what is a dropshipping agreement contract

How To Not Get Sued When Drop Shipping! sup guys Anton here from dropship,lifestyle calm and you may

Anton Kraly - Drop Ship Lifestyle

Updated on Jan 12,2023

How To Not Get Sued When Drop Shipping!

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How To Not Get Sued When Drop Shipping!

sup guys Anton here from dropship,lifestyle calm and you may or may not,know this but about every two weeks I,typically do a different training,webinar and these webinars are live I do,them either from my office here in,Austin or in my home office or wherever,I am in the world we get about a,thousand people from all around the,world to hop on these calls and I,usually teach for about sixty minutes,and then I end it with a 30-minute,question-and-answer session so during,this Q&A I literally open it up and,whatever people want to ask they could,ask and until my voice goes out I,continue to answer questions so what I,realized over these past few webinars,that I've done so over the past I guess,a couple months or so a lot of the same,questions have been coming up and a lot,of the questions are like well Anton you,know I really want to do this I'm,interested but what if I get sued or,aren't suppliers gonna sue me or isn't,this illegal and it's weird like that,that's where the conversation is kind of,shifting like it's coming up a lot more,than it ever did before and while that's,a totally valid question and something,that I think should be addressed it's,something I've never really spoke about,in different youtube videos or blog,posts or podcasts or anywhere I've been,because honestly it hasn't been an issue,but I do think now that that kind of you,know conversation is picking up steam,this is the perfect time to bring it up,to discuss it to share my saw thoughts,so that's exactly what we're gonna do in,this week's episode of dropship weekly,okay so I think the first thing that I,should talk about is being sued for,selling specific types of products,because that seems to be the major,concern now I want to be clear you can,get sued you know by anyone at any time,for pretty much anything especially in,America which is where I'm based in the,States you can always get sued but the,people that you're probably hearing,these stories about that are getting,sued that are getting cease and desist,letters that are getting their stores,shut down that are losing their PayPal,accounts they're stripe accounts they're,Shopify payments accounts the reason,they are doing that on the product level,is when they are selling almost always,either copyrighted or trademarked,products or brands so if you're brand,new to e-commerce you might not know you,might think hey it's totally fine to,sell I'm wearing a shinola watch you,might think it's totally fine if I could,find shinola watches from China and sell,them online now this watch from shinola,is made from you know a factory in,Detroit so I don't know I haven't,searched for this but if you go on,Alibaba or if you go on Aliexpress it's,possible that you'll find shinola,watches right that look very similar to,this now this is a smaller brand so,maybe not but if you wanted to sell,something like you know Game of Thrones,hoodies right or Game of Thrones pillows,which I saw on someone's store that,wanted me to review it which I probably,still will if you find those products,from China and you build a website,that's called Game of Thrones merch calm,or even if it's called you know Anton's,merch calm and it's selling all,gameofthrones products with their,characters right their intellectual,property on these things well at the,very least if you start to get traction,you're going to get a cease and desist,letter which means basically the,company's lawyer that owns the rights to,that that property that IP that,intellectual property they're gonna say,listen cease and desist all right don't,do this anymore,and if you don't comply then it usually,says what the next step is and that next,step is usually a lawsuit and by the way,if you're moving enough volume if you're,infringing enough on you know certain,brands products they'll go ahead and,just go straight to a lawsuit sometimes,so you know it is very serious so you,should never do that the only way you,should sell gameofthrones products I,don't know who owns that that IP but,let's just say it's HBO it's when,HBO says yes you could sell our stuff,same thing you know people always want,to sell different like sports team,apparel and I get it you know sports are,multi-billion dollar industry but you,can't just go and start selling you know,New York Jets hoodies because you want,to you need to actually get approved and,authorized to be a partner with the NFL,and sell the type of products so the,first reason that I think people are,asking about this is you know totally,again totally valid like there's a lot,of products that if you just want to,sell without any authorization if you,just find them on you know over low or,on Aliexpress or on Alibaba and you list,them yeah there's a good chance you can,get sued so totally valid claim now let,me just make a distinction here that,again if you've been following me for a,while if you've been following dropship,lifestyle you already know this but the,types of products we sell we actually do,get approved before we sell them now,we're not going after brands like,shinola or like the NFL or you know like,any like major TV production but the,brands were going after our companies,that make legitimate products right like,the company that makes these these,chairs now we wouldn't just again let me,see what name is on it okay the company,Howarth I've never even we bought these,when I when I bought this office but if,we just wanted to sell those chairs I,would contact that company howarth and I,would get approved to sell their,products so I would be a retailer for,them same thing with the other 500 chair,manufacturers in the states right or,that source products in the states so if,you do things the right way with drop,shipping and you sell products that,you're authorized to sell you don't you,know again I'm not a lawyer like things,could probably come up somehow but you,definitely don't have to if you do,everything right you don't have to worry,about the brands you're selling for,suing you okay that's not an issue,you're not you know you know stepping on,anyone's like intellectual property,because you're authorized to sell their,products they said yes please sell our,products we want you to bring us more,sales you're not trying to be sneaky and,sell things that are that are cashing in,on someone else's hard work okay so,that's the first thing that I think,should be covered now the second thing,that is important to talk about again I,don't know how it is in other parts of,the world but in the states where I'm,from and I live anyone could sue anyone,at any time so you know let's just say I,don't know you you,you give a customer places a $20,000,order with you right let's say you sell,these chairs and you someone order maybe,they're 500 bucks each I have no idea,but you sell 20 of them and someone buys,them and you know whatever they all go,to your customer and maybe the shipment,gets lost somewhere or maybe the,customer is not happy with them or maybe,you know you just I don't know maybe,you're a bad person and you've never,shipped the order and you try to steal,the customers money right all these,scenarios could happen and if the,customer is mad enough and they're not,being satisfied by your customer support,and basically your company then let's,say they sue you okay again that could,happen and even could sue anyone now,here's where things I think are pretty,important based on where you are in your,business and again not a lawyer not,legal advice but this is just kind of,common knowledge when you're structuring,your business your business entity you,have a few different options and the,first which is how I started is just to,be a sole proprietor and that means,doing business as yourself right and if,you want to start a business today as,whatever your name is boom you could do,it you're a sole proprietor it's under,your name good to go now that when,you're a sole proprietor right if I sold,these chairs to someone as a sole,proprietor and again let's just say you,know I was a terrible person and I,screwed them over and I never ship them,they're $20,000 order they could sue my,company and because I was a sole,proprietor that means they could sue me,so if I owned a ten million dollar house,and I had 15 Lamborghinis at it they,could sue me and possibly you know if,the damage was big enough get my,personal stuff because when you're a,sole proprietor your stuff is your,business's stuff your business stuff is,your stuff it's all in one basket so you,do open yourself up to liabilities when,you do business as a sole proprietor,again that's the way I started my,business back when I was right out of,college I was like 21 and I didn't have,anything so I just started made a few,sales and then once I made a few sales I,was like okay let me figure this out,from the best tax structure and from the,best protection structure asset,protection structure so I literally did,what you should probably do which is go,on Google and I typed in the town that I,was living at the time typed in small,business accountant found one with good,reviews went to his office and then he,walked me through different business,structures that,I could set up now I'll give you two,quick ones because they're just the most,common one is an LLC and if you use an,LLC it's a pass-through entity so the,money you know still comes to you and,whatnot but that business now takes on,some of your liability so the liability,again if you get sued and again you have,to make sure your assets aren't,commingled you have to make sure things,are actually separate from your business,and your life expenses but if you set it,up correctly then a lot of that,liability if again your company gets,sued goes to that corporation not to,your personal assets so keep that in,mind but again it's not as easy as just,setting one up you do have to make sure,all the funds are separated and make,sure that your business entity is,actually your business entity and you,keep your personal stuff personal but if,you do that that provides a layer of,protection now the next one which is the,one that I went with is what's called an,S corporation now an S corporation is,very similar to an LLC there are,obviously a lot of differences as well,some of them are with how you pay,yourself as a business owner,some of them do help with your tax,burden depending on how much revenue you,bring in and how much you pay yourself,but another benefit of having an S,corporation just like an LLC is that it,does provide some asset protection if,again all your assets are not commingled,that way if I got sued for you know,screwing someone over on an order or,just because they were mad at me or,whatever and they won then my personal,assets would be protected it would be,the business assets that were at risk so,those are you know a few different,things to keep in mind now with that,being said you know I definitely think,again not legal advice but I definitely,think it makes sense once you're making,money at least to have it where your,business is separated from your own,personal stuff so not being a sole,proprietor anymore you know talk to an,accountant see what's best for you but,either an LLC or an S corporation have a,separate bank account for that have,everything you know literally separate,like that pays you that's your asset,that's your business and that will,provide again if you do it all correctly,that layer of protection should you ever,get sued now you know knock on wood I've,been in business now for twelve years,and haven't had to experience anything,like that so it's not like you're gonna,be getting sued every other day or,anything but just keep that in mind,another thing that is important to know,it guys like I mentioned the product,example in the beginning and why people,get sued for that listen if you if,that's type of business you want to run,it doesn't matter if you start an S,corporation or an LLC or whatever don't,sell peoples you know intellectual,property it's not a business that's,worth anyone's time it's not sustainable,it's you know something you can and will,get sued for and it's just you know it's,it's super shady so don't do don't do,that keep it keep it at the goal keep it,legit there's plenty of money to be made,while you're actually building a real,business that serves both both you and,your customers so I hope this answered,you know a lot of those questions I've,been seeing about you know getting sued,and the legalities of drop shipping if,you have any more you know feel free to,post them below and I'll check the,comments over the next few days and,provide answers and replies down there,with that being said guys if you didn't,know that I do these webinars and you're,interested in getting like again it's,like 60 minutes of training followed by,a 30 minute Q&A look for a link below,this video I'll put one in the,description it'll show how you could,register again they are live that way I,could interact answer questions in real,time and also just you know kind of,custom tailor the presentation to,whoever is on the call at that time so,check the description for that as always,if you got value from this video please,do give it a thumbs up and definitely,leave a comment to let me know I,appreciate you guys I don't know if,you've noticed again if you've been,following the channel for a while,YouTube has really picked up for us over,the past few months I'm gonna attribute,it to putting out content that I'm,assuming you guys are enjoying because,it's getting more engagement than ever,they're getting more likes than ever and,our subscriber base is growing so,definitely it gives me a lot of you know,energy and motivation to make these,videos for you every week so definitely,appreciate you and if you're watching,this and you're not subscribed yet you,should subscribe to see what this is all,about make sure you get a new training,video at least every week from right,here at dropship lifestyle on YouTube so,thank everybody and I'll see you next,week for dropship weekly

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