Advice on re-selling products
Discussion
So I have an online retail company which does well, we have a (nearly finished) newly upgraded Magento 2 website with a host of on going features such as retail finance, card facilities etc etc on top of this an excellent and returning customer base from years in the business.
We have been in talks with a company who are what I would call a broker. We met on a mutual basis and its lead to this.
They basically have over 180 independent shops on their online site and at the moment they market these shops online and try to bring in sales for the companies on their books. Kind of like a one stop data base for shops in their country.
They are based outside the UK (lets not bring Brexit in to this..yet) and have expressed interest in working with us. What they are wanting to do is target the UK market for sales, they already have plenty of interest from the shops on their books and we will basically load their stock on to our site for UK/EU customers to buy knowing its from a trusted source, they can use card/finance facilities etc and generally just have a smooth worry free process. The stock we will be selling along with some approved used will be clearance/old stock, ex-demo and they have asked about listing current 2020 models (see below for my concern on the 2020).
In return we get a cut, it will be min 10% per sale. Sales range from £1000 - £5000+ with an average I would say (from experience) of about £2200.
We will make it clear on our site the product comes from a dealer abroad, your item will be tracked and insured in transit.
What I am wanting to know is from a legal perspective is this OK?
My worry was that cause my company is taking the payment the UK manufacturers/distributors will look at me as a 'dealer' and stepping on the toes of UK shops (mainly on current 2020 models) however we are really just going to be a broker ourselves essentially. We are just getting the customer a better deal through a trusted source. They pay us and their bikes is delivered direct from the dealer.
If this works then its great, easy-ish process and we already have the groundwork done (functioning website with customer base).
If it doesn't work then no skin of my nose as we just continue as we have done for 7 years but there is big potential here.
Any advice welcome
We have been in talks with a company who are what I would call a broker. We met on a mutual basis and its lead to this.
They basically have over 180 independent shops on their online site and at the moment they market these shops online and try to bring in sales for the companies on their books. Kind of like a one stop data base for shops in their country.
They are based outside the UK (lets not bring Brexit in to this..yet) and have expressed interest in working with us. What they are wanting to do is target the UK market for sales, they already have plenty of interest from the shops on their books and we will basically load their stock on to our site for UK/EU customers to buy knowing its from a trusted source, they can use card/finance facilities etc and generally just have a smooth worry free process. The stock we will be selling along with some approved used will be clearance/old stock, ex-demo and they have asked about listing current 2020 models (see below for my concern on the 2020).
In return we get a cut, it will be min 10% per sale. Sales range from £1000 - £5000+ with an average I would say (from experience) of about £2200.
We will make it clear on our site the product comes from a dealer abroad, your item will be tracked and insured in transit.
What I am wanting to know is from a legal perspective is this OK?
My worry was that cause my company is taking the payment the UK manufacturers/distributors will look at me as a 'dealer' and stepping on the toes of UK shops (mainly on current 2020 models) however we are really just going to be a broker ourselves essentially. We are just getting the customer a better deal through a trusted source. They pay us and their bikes is delivered direct from the dealer.
If this works then its great, easy-ish process and we already have the groundwork done (functioning website with customer base).
If it doesn't work then no skin of my nose as we just continue as we have done for 7 years but there is big potential here.
Any advice welcome
I think you've used a lot of words to describe dropshipping? (apologies if I missed anything) if so apart from possibly complex paperwork and import logistics your reputation is related to the delivery performance.
Possibly holding stock of popular items is an option going forward but I would certainly look to have an experienced logistics person manage the entire project.
Possibly holding stock of popular items is an option going forward but I would certainly look to have an experienced logistics person manage the entire project.
DSLiverpool, just seen your email and will reply ASAP (on hols at the moment).
Essentially drop shipping, my concern was us taking the payment as a shop and UK distributors kicking up a fuss even though we are just a re-seller and not acting as a dealer. Its kind of like Amazon in a way, we are just providing a platform for sellers to list their stock and we take payment?
Shipping is not a problem, we have been importing/exporting for seven years so can get this nailed down easily and an easy process. We will state on all adverts the lead time (4-5 days) and will make sure all products are packaged well.
In regards to warranty or returns we will put this on the dealer selling the product. So if for example a product broke the customer would contact the dealer who supplied it. We will of course help where possible but there isn't anything we can do as it was the dealer who supplied it.
Essentially drop shipping, my concern was us taking the payment as a shop and UK distributors kicking up a fuss even though we are just a re-seller and not acting as a dealer. Its kind of like Amazon in a way, we are just providing a platform for sellers to list their stock and we take payment?
Shipping is not a problem, we have been importing/exporting for seven years so can get this nailed down easily and an easy process. We will state on all adverts the lead time (4-5 days) and will make sure all products are packaged well.
In regards to warranty or returns we will put this on the dealer selling the product. So if for example a product broke the customer would contact the dealer who supplied it. We will of course help where possible but there isn't anything we can do as it was the dealer who supplied it.
Appreciate reply - thanks.
For Amazon supplied they look after returns for the first 30 days then they refer you to the maker, you would be referring from day 1 and where I see an issue is unwanted returns and carriage.
Possibly as a service you could collate returns then return in bulk to the supplier?
At present we are building a site for independent worldwide designers to sell directly to the Uk public, the site owner lists the items and takes a retainer and commission which is probably your best model.
They went to great lengths to perfect a process to facilitate straightforward ecommerce.
Cheers
For Amazon supplied they look after returns for the first 30 days then they refer you to the maker, you would be referring from day 1 and where I see an issue is unwanted returns and carriage.
Possibly as a service you could collate returns then return in bulk to the supplier?
At present we are building a site for independent worldwide designers to sell directly to the Uk public, the site owner lists the items and takes a retainer and commission which is probably your best model.
They went to great lengths to perfect a process to facilitate straightforward ecommerce.
Cheers
Yes I presume it would be us the contract is with as we are essentially taking their payment.
We have no problem with returns, if a customer wants to return it to our UK warehouse then they can and we could leave it there for later re-sale.
The products we sell are quite niche and we very very rarely get a return so its unlikely.
We are also quite a personal company so will email the customer up on order to give them an update on delivery and a follow up email when delivered to make sure everything is OK so we I cant see the above being a problem.
DS - that concept would work great however we also sell our own stock as well so would need a split method (either drop shipping or our own stock). Until we see if it all works ok we could just take payment like any normal order and then process the payment to supplier.
We have no problem with returns, if a customer wants to return it to our UK warehouse then they can and we could leave it there for later re-sale.
The products we sell are quite niche and we very very rarely get a return so its unlikely.
We are also quite a personal company so will email the customer up on order to give them an update on delivery and a follow up email when delivered to make sure everything is OK so we I cant see the above being a problem.
DS - that concept would work great however we also sell our own stock as well so would need a split method (either drop shipping or our own stock). Until we see if it all works ok we could just take payment like any normal order and then process the payment to supplier.
Is there an official UK distributor for the products you are importing? If so, there might be questions for your supplier if they have signed a contract to only supply certain territories. Not sure how that plays out with competition law though.
As said, UK consumer rights sit with you but I don't see why you couldn't ask for returns to be overseas, as long as your terms are clear in that regard. If returns under distance selling would be expensive though, I would expect some complaints about the cost! If the item was faulty, you would have to pay for the return.
As said, UK consumer rights sit with you but I don't see why you couldn't ask for returns to be overseas, as long as your terms are clear in that regard. If returns under distance selling would be expensive though, I would expect some complaints about the cost! If the item was faulty, you would have to pay for the return.
Camelot1971 said:
Is there an official UK distributor for the products you are importing? If so, there might be questions for your supplier if they have signed a contract to only supply certain territories. Not sure how that plays out with competition law though.
As said, UK consumer rights sit with you but I don't see why you couldn't ask for returns to be overseas, as long as your terms are clear in that regard. If returns under distance selling would be expensive though, I would expect some complaints about the cost! If the item was faulty, you would have to pay for the return.
There will be a UK distributor for some brands however a lot of the stock will be used, ex-demo or old models so I cam hoping (with the new/old stock) that they will let it slide. The suppliers abroad would like to push and list new 2020 products but I can see that causing a problem. I have asked them to check their contract in regards to selling in the UK.As said, UK consumer rights sit with you but I don't see why you couldn't ask for returns to be overseas, as long as your terms are clear in that regard. If returns under distance selling would be expensive though, I would expect some complaints about the cost! If the item was faulty, you would have to pay for the return.
I could ask the customer to return abroad but as you say I cant see them being happy paying £70-80 to return their product so it might as well come back to our UK warehouse for re-sale. Makes it easier unless the supplier abroad wants it back in which case I will ask them to pay for collection/return to them.
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