Small Business - Legalities on Quantity orders

Hello,
I've started a part time company building and selling small drones, such as FX61 Phantoms, multirotors, and custom stuff as needed. (Based on APM/pixhawk, etc)


My question is: I have a customer interested in 10 drones (50 originally, but I can't handle that volume at the moment) I am torn on how to handle this - AFAIK there is nothing illegal about selling them, but that many units makes me wonder if some additional research is warranted? To me, this is a grey area between fun toys and serious hardware. I know the Chinese (and other business) wouldn't bat and eye.

What are your thoughts? Any info is appreciated. I want to grow this business, and would love an order like that - but first and foremost I want make sure I comply with all applicable laws, and don't do anything that would cause myself, others, or the drone community any issues. 

Thanks!

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Replies

  • As long as the customer is based in the States you shouldn't have any issues. Its only if you are exporting the drones to country which is on the US sanctions list or the the parts and technology you are using is on the ITAR list. 

    Ideally for such a bigger order you should demand some payment upfront to fulfil the order and have good set of terms and conditions. 

    You can also ask the person buying the drones who will be End User. 

  • I'm the owner of an FAA Part 145 repair station, and I'm branching into drones business.

    If you intend to grow the business,  at some point,..  you may want to form a legal business and have some form of commercial insurance.

    There are local chamber of commerce and sba.gov  offices that usually offer free counselling.

    I've done it myself.

    Good Luck

  • My two pennies worth - set up bullet proof terms and conditions of sale. Get a lawyer to help you or use one of the standard ones available. Get 100% payment up front before starting any project, buying any materials or even thinking about sending something to the potential customer. Don't offer discounts unless it's to signed-up agents who have established their sales credentials. Never give away samples. We supply stuff to organizations like NASA, ESA, Google etc and even they pay cash up front. Don't be shy about asking for money. If your customer is hesitant then he/she isn't a real customer. If they want to pay a large amount using Dollar bills then walk away. Get payment through electronic bank transfer or one of the large credit card companies. That way you have a legal paper trail. Go and do an MBA. ;-)

  • What is your company name or website?

  • where are you located and where is the customer located?

    • Both in the United States

      • If the customer is not considered a foreign persons, then I don't see the problem from an export perspective. What type of things are you unsure of?

        • I don't know, nothing in particular. Just the current climate of things. Maybe I am just over thinking it. 


          I'm still a novice in this business, and wanted to make sure I'm not missing anything. 

          • Sounds like a good opportunity to me.

            I would suggest you use a purchase agreement that the client signs for this type of order though that spells out things like the return policy, warranty period, and the type of support you will and will not provide and for how long. The customer may decide they want to return all the units after you have spent hundreds of hours building them...in which case I would require at least a restocking fee if not a blanket statement indicating that returns are not accepted for custom builds.

            Also keep in mind that you could potentially be sued if the customer wants to blame you for one of these crashing. It would be good to get some form of liability/product liability insurance if you don't have some already.

            Also, be very very careful not to charge too little for you offerings. Don't forget to take into account things like the time it takes to test, fully document the product, and get all the legal/insurance aspects into place.

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