Terms and conditions of dropshipping store

Terms and conditions of dropshipping store

 4 min read

Rules of dropshipping store is in many ways similar to the rules of the store not functioning in formula dropshipping. In this article we would like to focus on those issues that differ regulations of the dropshipping store from the traditional e-store regulations.

The model of cooperation in dropshipping is becoming more and more popular in recent years. It is a simple and beneficial model for the stores: the store owners do not have to physically have the products of a given wholesaler in their offer. As a result, they do not have to bear the (often high) costs of storage. Therefore, you do not need to have a high financial contribution to start a proper dropshipping business. The products that the customer buys in the webshop are sent to him directly by the wholesaler – which makes the online entrepreneur save money and time, because it is the wholesaler who packs and sends the products. The online store’s profit is the difference between the wholesale price of the product and the price the customer pays in the store. Thus, the owner of the e-shop can focus largely on marketing activities – very necessary, especially in the first phase of operation of an online store.

How does the Dropshipping cooperation model affect the shape of the e-store regulations?

The first step of the e-shop should be defining the model of cooperation with the wholesaler. The owner of an online store can have two roles in relation to the so-called end customer, i.e. a natural person buying products from his online store:

He can function in a dropshipping model either as a “seller” or as a “middleman” between the customer ordering the goods and the wholesaler.

1) Role of the retailer

  • The wholesaler packages and ships the products
  • The store owner is responsible for the products sold (usually also in the context of returns and complaints)
  • The store owner issues a receipt or invoice for the goods sold

This model of cooperation differs from the usual store and warehouse only in the fact that the logistical service of order fulfillment is transferred to the wholesaler. It should be noted that in this formula, a lot depends on how the store owner manages the rules of cooperation with a wholesaler. We know from experience that with properly constructed contract, wholesalers often take on handling returns or complaints. It is worth to take care about it early enough. It is important to mention that what changes here is the place of processing and handling complaints but not the entity responsible for them – it is the online store which is responsible before the customer as far as returns and complaints are concerned.

2) The role of the intermediary between the wholesaler (supplier) and the store’s customer (end customer)

  • In this formula, as in the one above, the wholesaler is responsible for packing the goods and shipping, but there are additional responsibilities: it is to issue the invoice / receipt
  • The wholesaler is also responsible for handling returns and complaints
  • The role of the online store owner is limited here to the proper processing of the order: to provide the wholesaler with the relevant personal and address data of the end customer

The seller therefore has different obligations than the broker and this must be reflected in the terms and conditions. In particular, this applies to complaints and returns. (This is one of the most important issues also in the traditional shop rules). The regulations should define the role of the store in the context of returns and complaints, the scope of its responsibility and a specific procedure. Another important issue in this context is the protection of personal data. In the dropshipping model the store owner provides the wholesaler with the data of end customers to whom the products are sent. The privacy policy must therefore contain information – that the customer’s data will be passed on to another entity to such and such an extent. In this case, it is necessary to conclude an agreement between the store and the wholesaler on the entrustment of end customers’ data processing (in accordance with the principles of RODO).

In the formula in which the store owner acts only as an intermediary, the most important issue is to clearly inform the customer in the terms and conditions about the exact course of implementation of the sales agency service. In this case, it is the end customer who signs the sales contract with the wholesaler: he must have a clear message about where the goods he is purchasing come from and what the entire logistics involved in fulfilling the order look like.

In the formula in which the store acts as a seller – these issues are also very important and should be specified in the regulations – but in this case the end customer has greater comfort – he has much closer and more frequent contact with the store than with the wholesaler and can always turn to the store faster and easier in case of doubts.

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