What is a dropshipping agreement?
In dropshipping, an online retailer lists a supplier's products, takes the customer's order and payment, and the supplier ships the product straight to the customer. The retailer never holds stock. It works well until a parcel is late, an item is out of stock, or a customer wants a refund — which is why the rules need to be written down.
This template covers the products and the countries the supplier ships to, the product information and images the retailer may use, prices (the supplier's dropship price list or prices you set out) and how shipping costs are charged, and whether the retailer pays per order or against weekly or monthly invoices. You set how orders are sent, the dispatch time in business days and how often stock levels are updated. The supplier ships "blind" under the retailer's brand, provides tracking and bears the risk until delivery. You choose where customers send returns and the retailer's returns window, and the agreement sets who pays for faulty items and change-of-mind returns. Product safety and compliance, recalls, customer data, confidentiality and notice to end are included.
- Best for
- Online stores and marketplace sellers working with a dropship supplier
- Signed by
- An authorised signer at the retailer and at the supplier
- Shipping
- Blind shipping under the retailer's brand, with tracking
- Length
- About 3 pages, initialled on every page
When to Use a dropshipping agreement
- A Shopify or WooCommerce store adding a new dropship supplier
- A brand that sells online and has a wholesaler ship direct to its customers
- A supplier offering dropshipping to several online retailers on standard terms
- Moving from an app's default terms to a direct agreement with a key supplier
- Setting clear returns rules after refund disputes with a supplier
What You Fill In
22 blanks, then the name and email of each person who signs: supplier, retailer.
1 The parties
- Retailer (your business)*
- Retailer address*
- Store name or website
- Supplier (business name)*
- Supplier address*
2 Products and prices
- Effective date*
- Products covered*
- Countries the Supplier ships to*
- Currency*
- The Retailer pays* the prices in the Supplier's current dropship price list · the prices set out below
- Prices
- Notice of price changes (days)*
- Shipping costs are* included in the product prices · charged per order at the Supplier's published shipping rates · charged at the actual carrier cost
3 Payment
- When the Retailer pays* for each order when it places it · weekly, against the Supplier's invoice · monthly, against the Supplier's invoice
- Invoices are paid within (days)
4 Orders and shipping
- How orders are sent*
- Orders dispatched within (business days)*
- Stock levels are updated* in real time through the integration · at least once a day · at least once a week
5 Returns
- Customers send returns to* the Supplier · the Retailer
- Retailer's returns window (days)*
6 Other terms
- Notice to end the agreement (days)*
- Governing law*
7 Who signs
- Supplier signature and date, job title, initials on every page · Someone authorised to sign for the business that holds the stock and ships orders.
- Retailer signature and date, job title, initials on every page · Someone authorised to sign for the online store.
What the dropshipping agreement Covers
- How it works
- Product information
- Prices and payment
- Stock
- Orders and shipping
- Returns, refunds and defects
- Customer service
- Product quality and compliance
- Customer data and confidentiality
- Term and ending the Agreement
- General
Using the dropshipping agreement, step by step
1 Products and destinations
Describe the products or catalogue covered and the countries the supplier ships to. The supplier warrants the products are safe and comply with the laws of those countries, and provides the product information you list.
2 Prices, shipping costs and payment
Choose the supplier's dropship price list or set out your own prices, the notice for price changes and how shipping is charged. Choose whether you pay per order or against weekly or monthly invoices.
3 Orders, dispatch and stock
Say how orders reach the supplier — an app integration, email or CSV — and the dispatch time in business days. Choose how often stock levels are updated; the supplier must tell you within one business day if an order can't be fulfilled.
4 Returns and customer service
Choose where customers send returns and your returns window. The supplier covers faulty, damaged or wrong items; change-of-mind returns are credited when they come back resaleable. You handle all customer contact and the supplier backs you up within one business day.
Tips Before You Send It
- Set your returns window at least as long as the consumer law in the countries you sell to requires.
- Ask for sample orders before you list products, so you know the quality and packaging your customers will receive.
- Blind shipping means the parcel shows your brand, not the supplier's — check the supplier's packing slips before launch.
- Keep stock updates as frequent as possible; overselling out-of-stock items is the most common cause of cancellations.
- Customer data belongs to you: the supplier may use it only to fulfil orders and may not market to your customers.
Sign It Online In Minutes
- Fill in the blanks. Names, dates and amounts go straight into the agreement — the preview shows exactly where.
- Name who signs. Tick “This is me” for your own part. VergeHR builds the PDF with every signature, date and initials box on the right line, and you can check or move anything before sending.
- Send it. Each signer gets a secure link and signs from any device — no account needed. The signed PDF, with an audit trail and a Certificate of Completion, is filed in Files and emailed to everyone.
Dropshipping agreement: frequently asked questions
Who is responsible if a parcel is lost or damaged?
Under this template risk stays with the supplier until the product reaches the customer, so the supplier replaces or refunds lost or damaged parcels and can pursue its own claim against the carrier.
Who pays for returns?
For faulty, damaged or incorrect items, the supplier pays and sends a replacement or credits the full price and shipping. For change-of-mind returns within your returns window, the supplier credits the product price when the item comes back unused, and you pay the return shipping unless the supplier's error caused it.
Will my customers see the supplier's name?
No. The supplier ships blind — packages, slips and inserts show only your brand or none — except where the law or the carrier requires the sender's details.
Can I sign a dropshipping agreement online?
Yes. Electronic signatures are generally valid for ordinary commercial contracts in the US (ESIGN Act and UETA), the UK, the EU (eIDAS) and Canada. VergeHR keeps an audit trail and a Certificate of Completion with the signed PDF.