April 6, 2020
Dropshippers Getting SUED?! (Store Reviews) How to Sell Branded Products Legally (When is it OK?)

Dropshippers Getting SUED?! (Store Reviews) How to Sell Branded Products Legally (When is it OK?)


– Hey guys, today I’m
going to be reviewing drop shipping stores from our subscribers but with a bit of a twist. See after my last store review,
I had lots of people ask me if I would review their stores because they weren’t making as
many sales as they had hoped. Well, as I started to
browse through these stores, I became quite concerned. Some of them were making sales, though not as many as they were hoping for but frankly, they should be
glad they weren’t making them. Despite the fact that I have talked extensively on this channel before, about how to protect yourself legally when drop shipping and selling online, these stores were
absolute legal nightmares. They were just begging to be shut down either from being sued, or
having their PayPal accounts or their Shopify Payments
account shut down and frozen for the sake
of business practice. Who cares if you make lots of money, if PayPal freezes your account. That is why in this video I am not gonna be reviewing these stores for sales, conversions and branding,
though of course if you guys watching this have any advice for them, be sure to leave it in the
comments section below. Instead, I’m going to
talk about what the stores need to do A.S.A.P so that
they don’t get shut down. And quick disclaimer, I am not a lawyer, so this is not
official legal advice. So with that out of the
way, let’s get started. (upbeat tune) Okay, who is lucky victim number one? And it is Scoops World Online. Thomas, congratulations
on making four sales, however as you’re about to discover, I am very concerned about those sales. Alright, let’s switch over to my computer and we will take a look. Okay, so here we are
on Scoops World Online. So as you guys can see,
Thomas is selling phone cases, phone accessories, headphones. And again, I am not reviewing these stores for sales and conversions. You guys can leave Thomas your own advice in the comment section. At the moment that I
stepped inside the store, I was thinking, oh no, phone
cases are one of the most common items that engage in copyright and trademark infringement on AliExpress, and so scrolling down, what
do you think that I found? Yes, I found copyright
infringement everywhere. Take a look at this phone cover featuring photos of Mike Tyson. Photos have copyrights too. This picture of Bob Marley, copyrighted. These phone cases have almost certainly been produced illegally and let’s take a look at these Marvel cases
that you’re selling, Thomas. These are all illegally made and sold. You need to get rid of these A.S.A.P. See, my concern, Thomas, is that these are the items that you’ve
been successfully selling. Selling popular copyrighted characters like Captain America is super easy, but why do you think it’s easy? It’s easy because Marvel and Disney have poured squillions of dollars into making them super popular
and they’ve done that so they can make
squillions of dollars back from selling their own merchandise. And they’re not going to let you do that. Selling these phone cases is illegal and they’re within their rights to sue you. And this is something you
all need to keep in mind because copyright and
trademark infringement is rampant in China, because over there these laws are not enforced. Now after I’ve told you all that, let me just confuse you for a second. You see this brand new Captain
America action figure here? I could go ahead and
list this on my own store right now and sell it legally. But wait Sarah, you just
said you can’t sell items that are copyrighted, how
are you able to sell this? Well it’s because I went and bought it from a store. This store bought these figurines legally from the licensed creative distributor who got them directly from the copyright holder’s manufacturer. Because the store bought it
legally from the distributor, who acquired them legally
from the copyright holder’s manufacturer,
it meant that it was legal for me to purchase this. And it’s perfectly legal to resell items as long as you’ve got
them from a legal source. The problem with AliExpress
suppliers though, is they almost never have permission to actually use these copyrighted characters. And thus, they did not
produce them legally in the first place. And this also answers another
question that I get a lot. Sarah, I want to sell
this flamingo water bottle but it has the name of
the Chinese manufacturer Transhome on it. Is that legal? And the answer is yes, when the Chinese manufacturer Transhome went and made their own generic flamingo water bottle, and then slapped their own name on it, they had every right to
make it and every right to do so. Because they produced it legally,
they have the legal right to sell it to you which means that you then have the legal right to go on and resell it to customers. Hopefully I cleared that up. Alright, so who is
lucky victim number two? And lucky victim number two
is Doggo Trend by Heemin. Sorry if I pronounced
your name wrong, Heemin. Alright Heemin, so you
joined The Dropship Club and you made sales and that’s awesome, but going through the
store, I can see there’s a lot from the course that you’ve skipped and this is potentially the
worst thing that you skipped because you could lose
everything from this mistake. Alright, so let’s switch
over to your store. Alright, so here we are at
your store Heemin, Doggo Trend. Scrolling down, I can’t see
any products with copyright infringements which I’m relieved about. But hold on, hold on! What’s this? What’s this Heemin? Something very important is
missing from this footer. And so when I saw that it was missing, I thought, oh it must
be in the menu, but no. No. It’s not in there either. So what am I talking about? I’m talking about the refund policy page. The fact that I couldn’t
find it anywhere starts to make me concerned that
perhaps it didn’t even exist. And so I went to Google,
and I did a search for it and nope, seemingly you have
no refund policy on your site. This needs to change. This is something that
I’ve actually talked about a lot on this channel and inside
The Dropship Club as well. I actually give our members inside there a refund policy template. I also recommend that you link to the refund policy page in
the footer of your site. That way, it will be on
every single page and all customers have no excuse
for not having read it. Now here’s the thing, I
don’t actually think that a refund policy is a legal requirement, at least, I don’t think that
it’s a legal requirement in the USA but it’s still very important for you as a merchant to have one. Think about this, a customer
goes and orders a shirt from you, but it arrives
and it’s the wrong size, it’s too small for them,
and so they email you and they say, oh hey, I
ordered a shirt from you but I ended up selecting the wrong size. Can I please get a refund
and get a new shirt? Now not only is this a huge pain for you, but you lose money if you follow
through with this request. So of course you email back the customer and say, I’m sorry, we only
do refunds for faulty items. But you see, this consumer
is used to the ridiculously generous return policies
that huge stores like Macy’s offer, which by the way, is not standard in the eCommerce
world for small sellers. And so this lovely customer goes, wait you didn’t specify
that, there’s no policy on your site, how was
I supposed to know that you wouldn’t let me return
the shirt if it didn’t fit? Screw you, I’m going to PayPal. And so they go to PayPal
and they open up a dispute. Now I think there’s a
really good chance you would win that dispute because
the customer shouldn’t just expect that they can return an item if they selected the wrong size but the damage is still done. I once read a Facebook comment from a drop shipping group Facebook
group from someone who said, “Who cares if you give a customer a refund for an item that’s out of stock? No one loses anything.” Uh no. PayPal and credit card companies
watch your seller metrics. How many refunds do you get? How many disputes do you get? If you get too many, you risk
getting kicked off and frozen. So Heemin, before you do
anything, make it a priority to go and add this A.S.A.P. Alright then. So who is going to be
lucky victim number three? And lucky victim number
three is Kokosale from Alex. Okay Alex, let’s go
take a look and see how compliant your store really is. So here we are on Kokosale. Again, I am not giving any
conversions or sales advice. If anyone watching this
has any, you can feel free to leave it in the comments section. So scrolling down the
site, I couldn’t see any immediate evidence of
copyright infringement, which is good and of course
you have a refund policy in the footer of your
store and that is good. But there is another major
thing I wanted to check for and to do that, I came and
opened up a product page and took a look and you know what, Alex? You know what? It isn’t here. It isn’t here! You’ve taken the time to
install the Beeketing app to add scarcity to your
store, but you haven’t taken the time to add a
shipping time disclaimer. Nowhere on this product description
is there any disclaimer. The fact that you prioritize
adding a countdown timer, this is setting expectations
for your customers, is extremely troubling. Let’s be honest, long shipping times are one of the downsides to drop shipping. The 10 to 20 days that
a customer needs to wait for ePacket shipping, while
it’s usually on the lower end of that scale, is still a lot. Now the reason why most
people are concerned about it is because they’re scared of it impacting their conversions and
their sales so they try to hide it from the customer. But that’s not going to work. After having a week of
not receiving your item, the customer is gonna email you and say, hey I don’t have my item, what’s up? And when you go, oh shipping
times are two to three weeks, just be patient, they’re
not going to be patient. They’re gonna go and file
a dispute with PayPal for you not telling them. And you know what? Not warning the customer about abnormally long shipping times is shady practice. And PayPal is understandably
not going to be very impressed. So don’t be shady. Will having longer
shipping times are normal and affect your sales and conversions? Yes, but not as much as you might think. The real concern here
is about the follow up customer support that you need to do if the customer doesn’t
understand it properly before they order from you. So make sure that you are
very upfront with them. Tell them it will take two to three weeks. For it to be on the safe side, tell them it will be two to four weeks. You should be putting the
disclaimer very clearly on your product page
and I recommend that you bold this to make sure the
potential customer sees it. And then I recommend that you go ahead and you put the disclaimer
in your confirmation email telling the customer that
the shipping is going to take two to four weeks
and to please be patient. So thank you very much to everyone that submitted their store. I hope Thomas, Heemin, and Alex that you are not too offended by my very blunt advice and
that you go and you make those changes A.S.A.P. And thank you very much to
everyone who watched this. If you would like even more honest advice about aspects of drop
shipping and selling online, that are very important to
know, but rarely talked about, then be sure to subscribe to Wholesale Ted and click that little
notification bell next to it so that you don’t miss
out on any of our videos. And as you may remember
from earlier in this video, here at Wholesale Ted, we have a premium step by step training course called The Dropship Club. It takes you through the process of setting up a drop
shipping store from start to finish and it’s perfect for beginners. If you’d like to join it, simply click on the link in the video description below. And before you run off,
I’ve got you more free training for you. Here at Wholesale Ted,
we also have a free eBook that teaches you the six
steps that six figure drop shipping stores follow to make over 10,000 dollars every month. To get that eBook for
yourself, simply click on the link that’s also in
the video description below.

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