Is Dropshipping Illegal? Let’s Find Out With Other Dropshipping FAQs

Is dropshipping illegal? What do you need to do for starting your online business? Find answers to all your dropshipping FAQs in this guide.

Dropshipping is a business model wherein you sell products without owning any stock or inventory. As a drop shipper, you’ll get an order and pass it to the supplier who will ship the order directly to the buyer. What makes dropshipping so appealing and exciting is the fact that you can decide your own profit and start your own business easily with minimal investment.

However, this easy money making scheme is often seen as a sham by many people. Most newcomers are worried if this business is genuine and legal. In this post, I’ll be putting all your worries to rest and help you get started with your own e-commerce business.

Are you thinking what most people think?

How can making money online be this easy?

My own business in under 30 minutes? This must be a scam!

Or the most asked question: Is dropshipping illegal?

Here’s a quick answer:

Dropshipping is not an illegal business.

It is relatively new online but still a recognized business model which is used by many as a form of second income and some successful dropshippers even rely on it completely. However, there are many misconceptions about this business either due to fear of deception or misleading information on the Internet.

So, in order to clear all your frequently asked questions or FAQs about dropshipping, continue reading this post.

First off, let me share what dropshipping is all about.

What Is Dropshipping?

Are you hearing this word for the first time or maybe you have read it somewhere and decided to do your research. Whatever your reasons are, let me explain dropshipping in the easiest way possible now.

Dropshipping is a retail business model where you can sell products at a profit markup without keeping any inventory. Once a buyer places an order on your website, you inform your supplier who then takes care of the rest. The supplier will pack the items and ship them directly to your customer.

Now, the customer will receive the product and you have earned your profits.

How does dropshipping work?

You might be interested to know about the complete process that goes behind the dropshipping business. Without keeping you under wraps, let me show you how it works.

Suppose you want to start your own online business with minimum financial investment and lower risks and you hear about dropshipping.

First off, you have to select a niche for your business or what you want to sell. For instance, let’s say you have decided to sell clothing items for men. The best part of dropshipping is that you can always change your niche if you think things aren’t working out for you. So, don’t worry and keep going.

Next, you’ll select your store name like Men In Style and register your domain name. Then, you’ll have to get a hosting service provider for your dropshipping store.

Further, it’s time to set up your store.

You can create your own dropshipping website easily using the easy drag and drop features of WordPress and in-built enhanced features of WooCommerce. You can also select the best WordPress theme for your dropshipping business to give it the desired look and feel.

Now, it’s time to find your products and suppliers. There are many platforms you can select for dropshipping like Amazon or eBay. However, our preferred place to find the best trending products and suppliers for our in-house dropshipping store is AliExpress.

AliExpress has thousands of suppliers selling similar items on the same platform which can help you find the best deal easily. You can also identify good suppliers from the seller rating.

Remember, your seller will be your business partner. So, you must select the suppliers for your store wisely.

Next, you’ll have to select and import products from AliExpress. You can do it easily once you sign up with WooDropship.

What is WooDropship?

WooDropship is an easy way to run a successful AliExpress dropshipping business. It lets you easily import, edit and sell AliExpress products on your store and makes order-fulfillment easier.

Further, it saves time by auto-updating prices and inventory for your store and gives you complete control of your business.

Using WooDropship Chrome Extension, you can import products to your dashboard, edit them and push it to your store.

You’ll be notified once you receive the order and with a single click, WooDropship will fill the cart with selected product variant and auto-fill customer details as well. Make the payment and the supplier will ship the product to your customer.

That’s how easy it is with dropshipping and WooDropship makes it even more simple and fast by automating the routine tasks for you.

Check this quick guide to start your dropshipping business with AliExpress today!

Now, let’s get to the next question.

How do I select the best supplier for my dropshipping business?

Selecting a supplier for your dropshipping business is very easy with AliExpress. There are thousands of suppliers selling different products. Once you have decided your product, check the different sellers who have the same product.

Check the seller ratings to identify their work and delegation with existing customers. Next, you can directly message the supplier and share your dropshipping proposal with them. While, it is not a necessary step, dealing with professional suppliers will help you serve your customers better.

What’s more?

Suppliers who hold experience in dropshipping can help you make better choices and will readily make customizations for you like removing the price, their brand name or adding your name to the packaging.

It is also a good idea to prepare a questionnaire for your prospective supplier and have a formal contract with them clearly stating everything in the mutual agreement between you and them.

Can I dropship the products without telling my supplier? Is dropshipping illegal this way?

Another question which is very common on most forums and dropshipping discussion board is if it is important to tell the supplier that you’re dropshipping their products.

Well, the answer is certainly No. However, you should.

Think about it. What if your customer receives the item and finds the supplier name on the packaging or the wholesale price of the item they bought for you. A far-fetched scenario can also be that the customer is a dropshipping business owner himself and he may contact your supplier for the similar products.

That’s just not right for you or your business.

It is always a good idea to disclose about your business to the supplier and make necessary modifications to the shipping label and packaging for the consumer. Also, having a supplier as a partner in your business can help you handle returns and refunds easily in your business.

What about the taxes that need to be paid as a dropshipper?

Just like in the case of any business, it is important to pay taxes if you have a dropshipping business as well. That is if you intend to keep it legal and not end up losing everything to the IRS and the government.

One thing about it is that you do not have to pay your income tax on the total revenue, but the profit you have. It is very important to maintain your accounts and manage your bookkeeping with the help of invoices for this purpose. But the thing is AliExpress does not provide any invoice for any purchases made on their site. So to download AliExpress invoice, you need to use tools like AliBilling as it very helpful in filing your taxes as well as bookkeeping.

Another important tax is the sales tax. Not all countries have this, but for example, if you are living in the US, then it will be determined on the basis of where you have nexus, i.e. on which states you have physical presence and where you have customers.

Will my buyers know I am selling dropshipping goods?

For your buyer, you are just like another e-commerce store selling the products they like. Your buyer is not concerned whether you have your own warehouse or you’re a drop shipper. As long as they are receiving the product as described, they’ll buy from you.

Nonetheless, they may come across similar products on other sites and even on AliExpress and still, they’ll make the purchase from you if you create a strong brand reputation and exceptional customer service.

AliExpress delivery takes time. Will my customers wait for such longer duration?

I am glad someone asked this question on behalf of many other dropshippers. While starting out this was one of the major concerns for me as well. But, there’s a solution.

AliExpress suppliers offer different shipping methods which may take up to 60 days and even lesser. However, if you wish to receive products in lesser time, select products with ePacket delivery.

WooDropship Chrome Extension automatically detects and highlights the products with ePacket facility on It can deliver within 7-14 days in the US and ships to 29 different countries.

Finally, make sure you have a clear shipping and returns policy similar to your supplier and your customers will have no problem waiting if they know what to expect beforehand.

I am a first-time entrepreneur. Can I start my own dropshipping business?

As noted above, the dropshipping business model is an ideal choice for people who are starting out for the first time or want to try their hand at an online business with least financial commitment.

Setting up your dropshipping store will take less investment than paying the rent for a physical warehouse. Moreover, you can be as flexible with this business as you want. If your dropshipping niche doesn’t work out, select another that brings you profit and revenue.

Need I say more?

All you need is a laptop, an Internet connection and you’re good to go. You can be anywhere or anyplace and manage your complete business in a few clicks. That’s the beauty and power of dropshipping business.

Less Headache. More Profit.

The final conclusion

Is Dropshipping illegal? Dropshipping business is a completely legal and authentic business model which has been around for a long time now and only new to the e-commerce platform. While there are many other ways of creating your online business, I found this one perfect, quick and great for almost everyone.

A little practice, learning, and knowledge over time can help you build a successful dropshipping business very soon. I hope this post has answered most of your questions about dropshipping and you may have many other queries as well.

To learn more about dropshipping, check WooDropship blog for latest tips, updates or leave any question in the comment section below.

Happy WooDropshipping!

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