Almost every day our firm is contacted by different clients who are getting scammed by companies that offer services to set up e-commerce businesses on Amazon. Usually, these businesses are set up as drop shipping businesses. Clients, or better put, victims, will pay up to $30,000.00 to have these companies set up their businesses just to have the business shut down by Amazon shortly after starting their sales. The clients are then found at a loss, not only of the $30,000.00 they paid a company to set up the business, but also for the business itself, and these scamming companies refuse to help the client get their business back up and running on Amazon.
So, what can you do if you find yourself in this position? The first thing you should do is contact an experienced business attorney, such as EPGD Business Law. Second, if there is a contract in place, the terms should be reviewed to see if there are any remedies available to you through the breach of the contract. Finally, if there are no other options available to you, a demand letter can be written to the company demanding a remedy for your loss.
Although these scams are prevalent and something that everyone engaged in the e-commerce business should be aware of, setting up a functioning, compliant business on Amazon can be a very profitable venture.
What is Drop Shipping?
Drop shipping can best be explained as a method used to fulfill online orders, which does not require that the business keep the product it sells in stock. Instead, once the store receives an order, they then purchase the product from a third-party supplier that ships the product to the buyer.
How can I set up a drop shipping business on Amazon on my own?
While it may seem convenient to pay a company to set up your business for you so it’s ready for you to simply start selling, with the recent scams that seem to be happening more and more frequently, it would be advised that you attempt to set up your drop shipping business on your own.
Generally, to start a drop shipping business, you should take the following steps:
- Choose a drop shipping product, ideally a high demand/low competition item;
- Set up an Amazon seller account;
- Register your business and yourself as the seller of record on Amazon;
- Find a reliable supplier;
- Create an Amazon listing for your product.
The biggest advantage to drop shipping is that very little capital is necessary to start the business since you do not have to own and pay up front for the stock of the product. This allows entrepreneurs to experiment with the type of product they would like to sell without having to commit to a full stock of the item.
If drop shipping is something you might be interested in, it is always best to contact an experienced business attorney who can help guide you through the process of setting up a new business venture.
EPGD Business Law is located in beautiful Coral Gables, West Palm Beach and historic Washington D.C. Call us at (786) 837-6787, or contact us through the website to schedule a consultation.
*Disclaimer: this blog post is not intended to be legal advice. We highly recommend speaking to an attorney if you have any legal concerns. Contacting us through our website does not establish an attorney-client relationship.*
10 Responses
Oh I wish you could talk some sense into my son who wants to start a e commerce business for $200. I’ve tried, but he is a moron. Please help!
Want to speak to an attorney about checking out a company I’m thinking of partnering with. Please get in touch asap. Or I’ll call too
We invested about 4000 into an automated drop shipping company powered by Shopify. Shortly after the initial investment communication flat out stopped. Not sure if the company went under, got kicked off of Shopify, or if it was a scam all along. I could use a free consult, next best steps, help. More information can be provided as needed.
Thanks for the help.
Justin
Got scammed for 15k from startastore.co .. They stopped communicating shortly after our store went live. A number of others have been scammed by this dude.
I got scammed by the same company for $6500. Any luck getting your money back?
I was also scammed by these ecom business..25k….Alex saal….is the founder that made me believe he was trust worthy…
We were thinking of investing with them – how long did you invest and did you make any profits?
Man same here . I think we should all go against him
we were unfortunately victimized by this scam and were told that litigation would not be in our best interest due to the costs associated and the low chance of any possiblity to recoup lost funds. My worry is that there are not enough warnings out there to deter future victims from investing.
Hello Audrey,
Unfortunately, this scam has affected many investors across the country. Our goal at EPGD is to provide resources and information to the public to help others avoid falling prey to these sinister tactics.