Is dropshipping legal in India? To answer this question, First, you need to know what dropshipping is? And that’s how it works. Then you can be sure that dropshipping is legal or illegal in India. I will clarify this topic.
Table of Contents
What is dropshipping
Dropshipping is a business model of eCommerce. In this business, you do not have to stock any type of product in advance. The customer will order the product from you, and the supplier will deliver it directly to the customer. And there are no legal requirements for dropshipping in India
Read more: What is Dropshipping business in India?
How dropshipping works:
Dropshipping is a method of business. This means the retailer sends a third-party product directly from the supplier to the customer.
This means that once the order is received from the customer, the seller forwards the details of the order to the supplier. And the supplier directly shipped the order to the buyer.
So this is the dropshipping method, it is not an illegal, totally legal process.
You can use various sources for dropshipping like Woocommerce dropshipping, Shopify dropshipping or you can also use Meesho for dropshipping.
Is dropshipping legal or illegal?
What is allowed or legal or illegal, I will clarify this confusion. What’s the difference between legality and what is allowed and not allowed? Essentially it’s not a question of legality or not. It’s really a question of the terms of the service and what amazon specifically allows.
Also read about: 10 Best dropshipping products to earn money in 2021
Now let’s look at a few other platforms first
So if you look at eBay for example, and you look at the terms of service for eBay. eBay does allow dropshipping they clearly pretty clearly spell it out. If you look at Shopify for example, Shopify almost encourages you to do it because Shopify is just it’s a dropshipping model.
You build a store and then know they want to ship out the product whether you’re shipping it out yourself or you’re shipping it from a Chinese supplier you know they don’t really care they pretty much spell it out that dropshipping is allowed.
There are a lot of doing-it-yourself platforms like Etsy for example other marketplaces where you’re fulfilling it or you’re using a third-party seller these are all different from dropshipping large companies really huge multi-billion companies.
Do dropshipping way fair Walmart amazon a lot of these giant retailer’s giant online eCommerce shops essentially do dropship.
When they tell their customer or their business partner their supplier to ship the product to the customer. And in one sense that’s exactly what we’re doing when we are buying from Walmart. And shipping it to the customer.
The big difference, however and this is really important is that we are buying from a retailer Walmart, not a wholesaler Walmart is a retailer.
And that’s where the distinction is we are purchasing from a retailer and we’re shipping it to a customer. That’s the point that people get confused about.
Also read about: 5 Popular Reasons Why Dropshipping Fails
Explain amazon:
Now amazon specifically does say on their website according to their terms of service that shipping from a retailer is not allowed clearly they do spell out that you should not be ordering from a retailer and shipping it to the customer.
Having said that now why do we do it or how do we get around that here’s the bottom line.
Amazon is probably the smartest company when it comes to big data. And think that millions of people dropshipping millions of sellers are dropshipping and Amazon doesn’t know it would be quite gullible.
Amazon definitely knows that we dropship along with millions of people who dropshipping. They just choose to at this point ignore it kind of leave it in the gray area. And at the end of the day guys, it comes down to a personal decision.
Now we’ve done over 50 million dollars and we’ve been very comfortable continuing to dropship and grow that scale it is never had any issues when it comes to that.
Yes, we have gotten a few warnings saying hey you know you shouldn’t be doing dropshipping in which case it’s kind of like a slap on the wrist and we promise not to do it again but we continue to do it.
Amazon enforces you know what they want and they will leave some leeway for things that they’re okay with and in this case. When you talk to the big drop supplier out there the guys who do millions of dollars like us.
Most of them will tell you they’ve never really run into these issues having said all that that’s a personal decision and I want to reiterate that you need to decide for yourself what you’re comfortable with and what you’re not comfortable with.
Also read about: Dropshipping vs Affiliate marketing | Which One is Better in 2021
How to register a dropshipping business in India?
The registration of dropshipping is not compulsory. In simple words, you don’t require a license for dropshipping in India.
If we talk about Gst registration for dropshipping. That is also not also compulsory because your supplier will pay the GST you are only working as a middle man. But in the future, there may be a tax policy for dropshipping.
Summary
But to clarify and summarize over here it’s not a question of legality. You’re not going to be found for dropshipping it’s basically one company’s statement. And it’s their terms of service a lot of other platforms allowed it.
Amazon does not the books say that you shouldn’t you can dropship. But you should be fulfilling that order yourself or via a third party, you should not be using a retailer.
We continue to do it and we’re perfectly comfortable with it. We’ve seen we observe and we see the amazon tends to be fairly gray about it they know about it but they’re not doing anything about it at the end of the day.
We believe that they’re perfectly fine with it now that doesn’t say they may change their mind tomorrow and if they do we’ll stop dropshipping on amazon and we’ll move on to the next platform. You can check dropshipping suppliers in India
Conclusion
Yes, Dropshipping is legal in India and it doesn’t involve any registration process you can start Dropshipping business online with Meesho, Shop101, and oberlo without any legal registration