Is Dropshipping Legal?

is dropshipping legal we're gonna find out in this video today's question comes from one of my students he asked me Paul is dropshipping illegal I heard that it's not allowed on amazon. com this is a great question because it allows me to not only answer whether or not drop shipping is legal or not which is a question I get quite a lot but also to explain the difference between whether something is the legal or legal and if it is legal whether it's allowed and there is a big difference there so if you guys don't know who I am my name is Paul I run a million dollar ebay drop shipping business I also drop ship on to Amazon and by day I'm a lawyer now because of that I do have to say that the information in this video is not legal advice it's just general information for entertainment purposes only now that we got that out of the way let's begin to answer this question I'll break it down for you guys is it illegal now in order for something to be illegal generally speaking there has to be a federal state or local law declaring it to be unlawful and I've done a lot of research on this and I can say without a doubt that drop shipping is not illegal now if you think about it there are big websites like wayfair. com for instance and their primary business model is drop shipping so if drop shipping was forbidden or wasn't allowed surely a huge company like Wayfarer would have been shut down a long time ago but it hasn't been shut down because it's perfectly legitimate business model that's been around for a long time and is legal now that's only part of the story here because whether or not is legal is irrelevant in some circumstances because the real question is whether is allowed you see where drop shipping on to websites like eBay Shopify or Amazon they are allowed to set up their own Terms of Service create their own rules for their platform they're allowed to decide whether they want to allow drop shipping or not so for instance if we look at Shopify is very clear that drop shipping is allowed they in fact encourage it quite a bit they always have webinars about how to set up drop shipping stores on Shopify they have plenty of articles all about how to set up a Shopify drop shipping business on eBay as well we know that it is allowed if you go into their Terms of Service and their common questions and just general information on ebay. com you'll find articles explaining that you are allowed to dropship so long as you are providing good customer service check out this article that explains all about it which sounds pretty good to me so I'm gonna give this article it thumbs up and if you like this video make sure to give the video a thumbs up as well and then we have amazon. com now Amazon's a little different because Amazon does allow drop shipping but only if you have a relationship or an agreement with a manufacturer directly now what's not allowed is retail drop shipping so that's when you get items from Walmart and ship them directly to customers on Amazon that is not allowed however that doesn't answer the third question is if it's legal and even if it's not allowed do you still want to do it and with amazon drop shipping for myself and for many others the answer is yes we've been doing it we've had success doing it so we're gonna keep doing it and the reason it still works even though amazon doesn't allow it is because they kind of turn a blind eye to this as long as you are providing great customer service and that means uploading tracking numbers answering customer questions making sure to respond to all the disputes that are opened up just providing the level of customer service that buyers expect when they come on to amazon now it is very difficult on Amazon so I wouldn't suggest you just jump into this without some sort of training but just know that you can do it even though it's not allowed because it is legal and the worst that can happen is that they tell you can't do it anymore keep that in mind too because drop shipping is not illegal if Amazon finds out you're doing it you're not going to go to jail get arrested the most that could happen is that they can tell you you're not allowed to do it anymore so the second part of this that I want to discuss is okay we know we can drop ship on to these websites but where can we drop ship from and again this is up to the different retailers so for instance overstock. com is totally fine with you drop shipping from them Walmart is also fine with it however if you go

into their terms of service they do state that they reserve the right to prohibit sales to resellers but in my experience they never enforce that same thing with Home Depot and with Amazon they again do not allow you to dropship from them but people do it anyway because Amazon doesn't ban you if you do it and my thought is because Amazon sees that you're getting a lot of sales for them so why are they gonna complain about it right so we know that drop shipping is legal we know that we're allowed to do it onto ebay onto Shopify and that you can do it onto Amazon as long as you know what you're doing and we know that there's a bunch of different online retailers that you can drop ship from so I hope this answers your question about whether drop shipping is legal or not what the difference is between being legal and whether it's allowed so if you do like this video make sure to give it a thumbs up and make sure to subscribe to the channel because I always make a lot of videos about eBay and Amazon so if you don't want to miss those make sure to subscribe to the channel thanks so much for watching guys and I'll see you in the next video you