Limitations when selling licensed products on Shopify

Hello,

I recently got in contact with Shopify as I was looking to open an online store. I am fairly new at this. I was researching Shopify and seen that they had a few complaints on BBB and other website forums because their website was shut down or payment was withheld. I questioned them about this as well as how to get a reseller's license (Canadian) and got this response.

Wesley D: Hey Carolyn, so the issue we run into there, is copyright law and intellectual property law. If you are selling brand name products without the consent of the companies that produce those products, then that is where we would have to take a look at your shop. It is not as much a resellers licence, but a letter from that company authorizing you to sell their products.

So they are telling me that I have to get permission from the brand name companies in order to sell on their eCommerce platform (if you use the Shopify payment method) otherwise they will shut your shop down. I can tell you that no one I know personally who owns an online shop or a walk in shop has ever gotten permission to sell anything except for having to have government licences (business number, GST, PST if Canadian) and they have been in business for 30 years and have had no problems whatsoever.

Does anyone have this problem or is this an actual thing?

I feel stressed and irritated as opening a store even online is by no means cheap, especially if my store just randomly gets shut down. Does PayPal work best for this instance? What has your experience been like?

Hi Carolyn,

What they seem to be referring to is licenced products, not that every product is licenced. For example, an iPhone isn't, but a Disney doll may well be. Products are licenced to protect against pirated fakes, so you will require the correct authorisation for licenced products.

Now having said that, you wouldn't be dealing directly with the manufacturers or licence holders anyway, not unless you were a serious wholesale customer. Your supplier will be at least one link down in the chain, maybe wholesale or even further removed, a dropshipper. What the licence holder will do is authorise the wholesaler or supplier of type, with the authorisation to distribute their products. So once you purchase from them, then it isn't an issue.

Of course the issue comes when people think they have found a killer price on the same item, then end up purchasing a lot of fakes. Of course you are asked to provide certification, which any legit authorised supplier will be able to provide on request, but a fake maker won't. So end result, shop is closed down ... and that's the best case scenario, because depending on the scale, there is always a chance of legal prosecution that could follow.

So always use legit suppliers and if in any doubt at all, always ask for authorisation documentation. Provide that up front to them, even to someone like PayPal to avoid any red flags there as well and you can get off to a clean, hassle free start.

Cheers