How To Not Get Sued When Drop Shipping!

Guys Anton here from Dropship Lifestyle, calm down, you may or may not know this, but every two weeks I usually do a different training webinar and these webinars are live. I do them from my office here in Austin or my home office or wherever. I'm out in the world, about a thousand people from all over the world participate in these calls and I usually teach for about sixty minutes and then I end it with a 30-minute Q&A session, so during this Q&A session literally, open it up and whatever people want to ask they can ask and until my voice goes away I'm still answering questions so what I've realized in these last few webinars is that I've done that over the last few months I guess about a couple of month.

A lot of the same questions have been coming up and a lot of the questions are like Well, Anton, you know I really want to do this. I'm interested, but what happens if I get

sued

or the suppliers aren't going to sue me or that's not it? illegal and it's that weird, that's where the conversation is changing, like it's coming up a lot more than ever before and while it's a totally valid question and something I think should be addressed, it's something I've never talked about. on different YouTube videos, blog posts, podcasts, or anywhere I've been because honestly, it hasn't been a problem, but I think now that that type of conversation is gaining momentum, this is the perfect time to bring up the topic to discuss it to share my thoughts, so that is exactly what we will do in this week's weekly

drop

ship episode.

Okay, so I think the first thing I should talk about is getting

sued

for selling specific types of products because that seems to be the Now I want to make it clear that anyone can sue you, you know, at any time, for almost anything. , especially in the United States, which is where I live. You can always get sued, but the people you're probably listening to. these stories about they're being sued they're getting cease and desist letters they're having their stores close they're losing their PayPal accounts they're band accounts they're Shopify payments accounts the reason they're doing that at the level of product is

when

they almost always sell copyrighted or trademarked products or brands, so if you are new to e-commerce you may not know it and you might think it is okay to sell it.

I wear a shinola watch, you might think it's totally fine if I could find Shinola watches from China and sell them online. Now this Shinola watch is made in a factory in Detroit, so I don't know, I haven't searched for this, but if you go to Alibaba or Aliexpress. You might find Shinola watches that look a lot like this one now that this is a smaller brand, so maybe not, but if you wanted to sell something like the Game of Thrones hoodies or the Game of Thrones pillows I saw in someone's. store that wanted me to review it, which I probably still will if you find those products from China and create a website called Game of Thrones merch calm or even if it's called do you know Anton's calm merch and sells all Gameofthrones products with their characters. get your intellectual property right on these things, at a minimum, if it starts to get traction, you'll get a cease and desist letter, which basically means the attorney for the company that owns the rights to that property, that intellectual property, that intellectual property .

I'm going to say, listen, cease and desist, okay, don't do this anymore, and if you don't comply, it usually says what the next step is, and that next step is usually a lawsuit and, by the way, if you're moving enough volume. If you are infringing enough on products from certain brands that you know, they will move on and sometimes go straight to a lawsuit, so you know it's very serious, so you should never do that, the only way you should sell Gameofthrones products. I don't. I know who owns that intellectual property, but let's say it's HBO, that's

when

HBO says yeah, you could sell our stuff, same thing.

You know, people always want to sell different clothes, like sports team clothes, and I get it, you know sports is a multi-billion dollar industry, but. You can't just go and start selling, you know, New York Jets hoodies because you want to, you need to get approved and authorized to be a partner of the NFL and sell the type of products, so the first reason why which I think people ask About this, you know it's totally valid as there are many products that if you just want to sell without any authorization, if you find them on Aliexpress or on Alibaba and list them, yes there is a good chance. you can get sued, so now let me make a distinction here, again, if you've been following me for a while, if you've followed the

drop

ship lifestyle, you already know this, but the types of products that we sell, we actually know . get approval before selling them now, we're not going after brands like Shinola or the NFL or, you know, any major television production, but the brands were going after our companies that make legitimate products, like the company that makes these chairs.

Now we wouldn't let me see again what the name of, okay, the Howarth company is. We didn't even buy them when I bought this office, but if we just wanted to sell those chairs, I would contact that Howarth company and they would approve me to sell their products, so I would be a retailer for them, the same as the other 500 chair manufacturers. chairs in the states or sourcing products in the states, so if you do things the right way with drop

shipping

and sell products. that you are authorized to sell, don't you know? I'm not a lawyer.

Things could probably come up somehow, but they definitely don't have to, if you do everything right, you don't have to worry about marks. you're selling by suing yourself, okay, that's not a problem, no, you know, you know, stepping on someone's intellectual property because you're allowed to sell their products, they said yes, please sell our products, we want you to bring us more sales. You're not trying to be sneaky and sell things that are cashing in on someone else's hard work. Well, that's the first thing I think should be covered now. The second thing that is important to talk about again.

Don't know. how it is in other parts of the world, but in the states where I'm from and live, anyone can sue anyone at any time, so you know, let's say I don't know you, you give a customer a $20,000 order with You Have Right, let's say you sell these chairs and someone orders them, maybe they cost $500 each. I have no idea, but you sell 20 and someone buys them and you know, they all go to your customer and maybe the

shipping

gets lost somewhere. or maybe the customer is not happy with it or maybe you know I just don't know, maybe you are a bad person and never sent the order and try to steal the customer's money, all these scenarios could happen and if the customer you are angry enough and dissatisfied with your customer service and basically your company, then let's say you get sued again, that could happen and you could even sue anyone.

Now this is where things I think are pretty important depending on where you are. you're in your business and again, it's not a lawyer or legal advice, but this is just common knowledge when you're structuring your business, your business entity, you have a few different options and the first one, which is how I started, is to just be a sole proprietorship and that means doing business as yourself properly and if you want to start a business today, whatever it's called, you can do it, it's a sole proprietorship, it's in your name, ready now that when you're a sole proprietor right, if I sold these chairs to someone as a sole proprietor and again let's say you know I was a terrible person and I ruined them and I never ship them they are a $20,000 order they could sue my company and since I was a sole proprietor owner that means they could sue me, so if I owned a ten million dollar house and I had 15 Lamborghinis, they could sue me and possibly you know, if the damage was bad enough, get my personal stuff because when you're a sole proprietor, your stuff is stuff. of your business the things in your business are your things, everything is in one basket, so you expose yourself to liability when you go back to doing business as a sole proprietor, that's how I started my business when I was just out of college.

I was like 21 and I had nothing, so I started making some sales and then once I made some sales, I was like, okay, let me figure this out from the best tax structure and the best protection structure, protection structure. of assets, so I literally did what you should probably do, which is I went to Google and I typed in the city I lived in at the time, I typed in small business accountant, I found one with good reviews, I went to his office and then he guided me through different business structures you could set up now.

I'll give you two quick ones because they're the most common: an LLC and if you use an LLC it's a pass-through entity, so the money you know still comes to you and all that, but that business. now you take on some of your liability, so the liability again if you get sued and again you have to make sure that your assets don't get mixed up, you have to make sure that things are really separate from your business and your living expenses, but if you set up correctly, then a lot of that liability, if your company is sued again, will go to that corporation, not your personal assets, so keep that in mind, but again, it's not as easy as just setting one up, you need to make sure that all funds are separate and make sure that your business entity is actually your business entity and you keep your personal things personal, but if you do that, that provides a layer of protection.

The next one, which is the one I went with, is what is called an S corporation, now an S. A corporation is very similar to an LLC; Obviously, there are many differences and some of them have to do with how you pay yourself as a business owner. Some of them help with your tax burden depending on how much income you generate and how much you earn. pay yourself, but another benefit of having an S corporation like an LLC is that it provides some asset protection if again all your assets don't get commingled that way if I got sued because, you know, you screwed someone over on an order or just because was mad at me or whatever and they won then my personal assets would be protected it would be the business assets that would be at risk so those are a few different things to keep in mind now that being said I definitely think about it again no . legal advice, but I definitely think it makes sense, once you're making money, to at least have it where your business is separate from your personal stuff, so you're no longer a sole proprietor, talk to an accountant and see what's best for you, but neither does an LLC or an S corporation have a separate bank account so you have everything you know, literally separate, that's how it pays you, that's your asset, it's your business and it will provide you again, if you do everything right, that layer of protection in case you are ever sued now.

You know, knock on wood, I've been in the business for twelve years and I haven't had to experience anything like that, so it's not like you get sued every other day or anything, but keep that in mind, another thing that It's important to know guys, like I mentioned the product example at the beginning and why people get sued for it. Listen if that's the type of business you want to run, it doesn't matter if you start an S corporation or an LLC or whatever. don't sell intellectual property to people you know, it's not a business worth anyone's time, it's not sustainable, you know something you can and will get sued for, and you just know it's very shady so don't do it, no you do it. keep it on target, keep it legit, there is a lot of money to be made while building a real business that serves both you and your clients, so I hope this answered that.

You already know many of those questions. seeing how you know how to get sued and the legalities of dropshipping, if you have any more feel free to post them below and I'll check out the comments in the next few days and give you answers and responses down there, that being said guys, yeah You didn't know what I do these webinars and are interested in participating again. It's like 60 minutes of training followed by 30 minutes of questions and answers. Find a link below this video. I'll put one in the description that will show. how can you sign up again, they're live that way, I can interact, answer questions in real time and also, you know, customize the presentation for whoever is on the call at the time, so check out the description as always if you're brave. of this video please like and definitely leave a comment to let me know.

I appreciate you guys. I don't know if you've noticed it again if you've been following the channel for a while. YouTube has really improved. For us in the last few months, I'll attribute it to the postof content that I assume you guys are enjoying because it's generating more engagement than ever, it's getting more likes than ever and our subscriber base is growing so it definitely gives me a lot of energy and motivation to make these videos for you every week, so I definitely appreciate you guys and if you're watching this and you're not already subscribed you should subscribe to see what it's all about make sure you get a new workout video at least every week from here at dropship lifestyle on YouTube so thank you all and see you next week for weekly dropship