The answer to whether you can sell other people’s products on your website is yes. This approach allows entrepreneurs to bypass the substantial upfront investment typically required for product development and manufacturing. By leveraging existing supply chains, you can focus on marketing and customer acquisition while minimizing the financial risk of holding unsold inventory. The structure you choose determines your level of control, financial commitment, and legal responsibility.
Understanding the Different Business Models
Selling products you do not manufacture involves three primary business models, defined by how the product is handled and the level of risk assumed. The lightest involvement is affiliate marketing, which functions purely as a referral system and carries the least financial risk. The website owner never handles the product or the transaction in this model.
Dropshipping requires a greater commitment, as the website owner processes the sale but outsources storage and fulfillment to a third-party supplier. This structure increases responsibility, especially concerning customer experience and payment processing. The third model is traditional reselling, which requires purchasing inventory wholesale and managing all aspects of storage and shipping. This model demands the largest capital investment and introduces the highest inventory risk.
Selling Through Affiliate Marketing
Affiliate marketing is a performance-based arrangement where you earn a commission for promoting a partner company’s product on your website. This involves placing unique tracking links or banner ads that direct visitors to the partner’s e-commerce platform. When a visitor clicks the link and completes a qualifying purchase, the website owner receives a predetermined percentage of the sale.
This model involves zero inventory or logistics responsibilities. The entire sales transaction, including payment processing, order fulfillment, and customer service, occurs on the partner company’s website. The website owner’s role is solely to drive targeted traffic and generate sales leads. The payment structure is based on a commission rate, which varies depending on the product category and program terms.
The primary benefit is the ability to monetize an audience without managing physical goods, eliminating the risks of overstocking or product obsolescence. Success hinges on building audience trust and ensuring content is compelling enough to facilitate the click-through to the partner site.
The Dropshipping Model
The dropshipping model places the website owner in the role of the retailer, utilizing a streamlined fulfillment process. The customer purchases the product directly from your website, and you collect the payment at your retail price. You then forward the order details to a third-party supplier or manufacturer, who packages and ships the product directly to the customer.
You are the merchant of record for the transaction, making you responsible for the entire customer experience, including returns, exchanges, and service inquiries. Any delays in shipping or issues with product quality directly reflect on your brand reputation.
The website owner manages payment processing and sets a retail price that covers the wholesale cost, shipping fees, and profit margin. Vetting reliable suppliers is necessary to mitigate customer experience risks. A supplier’s fulfillment speed and ability to consistently provide quality products directly affect success and customer feedback. Clear agreements must be established with suppliers to define liability boundaries regarding product defects and shipping errors.
Becoming a Traditional Reseller
The traditional reselling model involves purchasing products at wholesale cost and taking physical possession of the inventory. This approach requires the largest upfront capital outlay, as funds are tied up in goods before sales are made. The website owner is entirely responsible for storage, fulfillment, and managing all post-sale customer interactions, including warehousing costs.
The benefit is maximum control over the entire customer journey, from branding and packaging to shipping speed and returns processing. Controlling the inventory allows the website to offer faster shipping options and ensure a consistent, branded unboxing experience. This greater control translates into higher customer satisfaction and repeat business.
The primary drawback is the substantial inventory risk, including the possibility of products becoming obsolete, damaged, or failing to sell. Accurately forecasting demand is necessary, as overstocking ties up capital and increases storage expenses. This model is chosen by businesses prioritizing brand image and customer experience over minimizing initial financial risk.
Essential Legal and Compliance Requirements
Engaging in any of these business models requires adherence to legal and compliance requirements to protect the business and maintain consumer trust. The Federal Trade Commission (FTC) Disclosure requirement is a primary obligation for any website promoting products for compensation. This mandates that any financial relationship with a company whose products are promoted must be clearly and conspicuously disclosed to the consumer.
The disclosure must be placed in close proximity to the endorsement or link, using clear language that explains the financial incentive, such as earning a commission. Linking to a policy page or burying the disclosure in the footer does not meet the standard of being clear and conspicuous. This rule applies across all models where compensation is received.
Sales Tax Nexus and Collection
Sales tax collection is a complex requirement that varies between the models. For affiliate marketers, the responsibility to collect sales tax generally falls on the partner company processing the transaction. Dropshippers and traditional resellers must determine where they have a sales tax nexus.
A nexus is a substantial connection to a state that triggers a tax obligation. This connection can be established through physical presence, such as having a home office or inventory, or through economic activity, where a certain threshold of sales volume or revenue is reached.
Contractual Agreements and Liability
Dropshippers must navigate complex state rules regarding the two-part transaction between the customer, the website owner, and the supplier. The website owner must have clear contractual agreements, including defined Terms and Conditions and a transparent Return Policy, to set liability boundaries. Written agreements with suppliers should specify who is responsible for product warranties, intellectual property claims, and the financial liability for shipping errors, protecting the website owner from potential legal issues.
Vetting Products and Establishing Partner Relationships
The long-term viability of the business relies on the selection of products and the reliability of partners. A thorough assessment of product quality is the first step, often involving purchasing samples to verify the item’s construction, packaging, and functionality. This is relevant in dropshipping, where the website owner never physically handles the product but is responsible for its performance.
Evaluating the supplier or partner’s operational reliability is equally important across all models. For affiliate programs, this means assessing the partner company’s conversion rates, cookie duration, and commission payment history. In dropshipping and reselling, reliability is measured by a supplier’s fulfillment speed, inventory availability, and responsiveness to order issues.
A calculation of the margin or commission structure must be performed to ensure the product is profitable after accounting for associated costs, such as shipping, payment processing fees, and marketing expenses. Finally, the chosen products and partners should align closely with the website’s established brand and audience interests. Promoting misaligned products can quickly erode audience trust.