Jan 22, 2021 - 10:04 AM
Image source: Pixabay
First thing first. The obligatory disclaimer: IANAL (I am not a lawyer).
That said, the person at the front line will be considered the seller of the product. People will come to you first in case anything goes wrong because they got the product from you. If you stock the product, then people will most of the time just assume they are getting your product which you made and are responsible for.
There is a lot of liability in this situation because the maker of the product may be far from you- overseas maybe- in a place where the courts do not have jurisdiction.
From a legal perspective, the person importing and marketing products is considered the manufacturer and this is the position you assume when you dropship. You therefore have a duty to ensure quality and effectiveness of the product. It is assumed by courts that you can (and should) prevent the circulation of shoddy or harmful products.
A Few Tips To Reduce Risk
• Request to see the producer's previous and current customers.
• Check on forums to see if you will find any information on the producer or their products so you can be aware of any red flags up front.
• Ask them to provide you with a credit report so you can go over it and find out more still about them. Make sure to research the product before you stock it and find out everything you can about it.
• Find out whether they have product liability insurance. You may want to get an additional layer for yourself.
• Find out if you are the first to carry their product ever because this will provide you with more information on their dealings.
• Make sure they don't have dishonest promotions and their strategies won't leave a mark on your site.
• Provide as much information as you can about the product and also ask the producer to share instructions and information so that anyone using it is well informed.
Suffice it to say that you will bear full liability as the dropshipper so you need to make sure that the product is safe and works before you market it. You are after all the contact between the customers and the product.