Dropshipping supplier agreements

A dropshipping supplier agreement should set out what the supplier provides, how orders move from acceptance to carrier handover, who handles problems, and how charges or terms can change.

Put those working details in writing before you rely on the supplier for customer orders. Account approval or catalogue access does not settle them.

Define the arrangement

Identify the parties and the products or product groups covered. Record the supplier’s ordering identifiers, delivery destinations, dispatch locations or location-change process, and who picks, packs and hands over each parcel. If another business fulfils orders, establish who can give your store a dependable answer about them.

Identify the documents that govern the arrangement: the agreed terms, product and price schedule, and service schedule. Date each version and keep later agreed changes with it.

Check standard-form terms

If the supplier provides a standard-form contract, read the full agreement and any linked documents before accepting them. Australian Government guidance says business contracts must be easy to understand and must not include unfair terms or hidden fees. Make sure the wording makes clear what each party must do and what charges apply, rather than relying on an informal explanation.

The ACCC can investigate and take enforcement action on unfair terms in standard-form contracts to protect consumers and small businesses. It does not investigate individual complaints or provide legal advice.

If a term’s effect is unclear, get it clarified before relying on the agreement. Do not assume the ACCC will resolve a disagreement between your store and the supplier.

Agree on the handoffs

For detailed order-submission steps, see the supporting article on order workflow. In this agreement, identify which agreed process applies.

Agree a supplier dispatch timeframe or service standard, measured from order acceptance, and state what happens if the supplier misses it, such as a notification, escalation or agreed remedy. This is a supplier-performance term, not a customer-facing delivery estimate.

A tracking number may exist before a parcel reaches a carrier. If the supplier calls label creation “dispatched”, define carrier handover separately before describing the parcel to a customer.

The agreement should give your store the information it needs to make accurate statements about stock availability and likely delivery timing. An uncertain supplier estimate is not a firm arrival promise.

Set charges and problem-handling rules

Record the agreed item prices or price schedule, packing, handling, freight and other charges. State the currency, GST treatment where relevant, payment timing and process for disputing an invoice. Specify which terms apply to orders already accepted when a change takes effect.

Agree who investigates transit damage, wrong goods and missing components; what evidence is needed; who arranges a return or replacement; and which costs the supplier will credit. If either party relies on goods-in-transit insurance, check the policy terms for the shipments concerned. Insurance does not establish that a particular loss is covered.

The store that sold to an Australian consumer is responsible for resolving applicable consumer guarantee problems with the products it sold. Keep the customer decision separate from a supplier credit, carrier claim or insurance claim; supplier terms cannot remove the buyer’s rights.

Align supplier information with store claims

Set out which product specifications and descriptions the supplier confirms, and make sure your store’s claims are based on information you can substantiate. Australian businesses must give customers truthful information about goods and services, so avoid relying on unconfirmed claims when describing a product or promising a particular quality or standard.

For goods covered by consumer guarantees, the Australian Consumer Law requires goods sold to consumers to be of acceptable quality, match their description and be fit for a stated purpose. Identify the product details and any supplier commitments your store relies on to describe or promote goods. This does not transfer your store’s consumer-guarantee responsibilities to the supplier; it helps connect the information supplied to the commitments made to buyers.

Keep customer and supplier dispute paths distinct

Agree how your store and supplier will escalate a disagreement between themselves, but keep that process separate from the route for a customer’s complaint. State and territory consumer protection agencies manage individual consumer complaints and issues with businesses, and may offer voluntary dispute services. The ACCC accepts reports and uses them to inform its education, compliance and enforcement work, but does not resolve individual disputes.

Control what reaches the buyer

Ask whether parcels may contain a supplier invoice, logo, return address, coupon, catalogue or other insert. Agree what is permitted, who approves changes and how instructions reach the person packing the parcel. A sample parcel can reveal an issue, but cannot establish that every later parcel will be the same.

Check whether packaging or inserts could give buyers a misleading impression about the product, price or seller. Resolve a conflict with your store’s offer before using that packing arrangement.

Make changes and exits workable

Set a notice and response process for changes to prices, products, dispatch locations, services and packing. Record the proposed change, affected items, effective date, treatment of open orders and the response required under the actual agreement. A new price file should be assessed against that process; its arrival alone does not establish which terms govern an existing order.

Include a dispute route and an exit process. Identify who will finish accepted orders, provide tracking and handle later claims if the relationship ends. When operations change, review the clauses on dispatch locations, services, packing and open orders, and record any agreed amendments.