Dropshipping Fundamentals 5

Question 1

Why must US dropshippers be aware of sales tax obligations?

Accepted Answer

They may owe tax based on nexus in certain states

Answer

Sales tax is illegal online

Answer

Suppliers always pay it

Answer

Tax only applies to physical stores

Question 2

What is 'nexus' in US e-commerce taxation?

Accepted Answer

A connection to a state that creates a tax obligation

Answer

A type of ad

Answer

A shipping carrier

Answer

A product category

Question 3

Why is selling trademarked or branded products risky in dropshipping?

Accepted Answer

It can lead to legal action and account bans

Answer

They ship faster

Answer

They have no demand

Answer

Suppliers refuse them

Question 4

What is a key benefit of providing excellent customer service in dropshipping?

Accepted Answer

It reduces chargebacks and builds repeat business

Answer

It eliminates supplier costs

Answer

It removes the need for ads

Answer

It guarantees fast shipping

Question 5

Why should a dropshipper order product samples from a supplier?

Accepted Answer

To verify quality and shipping experience firsthand

Answer

To avoid taxes

Answer

To increase ad costs

Answer

To delete competitors

Question 6

What is 'branding' in the context of a dropshipping store?

Accepted Answer

Creating a distinct identity and trust around your store

Answer

Burning a logo onto products

Answer

A type of shipping label

Answer

A supplier contract

Question 7

Why is tracking key metrics like conversion rate important?

Accepted Answer

It shows how well your store turns visitors into buyers

Answer

It is legally required

Answer

It sets the supplier's price

Answer

It increases shipping speed