Is Drop Shipping Legal In Australia?

In this blog we are covering Is drop shipping legal in Australia? The short answer is yes, but it does come with some restrictions. Unlike other business models, drop shipping stores can feel like an attractive option for new entrepreneurs and online marketers who want to get their feet wet without a heavy investment. However, there are some laws and restrictions that come with this model of eCommerce.

Drop shipping is a business model where the retailer does not have any inventory, and instead purchases products from a wholesaler or manufacturer on an as-needed basis with no upfront costs. It can be hard to find sellers that will sell drop shipped items because of how easy it can be for people to get away with dropping ship without telling you (often unintentionally).

Most importantly you'll need to make sure the products you offer can be legally sold in Australia and that you are not breaching any local or international laws. Australia's Consumer Law states goods sold in the country should be of a satisfactory quality and fit for their purpose. If your products are below standard, the consumer protection legislation will come into effect and you may be held legally accountable for up to $1 million. This can be tricky when you are buying from international suppliers like Aliexpress and other Chinese drop shipping suppliers.

To setup an Australian dropship business you need an ABN, Shopify account, domain name, payment gateway account and a dropship supplier. Once this is in place you can start selling to customers in Australia and around the world. This article only covers dropshipping in Australia so I recommend using a search engine to find information on how to set up a global dropship business.

We need to understand what these are there is no specific law that prevents drop shipping in Australia, but there are some laws and policies that place restrictions on the practice but there are some restrictions that you need to be aware of before opening up your store and advertising that you're drop shipping. These include:

You're not allowed to advertise special deals or create coupons that you don't have the product in stock to back up. Any discounts should apply equally to all customers, whether they are buying drop shipped or not. By advertising special offers that you don't have in stock, you're both breaking the law, and reducing your reputation with the drop shipper. You might find they won't supply you anymore, or make it harder for you to do business with them.

If you are caught drop shipping in Australia without an ABN (apply for yours here), then there is a possible $1.8m fine to pay on top of any back-taxes that are owed. The government is starting to crack down on online retailers, and I'm sure this fine will get larger over time.

You're not allowed to sell products that you don't have any knowledge of. Since you're selling these products, the customer assumes you know about the product. If they call or email the manufacturer asking for warranty information, then it's clear that you don't know anything about the product. As an online retailer, some of your responsibilities are to help your customers if there is a problem with their order.

You're not allowed to advertise a drop ship product as coming from Australia. Even if you purchase the products and have them shipped to an Australian address, your customers won't know it's from Australia. You might end up in some trouble overseas if the drop shipper finds out that you are advertising their products as being Australian or otherwise illegal, and they will take action against you.

So in summery drop shipping 100% legal in Australia but as you can see there is a bit more to drop shipping in Australia than just setting up a store and advertising. There are some serious risks involved, but if you're careful, it can be a great way to start making money online with very low upfront costs.

Now If you are just starting out and would like some more in depth information on how to start your own Australian drop shipping business check out our FREE Australian drop shipping training. It covers all the basics in an easy to follow step by step format.