Dropshipping can be a great way to make money online, but is it legal? The short answer is yes, dropshipping is a legal business model in the Netherlands and Belgium. It is a recognized way of business formation by the KVK. They have even written several articles about dropshipping.
What is dropshipping?
Dropshipping is an innovative supply chain management method where the shop owner does not hold or own inventory. Instead, they partner with manufacturers to sell products directly from the warehouse through their online store (or Bol,Amazon,Etsy). Dropshipping is ideal for business owners who want to sell products online without all the risks involved in purchasing products.
The benefits of dropshipping
Dropshipping has many advantages. Here are some examples:
- No inventory: You don't have to buy, store and ship all the products you sell. All you have to do is focus on selling the products. Consider advertising on Facebook, Google AdWords, Pinterest, TikTok or building an email list.
- No storage costs: You don't need storage space to store your products. You can ship products directly from the supplier to customers' addresses.
- Low starting capital: Dropshipping has a low barrier to entry because you don't have to buy products or risk being stuck with unsold inventory.
- Save time and money: Because you don't have to package and deliver the products yourself.
What should you consider as a dropshipper?
As a dropshipper in the Netherlands, however, you are required to follow a number of rules and regulations. These include:
- Paying taxes: You must pay VAT on all products sold.
- Agreements are kept: Products delivered on the agreed date.
- Product safety: It is important that products are safe for use. If your products do not have a CE mark or other certification, they cannot be sold in the European Union.
When is dropshipping illegal?
Unfortunately, dropshipping has a bad reputation due to the actions of some dishonest sellers. Scams unfortunately occur in every industry and so does dropshipping. Here is what you absolutely should NOT do as a dropshipper:
- Not paying VAT
- Failure to deliver products
- Selling fake products
- Advertising with false promises
If dropshipping in this way is illegal. If the government investigates your business, there could be several consequences. Think high fines, closure of your business and damage claims.
Dropshipping with European suppliers
Dropshipping with European suppliers is a good option because not only is it legal, but by doing so, you also ensure fair business formation. European suppliers are known for their high quality products, which means you can deliver excellent products resulting in high customer satisfaction!
We at GOGETTERS have been engaged in improving dropshipping in the Netherlands since 2018. We have developed a simple app that connects European suppliers to your online store in minutes. With our app, you get the tools you need to successfully do business with European suppliers - at a fraction of the price and effort it would take to hire a developer. We take care of everything: think automatic order processing, importing products, updating inventories and much more. So that you can concentrate on growing your business!
Conclusion
Some people are reluctant to try dropshipping because they think it's a scam. But if you follow the rules, sell good quality and deliver on time, dropshipping is perfectly legal and exactly the same as having a regular online store (only without all the headaches that come with keeping inventory)!