Your Legal Partner For Dropshipping and White Labelling

Dropshipping is a term often loosely applied to cover a variety of evolving supply chain models and can arise at different points in the supply chain (for example, manufacturer to distributor, distributor to merchant or manufacturer to merchant). However, dropshipping is typically an arrangement that allows a merchant business to operate free from the constraints of holding stock by leaving the physical stock and supply arrangements to be managed by a third party, usually the manufacturer of the goods.

One of the key areas of concern will be to establish how responsibility for compliance with consumer law will be apportioned between the parties. In a drop shipping arrangement the manufacturer will inevitably be involved and in control of processes and procedures that are regulated but where regulatory compliance is the responsibility of the merchant. For instance, many dropshipping arrangements will involve the manufacturer dealing with many (if not most) of the aspects of order fulfilment, from packing and delivery to handling complaints and returns.

Branding plays an important role in the resale of goods. Having a recognisable brand goes a long way towards establishing consistency in goods and garnering consumer trust in your business. However, it is not always commercially viable or desirable to manufacture your own goods (particularly when seeking to provide a wide range). In those cases, white labelling may be an option. A white labelling agreement is entered into between a seller and manufacturer for the manufacturing of generic products by the manufacturer, to be branded and sold by the seller. 

Our team of specialist business law solicitors is able to assist with all aspects of drop shipping and white labelling arrangements, from negotiating the terms of the arrangement to preparing the relevant agreements.