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Legal Question about dropshipping

Discussion in 'Dropshipping & Wholesale Hookups' started by boozie, Sep 4, 2012.

  1. boozie

    boozie Power Member

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    I found a dropshipper that has a line of products that sell very well and there is good money with them. I sell them on both ebay and amazon. I have spoken to the dropshipper and he tells me that these products, which come with a purchase order and return receipt directly to the company with full manufacturer's warranty etc, are supplied by an authorized retailer for the company. But the company forbids them from selling on ebay and amazon. Therefore, they need to find outside sellers to do it for them. That's where I come in.

    My question is, is it legal for an authorized retailer to do this? Is there any way I can get into any legal trouble by doing this? I don't want to do anything illegal.

    Again, they are legit items, with purchase orders directly from the company itself, that are being supplied by an authorized retailer to an ebay/amazon seller. Am I doing anything illegal?
     
  2. 860Asylum867

    860Asylum867 Newbie

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    I am interested in this. PM me with how things will work
    I would like to see some pictures...and price quotes ...can you pm me the info?
    thanks in advance...
     
  3. Nextgen Games

    Nextgen Games Newbie

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    Usually they can't sell it on ebay because the company that supplies them doesn't allow it. You can find the information on ebay's website. I got my eBay account suspended doing something like this.
     
  4. boozie

    boozie Power Member

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    There are other sellers that sell them and they are not VERO products and they are legit. I ordered one of each product to my house and even brought the one into Best Buy and told them straight up. I bought this on the internet and was wondering if you could tell me if its real. Completely legit. They are wholesalers who buy them in bulk. So it's not against the TOS of both Amazon and Ebay, but is heavily frowned upon by the companies. So, being that they are wholesalers, that takes care of my legality question. I am in the clear. Now, if I can just figure out how to keep my banned info from popping up on ebay and amazon screens to get back to selling in their marketplaces. Stealth accounts won't do me very good for very long. These products sell way too fast. I think I need to set up an LLC and get an EIN, hopefully they can't find out my SSN this way, at least that's what I hear. Can anybody confirm this?
     
  5. jackens

    jackens Newbie

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    It is a bit complicated nowadays. In my opinion if any manufacturer forbids to sell his products on Ebay etc. that means it is forbidden.
    And you have two possibilities:
    1. Manufacturer that which is not worldwide famous brand sells products to wholesaler. This wholesaler might sign the contract with manufacturer that he is not going to let customers sell these products on Ebay etc. Then retailer buys products from wholesaler (might sign the contract but rather not) and sells these products on Ebay because he wants to sell as much as he can. If he doesn't sell on Ebay or other auction he needs to sell through online store or physical store. He can even warning form his wholesaler that it is forbidden to sell on Ebay but on the other hand wholesaler doesn't want to loose customer and might turn a blind eye. There is crisis so situation is difficult. Manufacturer may do the same if he found out his product are sold through Ebay.
    It mostly depends on how many products you sell as a retailer. If you sell a lot you bring profit to your wholesaler/supplier.
    There is situation possible where the manufacturer moved his production to e.g. China (not only just used as example). Then factory in China made more products that manufacturer ordered. This factory looking for wholesalers around the world that want to buy these products. They sell them cheaper than manufacturer. Chinese called these products over stock in my opinion fakes and from manufacturer point of view and not only is obviously illegal. Products might be the same the same materials used the same package the same name.
    So there is a wholesaler who decided to buy these products from Chinese factory. This wholesaler might even doesn't know that this might be illegal. I've seen some Chinese sites where was written that offered products are neither genuine nor fakes. This wholesaler will not inform his retailers that products are not allowed to be sold on Ebay (he doesn't know it or he doesn't care).

    2. Manufacturer is a worldwide well-known brand. They sell through own network of physical stores and through official online store. Sometimes they allow to sell over stock to be sold legally. But many times it is forbidden and again factory sell products to wholesalers. Yesterday I got offer from some middleman. He offered me stock of worldwide lingerie brand. In description of products was made in Italy but then I was told it is made in Turkey. They might be fakes or "over-stock". You never know. Even official physical stores may sell not really genuine products but what is interesting they might look the same, made of the same materials and the same quality.

    To sum up
    I guess it sounds complicated but in fact it really is. Because of internet and moving production to Asia it is difficult or impossible to control situation. It is too late :)