Drop Ship Professor

This post is in direct response to a forum question on Shopster.com concerning legal liability as a drop shipper. Shopster is an interesting company that combines drop shipping and a shopping cart. I’ll post a full review in a few days.

First some preliminaries. I am not a lawyer and don’t even play one on TV. I have spoken to a few lawyers about this and nobody really wants to go “on the record” as every case is different. This is really a technical legal term called money grubbing. The material below is from my own limited research. So basically you this advice as a general guide, but consult with an attorney about your specific situation. Second, you really should consider incorporating. Talk with your accountant about the possible tax advantages. In addition, real wholesale drop shippers will not deal with you unless you have an employee ID number.

So, now the legal stuff. In general you can be held liable for the content on your site. For example, you sell nutritional supplements and state on your site that vitamin C cures cancer. You can expect a call from the Federal Trade Commission and possibily a lawsuit from someone who was not cured. You might also get into trouble if, for example, you stated on your site that the recommended dose for a certain supplement was dangerously high.

Another way you can get into legal trouble is by selling products to people who legally cannot purchase them. The obvious example is selling pornography to a minor. Certain states may regulate particular items. For instance, various states allow different formulations of pepper spray.

You can insulate your personal assets, from lawsuits, to some extent by incorporating properly. Again, check with your accountant and/or lawyer. If you decide to incorporate, I recommend the company I personally use, The Company Corporation.

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There are quite a few drop ship directories on the Web (see our comparison of the major one’s on our drop ship directory reviews). Some are relatively inexpensive, but you do get what you pay for. With that in mind let’s review the grand daddy of these directories - World Wide Brands.

World Wide Brands began its directory in 2003. At this point I do not know how many companies they have in their database (I’m not sure they even know since they add more every day). In January 2007, they launched their latest (and greatest) product called OneSource. OneSource is more than just a simple database.

First, OneSource provides not only drop ship leads, but also leads for light bulk wholesalers, volume wholesalers, liquidation wholesalers, and instant import buys. You may only be interested in drop shipping right now, but sometime down the road when you are doing, say $1 million in sales, you might want the extra margins involved in buying in bulk. Think about it this way if you can get an extra 10% margin if you buy in bulk - on $1 million in sales that’s an extra $100K in profits per year!

Second, OneSource is also a powerful analytical tool. If you’re like most Internet entrepreneurs when you come up with a new product to sell you start by conducting some basic research. You go to one site to determine the product demand and maybe another to check on the competition. Then you need to find a reliable source. How many times have you found a great market, only to come up short on a great supplier? Well, OneSource combines all of the research right along with the suppliers. It even includes a proprietary algorithm that determines whether or not your product will proves successful online.

Third, OneSource closely integrates with eBay. If you are even thinking about doing eBay drop shipping, you need OneSource. World Wide Brands is an eBay Certified Solutions Provider. The built-in analytical tools will also determine how well your product will sell on eBay.

Fourth, they offer a ton of resources for free. Even if you do not purchase OneSource, you should at least visit World Wide Brands. The site has an extensive collection of free articles, ebooks, videos, and newsletters.

Fifth, they offer a free preview. Check it out and see if it’s right for you. If not, you’re not out any money.

OneSource is not cheap. They charge a one-time fee of $299 (they are offering a $50 off deal right now - so act fast). While other directories are less expensive, they are not as extensive. The bottom line is that using the data provided you should easily make back your OneSource investment in no time.

Click here to visit World Wide Brands and purchase OneSource now.

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Put simply, drop shipping is a system where a product manufacturer or wholesaler agrees to ship directly to your customers.  Some drop shippers charge a small fee, usually around $1-5 per order.  You should always look for a drop shipper that will ship with your return address label or no return address label (you want the package to look like it came from you).

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Welcome to the Drop Ship Professor Blog.  This Blog provides unbiased reviews, advice, and information about the drop shipping industry.  If you are just getting started with drop shipping, don’t forget to download our free 20 page ebook, “Insider Drop Ship Secrets“.

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