into particulars. Our purpose here is to make you aware that these can play a part in your decision to use specific dropshippers.
The most important thing to keep in mind at all times in this regard is that your customer, not you, is the one responsible for any charges involved. The seller or the shipper have no responsibility whatsoever in this regard, it is the person whose name is on the “ship to” label who bears full responsibility for any charges levied by the government or carrier.
Whether a courier service such as UPS, FedEx, etc. or a government postal service, all carriers charge for collecting the government’s fees. So in addition to the actual taxes and duties, there will be a fee for the carrier added on to what your customer will have to pay.
To make it worse, oftentimes your customer will only find out after the fact. Depending on the carrier, they may either have to pay in order to get the package, or they may receive an unwelcome bill in the mail days or weeks later,
You should make it clear to your customer before they buy, that they may be liable for such charges. Sometimes things slip through, but there is no guarantee they will. Save problems, make your customer aware of their total costs, not just the cost of the goods themselves.
Being familiar with and informing your customer of these topics can help keep happy customers and reduce charge-backs.
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