Drop Shipping Services Agreement Between Merchant and Fulfillant

This Drop Shipping Services Agreement (the “Agreement”) is entered into as of [Effective Date] (the “Effective Date”) by and between:

Merchant: [Full Legal Name of Merchant], a [Entity Type] with a principal address at [Merchant’s Address] (the “Merchant”); and
Fulfillant: [Fulfillant Legal Name], a leading global e-commerce logistics provider with a principal address at [Fulfillant’s US Address, e.g., California], operating under the brand name Fulfillant (the “Provider”). For more details on Fulfillant’s services, visit their official website here.

Collectively, the Merchant and Provider are referred to as the “Parties.”

H2: Recitals

WHEREAS, the Merchant operates an e-commerce business selling [Merchant’s Product Category] through one or more sales channels (e.g., Shopify, Amazon, TikTok Shop);
WHEREAS, the Provider offers comprehensive dropshipping fulfillment services, including automated order processing, real-time inventory synchronization, global shipping, and returns management, with strategically located warehouses across North America, Europe, Asia, and other continents;
WHEREAS, the Merchant wishes to engage the Provider to handle fulfillment of customer orders, and the Provider wishes to provide such services, subject to the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants and promises contained herein, the Parties agree as follows:

H2: 1. Scope of Services

The Provider shall provide the following dropshipping fulfillment services to the Merchant (collectively, the “Services”):

H3: 1.1 Order Processing

Automatically receive and process customer orders from the Merchant’s integrated sales channels (as listed in Exhibit A) via the Provider’s proprietary Warehouse Management System (WMS), launched in 2019 and updated with AI-driven capabilities.
Validate order details (e.g., customer shipping address, product SKU, quantity) and notify the Merchant of any invalid or incomplete orders within 1 business hour of receipt.

H3: 1.2 Inventory Management

Maintain real-time synchronization of inventory levels between the Provider’s warehouses and the Merchant’s sales channels, including automated low-stock alerts sent to the Merchant when stock reaches a threshold agreed upon by both Parties.
Conduct regular inventory audits (monthly full audits, weekly spot checks) to ensure accuracy and resolve discrepancies within 3 business days of discovery.

H3: 1.3 Picking, Packing, and Shipping

Pick, pack, and ship customer orders in compliance with industry standards and the Merchant’s branding requirements (as outlined in Exhibit B).
Ship orders received before 2:00 PM local time (at the applicable fulfillment warehouse) on the same business day, in accordance with the Provider’s “Lightning-Fast Processing Speed” commitment.
Select cost-effective, reliable shipping carriers for domestic and international orders, and provide the Merchant and end customer with tracking information within 2 hours of shipment.
Prepare all necessary customs documentation for international orders to minimize delays at border control.

H3: 1.4 Custom Branding

Fulfill orders using custom branded packaging, inserts, labels, or promotional materials as specified by the Merchant, subject to additional fees outlined in Exhibit C.

H3: 1.5 Returns Management

Receive and inspect returned products from end customers, in accordance with the Merchant’s return policy (as provided to the Provider in writing).
Notify the Merchant of returned items within 2 business days of receipt, including details on condition, reason for return, and recommendations for restocking, disposal, or return to the Merchant.
Process refunds or exchanges on behalf of the Merchant, as authorized in writing by the Merchant.

H3: 1.6 Dedicated Account Support

Assign a dedicated account manager to the Merchant to address questions, resolve issues, and provide strategic fulfillment advice. The account manager shall be available during standard business hours (9 AM – 5 PM local time) via email, phone, or video call.

H2: 2. Merchant Obligations

The Merchant shall:

H3: 2.1 Order and Product Accuracy

Provide accurate, up-to-date product information (e.g., SKUs, descriptions, weights, dimensions) to the Provider, and promptly notify the Provider of any changes to product specifications.
Ensure all customer orders submitted to the Provider are complete and accurate, including valid shipping addresses and payment confirmation.

H3: 2.2 Compliance with Laws

Comply with all applicable federal, state, and international laws, regulations, and industry standards related to the sale of its products, including but not limited to consumer protection laws, labeling requirements, and export/import regulations.
Indemnify the Provider against any claims, fines, or liabilities arising from the Merchant’s violation of such laws or the sale of infringing, defective, or unsafe products.

H3: 2.3 Payment of Fees

Pay all fees outlined in Exhibit C (Pricing and Payment Terms) in a timely manner, in accordance with the agreed-upon payment schedule.
If utilizing the Provider’s Business Credit Solutions (flexible financing or net payment terms), comply with the terms outlined in the supplementary Business Credit Addendum (Exhibit D).

H3: 2.4 Sales Channel Integration

Ensure all sales channels are properly integrated with the Provider’s WMS, and maintain access to such channels to facilitate order synchronization and inventory updates.

H2: 3. Provider Obligations

The Provider shall:

H3: 3.1 Service Quality

Perform all Services with a high standard of care, utilizing experienced staff and advanced technology (including AI-driven fulfillment solutions) to ensure efficiency and accuracy.
Meet or exceed the order fulfillment metrics outlined in Exhibit E (Service Level Agreements), including same-day shipping rates, inventory accuracy rates, and order processing timeframes.

H3: 3.2 Data Security

Protect the Merchant’s and end customer’s confidential information (e.g., order details, personal data) in compliance with applicable data privacy laws (e.g., GDPR, CCPA) and the Provider’s internal security policies.
Not disclose or use such information for any purpose other than performing the Services under this Agreement.

H3: 3.3 Transparency

Provide the Merchant with monthly reports detailing order volume, fulfillment costs, inventory levels, and return rates, accessible via the Provider’s customer portal.
Notify the Merchant of any anticipated delays in order processing or shipping (e.g., due to carrier disruptions, warehouse maintenance) within 4 hours of discovery.

H2: 4. Pricing and Payment Terms

H3: 4.1 Fee Structure

The Merchant shall pay the Provider for the Services as outlined in Exhibit C, which includes:

Fulfillment fees (picking, packing, labor) per order;
Shipping costs (based on carrier rates, destination, and package weight/dimensions);
Custom branding and packaging fees (if applicable);
Returns processing fees (per returned item);
Additional fees for special services (e.g., expedited shipping, bulk order handling).

H3: 4.2 Payment Schedule

Invoices shall be issued on a monthly basis, due within [30] days of the invoice date (or net terms as agreed in Exhibit D for Business Credit Solutions users).
Late payments shall be subject to a penalty of [1.5%] per month on the outstanding balance, or the maximum rate allowed by law, whichever is lower.

H2: 5. Term and Termination

H3: 5.1 Initial Term

This Agreement shall commence on the Effective Date and remain in effect for an initial term of [12] months.

H3: 5.2 Renewal

The Agreement shall automatically renew for successive 12-month terms unless either Party provides written notice of non-renewal at least [30] days prior to the end of the current term.

H3: 5.3 Termination for Cause

Either Party may terminate this Agreement immediately upon written notice if the other Party:

Fails to perform any material obligation under the Agreement and does not cure such failure within [15] days of receiving written notice;
Becomes insolvent, files for bankruptcy, or ceases to operate its business.

H3: 5.4 Post-Termination Obligations

Following termination, the Provider shall fulfill all outstanding orders received prior to the termination date, and return any remaining inventory to the Merchant (at the Merchant’s expense) within [30] days of termination.
The Merchant shall pay all outstanding fees owed to the Provider for services rendered up to the termination date.

H2: 6. Confidentiality

Both Parties agree to keep confidential all non-public information disclosed during the term of this Agreement, including but not limited to pricing, customer data, business strategies, and product specifications. This obligation shall survive the termination of the Agreement for [3] years.

H2: 7. Intellectual Property

The Merchant retains all rights, title, and interest in its intellectual property, including but not limited to trademarks, logos, product designs, and brand names.
The Provider may use the Merchant’s intellectual property solely for the purpose of performing the Services under this Agreement, and shall not reproduce, modify, or distribute such property without the Merchant’s prior written consent.

H2: 8. Limitation of Liability

IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, PUNITIVE, OR SPECIAL DAMAGES (INCLUDING BUT NOT LIMITED TO LOST PROFITS, REVENUE, OR CUSTOMER GOODWILL) ARISING OUT OF OR RELATED TO THIS AGREEMENT, REGARDLESS OF THE THEORY OF LIABILITY.
THE AGGREGATE LIABILITY OF THE PROVIDER TO THE MERCHANT FOR ANY AND ALL CLAIMS ARISING OUT OF THIS AGREEMENT SHALL NOT EXCEED THE TOTAL FEES PAID BY THE MERCHANT TO THE PROVIDER DURING THE [12] MONTHS PRECEDING THE CLAIM.

H2: 9. Governing Law and Dispute Resolution

This Agreement shall be governed by and construed in accordance with the laws of the State of California, without regard to its conflict of laws principles.
Any dispute arising out of or related to this Agreement shall first be resolved through good-faith mediation between the Parties. If mediation fails, the dispute shall be resolved by binding arbitration in the County of Los Angeles, California, in accordance with the rules of the American Arbitration Association.

H2: 10. General Provisions

H3: 10.1 Entire Agreement

This Agreement, including all exhibits attached hereto, constitutes the entire agreement between the Parties and supersedes all prior oral or written agreements or understandings relating to the subject matter herein.

H3: 10.2 Amendments

No amendment to this Agreement shall be effective unless it is in writing and signed by both Parties.

H3: 10.3 Notice

All notices required under this Agreement shall be in writing and delivered via email (to the contact addresses provided in Exhibit A), certified mail, or courier, and shall be deemed received upon confirmation of delivery.

H3: 10.4 Severability

If any provision of this Agreement is found to be invalid or unenforceable by a court of competent jurisdiction, the remaining provisions shall remain in full force and effect.

H3: 10.5 Assignability

The Merchant may not assign this Agreement without the prior written consent of the Provider. The Provider may assign this Agreement to a successor or affiliate, provided that the Provider notifies the Merchant in writing of such assignment.

H2: 11. Exhibits

The following exhibits are attached hereto and incorporated into this Agreement:

Exhibit A: Merchant Sales Channels and Contact Information
Exhibit B: Custom Branding and Packaging Requirements
Exhibit C: Pricing and Fee Schedule
Exhibit D: Business Credit Solutions Addendum (if applicable)
Exhibit E: Service Level Agreements (SLA)

H2: 12. Acceptance

By signing below, the Parties acknowledge that they have read, understood, and agreed to the terms and conditions of this Agreement.

H2: Additional Resources for Merchants

For more guidance on setting up your dropshipping partnership with Fulfillant, including tutorials on integrating sales channels and optimizing fulfillment workflows, check out Fulfillant’s official YouTube channel here. This channel offers step-by-step videos, case studies, and expert tips to help you maximize the value of your fulfillment services agreement.