Alibaba, Aliexpress, and other dropshipping sites carry many brands on their platforms. For the first time drop shippers looking for products to sell, dropshipping trademark products for a much cheaper price from overseas suppliers and selling them to US consumers seems a profitable business model. But the truth is, earning a few dollars from this kind of products is not worth the headache that legal liability issues bring. The sad part is, you might end up losing more money than what you earned.
The Downsides of Dropshipping Trademark Products
You can probably get sales from these consumers at first because they believed that you have the license to sell trademark products. But once they received the goods with the foreign marking, they would immediately email support to complain about how they were ripped off their money to buy counterfeit trademark products. That’s when demands for refund start pouring in coupled with threats to report your company to the Better Business Bureau (BBB) as a scam. Some unhappy customers will take to social media to post negative comments and reviews about your business and warn others not to do business with you. And when this happens, measures like giving a full refund or a free product to the angry customers will not be able to save your business from falling.
Unfortunately, it’s not only the unhappy customers that you have to deal with, but there’s also the trademark owner who can sue you for copyright or trademark infringement. You cannot pass the blame to your suppliers because whatever unlawful activities they are up to, you are automatically complicit for selling their items. Being sued is the “death penalty” that every drop shipper wants to keep away from. When this happens, its the end of your dropshipping business.
Pokemon, Marvel, Disney are just a few of trademarked brands that China suppliers offer through Alibaba and Aliexpress. Here are two examples of products I found that are being sold in Aliexpress using the trademarked brands of Pokemon and Marvel.
You might wonder why they are being illegally manufactured in China knowing that they are widely-known trademark brands. The truth is, unlike in the US where you’ll be slapped with copyright or trademark infringement if you are not authorized to sell these times, the laws are not implemented in China. Producing and selling illegal goods are the norm in this country. This is why all Aliexpress suppliers have no permission to use characters and images that have been trademarked for famous brands like Coca Cola, Apple, and Sony to name a few.
If you planning to dropship products from Aliexpress and Alibaba suppliers, steer clear of trademark products and opt for generic products instead. Spare yourself the consequence of dealing with trademark products in the US or any other countries where copyright and trademark laws are strictly enforced. To protect yourself from unknowingly violating these laws, here are the steps you could take to know if a dropshipping product has been trademarked or not.
- Search on the web if the product brand has an existing website outside the dropshipping site.
- Search the trademarks database of the United States Patent and Trademark Office (USPTO) if the brand has been registered.
If your search turns up positive, you may move to another product as the first product might be copyright and trademark protected. Or, if you still want to sell the product, contact the brand owner directly to negotiate prices, not the dropshipping supplier. You might not be able to get high markups for genuine trademark products but at least you will not worry about getting sued for unauthorized dealership later on.
Finding the Winning Dropshipping Products
If you’re bent on finding winning products to dropship, you’ll need access to information on which products people are most interested in right now. When you do, you’ll not waste money on bad products anymore. You’d be able to reduce time, effort, and expenses by signing up for Product Mafia membership for either $7 a month for a gold membership or platinum membership of $49 a month.
As a member, you will have access to winning products on our website that are added every day. You’ll also get your hand on the supplier data, profit margins, analytics, suggested Facebook targeting, and other valuable information that will help you find winning products the quickest possible way.
Why opt for dropshipping trademark products when you can dropship winning products and earn more profits minus the risks and liabilities?
This article contains general information about legal matters intended for educational purposes only. It should not be taken as legal advice as the writer is not a lawyer. If in doubt, you should always contact a lawyer.