Table of Contents Hide
- How to Start a Dropshipping Business
- Select a Dropshipping Suppler.
- How to Start Dropshipping Free
- How to Dropship
- How to Dropship from Aliexpress
- Frequently Asked Questions
- Do you need a business license for dropshipping UK?
- Is dropshipping still profitable 2023?
- How does dropshipping work UK?
Dropshipping is a low-cost, simple way to establish a business in the UK. It’s a retail sales strategy in which you make the sale and the manufacturer or supplier sends the merchandise directly to the consumer. Still, thinking of how to start a free dropshipping business in the UK? Here is our guide on how to dropship with AliExpress.
How to Start a Dropshipping Business
Dropshipping is a form of order fulfilment that allows store owners to sell directly to customers without having to keep the physical goods on hand. When a customer orders a product from a dropshipping store, it is shipped directly to them by a third-party supplier. Customers pay the retail price you establish, you pay the wholesale price determined by the suppliers, and the balance is profit. You’ll never have to deal with products or stock up on inventory. You only need to open an account with a supplier to offer the top dropshipping products.
Pick a Dropshipping Business Concept.
The necessary market research is the first step in learning how to start a dropshipping business in the UK. You should examine a niche you’re interested in and make decisions based on how successful it can be. Just like you would if you were building a retail business and researching different locations, competitors, and trends. However, coming up with product ideas to market is difficult.
Shopify curates a list of trending products based on the top-selling product categories on the marketplace. This will help you come up with your next dropshipping business idea. You may also grab the attention of buyers and create traction without competing with larger, established firms by focusing on more niche and trending products.
Niche items often have a more fervent following, which can make selling to specific demographics simpler by raising product awareness. Fitness, fashion, and cosmetic products, as well as gadgets, phone accessories, and yoga-related items, could be excellent places to start dropshipping without spending any money.
Find out your Competitors.
The second step to starting a dropshipping business in the UK is your competition. Now that you know what you’re going to sell at your shop, you should research your competition and learn how they operate. Your competition may have valuable insights into success and can assist you in developing a more effective marketing strategy.
Limit your study to roughly five other dropshipping companies, including one or two big players like Walmart or Amazon. It will assist you in remaining focused and planning your future steps.
You can conduct competition research in a variety of ways, including:
Doing a Google search to find out more.
Utilize competition research tools such as SimilarWeb and Alexa.
Look for Facebook advertising in your niche and see which brands are the most popular. Examine how the company communicates with its customers, how its feed is constructed, and how much engagement it receives—you can even follow the company’s feed to stay up to date. Use this data to figure out how to make your company stand out and improve your social media marketing approach.
Subscribe to the email lists of your competitors.
Join their email list to receive a sneak peek at their marketing plan.
Learn as much as you can about your top competitors’ websites, prices, marketing strategies, product descriptions, and reputation. Keep all of your research in a spreadsheet so you can readily refer to it when making store decisions. If you wish to use email marketing to advertise your business, for example, you can use your spreadsheet to see if your competitors are already doing so and what methods they are employing, all in one spot.
Select a Dropshipping Suppler.
Choosing a dropshipping supplier is an important part of when you decide to start a dropshipping business in the UK. Without suppliers, a dropshipping company would be unable to distribute products to clients and would so cease to exist.
You’ve reviewed the products you want to sell and determined that they’re profitable. Now it’s time to select a dropshipping provider who can provide you with the high-quality service you need to expand. By integrating Oberlo into your online business, e-commerce platforms like Shopify provide a plug-and-play style alternative for identifying potential suppliers.
Oberlo is an online marketplace that makes it simple to find items to sell. You can locate products with strong profit potential from dropshipping suppliers all around the world and add them to your store with a single click, whether it’s electronics, fashion, toys, or other popular items. The software takes care of forwarding orders to your dropshipping provider, so you don’t have to bother about packaging, shipping, or inventory management. And guess what? It’s totally free, to get started.
One thing to bear in mind: if your supplier is from China, try to sell Oberlo products that have ePacket delivery. EPacket is a low-cost shipping method for dropshipping items from China to the United States, the United Kingdom, and Canada. Rather than waiting months for a product from China to arrive, your consumers will just have to wait two weeks or less for a small fee.
Create an Online Store for your Business.
To start a dropshipping business in the UK, you’ll need an e-commerce platform like Shopify or BigCommerce. This is where you will deliver traffic, sell things, and take payments.
An online platform makes it simple to create and launch an e-commerce store. These full-featured commerce platforms let you sell in many locations, including online, in multiple currencies, and manage products and accept payments with ease.
Make a Business Structure Decision.
If you’re serious about your start in the dropshipping business in the UK, you’ll want to establish a legitimate corporate entity. We’re not attorneys, so we can’t provide you legal advice, but we can give you an overview of three typical business structures:
This is the easiest business structure to set up, but it does not insulate you from personal liability. If your company is sued, your personal assets may be at risk as well. The filing requirements are modest, and you simply record the profits from your firm on your personal taxes. There are no additional state or federal business filings necessary.
Limited Liability Corporation (LLC)
By forming your business as a separate legal organisation, you can better protect your personal assets with an LLC. While the liability protection isn’t perfect, it is more comprehensive than that of a sole proprietorship. Additional filing requirements may apply, and you’ll have to pay both the initial and recurrent fees.
Most significant firms are organised as C corporations, which provide the most liability protection when done correctly. Because income does not transfer directly to shareholders, they are likely to be more expensive to incorporate and liable to double taxation.
So, which structure should you go with? We recommend that you seek legal advice before proceeding with any incorporation plans. The majority of small business owners choose between forming a sole proprietorship or forming an LLC. We advise you use an LLC for all of your dropshipping operations. This is because we believe it provides the finest balance of liability protection, financial independence, and costs.
Make a Request for an EIN Number for your Company.
The next step to start a successful dropshipping business in the UK is to register your business. The IRS requires that all businesses obtain an employer identification number (EIN), which functions as a business’s Social Security number. This is the number you’ll need to file your taxes, apply for wholesale dropshipping accounts. You will register a bank account, and pretty much anything else linked to your company.
Thankfully, obtaining an EIN number is simple and free. You can get an EIN number by filling out an online application.
Organize your Finances
When starting a business, one of the most common mistakes entrepreneurs make is combining their personal and business funds. This creates ambiguity, makes accounting more complex, can lead to personal liability for corporate obligations. This is also a major red flag for the IRS if you’re ever audited.
As much as possible, you’ll want to keep your business and personal finances separate. The most effective way to achieve this is to open new accounts in your company’s name.
All of your business’s money should be managed through a single primary checking account. It should be used to deposit all business revenue and to remove all business expenses. Accounting will be easier and cleaner as a result of this.
A company credit card should be used just for business expenses and dropshipping inventory purchases. With the correct rewards travel cards, you may rack up some substantial rewards because you’ll be buying a lot of products from suppliers. We’ve determined that Capital One has the greatest travel rewards programme and that Fidelity Visa/American Express gives the best cash-back programme.
Obtain sales tax.
Only if both of the following are true will you be required to collect sales tax:
- Sales tax is collected in the state where you operate.
- Someone from your state places an order for you.
You will not be required to collect sales tax for any orders placed by residents of other states, even if those jurisdictions levy their own sales tax. There’s a fair likelihood we’ll see changes to these regulations in the coming years, but for now, the tax laws for small online entrepreneurs are very favourable.
If your state levies a sales tax, be prepared to collect it on the small percentage of orders placed by clients from your home state. To register as a retailer and find out how often you must submit the tax you collect, contact your state’s Department of Commerce.
Licenses for Local Businesses
Businesses in most cities and municipalities are required to obtain a business licence, which must be renewed on a regular basis. Dropshipping enterprises, many of which will likely be run from home offices, may have a different need. To understand what, if anything, is required, look into your local rules and regulations.
Promote your dropshipping business.
To start a dropshipping business in the UK you have to be ready to market well. It’s time to market your new dropshipping store now that you know how to create a dropshipping business. When creating your dropshipping company strategy, you may want to put extra effort into your marketing and promotion efforts to stand out in your industry.
Because so much about dropshipping is automated. So, you can focus on marketing and promoting your business in the ways listed below:
Advertisements that are paid (Facebook and Google). The average cost of a Facebook ad is around.97 cents per click, which isn’t awful if you’re new to using the social media network for advertising. Facebook ads are scalable, products can do well on them, and they appeal to people’s desire to buy on the spur of the moment. You can use Google Shopping Ads to target long-tail keywords where customers are more likely to purchase. Google advertising usually have greater pricing competition, but it can be worth your effort to try them out.
Influencer marketing is a term that refers to the use of celebrities As a novice dropshipper, you may only have a small marketing budget. Because people trust influencers more than traditional advertising, influencer marketing is a cost-effective strategy to reach your target demographic. Negotiate an affiliate fee with the influencer rather than a flat charge if you go this route. It’s a win-win situation for both of you because they’ll profit from each sale and you’ll pay less.
Content marketing is a term that refers to the process of add content marketing to your dropshipping business plan if you want to establish a long-term source of visitors for your store. Create content that entertains and educates your target audience by starting a blog dedicated to your dropshipping niche. To assist spread the word about your brand, you may launch a YouTube channel, make infographics, or start a podcast.
Participate in communities of people who are enthusiastic about your niche. On Reddit, Facebook Groups, and online forums, you can start a dialogue with potential customers. When interacting with a community, remember not to be too salesy. Assist and establish relationships with potential clients so that they trust and want to buy from your company.
Mobile marketing is a term that refers to the use of Mobile marketing is a broad phrase that relates to a company’s use of mobile phones to communicate with customers. Start a VIP text club, for example, and encourage website visitors to sign up for special offers and promotions. Alternatively, give customer service using Messenger in a live chat interaction with customers. To grow sales and revenue for your dropshipping business, use a mobile marketing platform like ManyChat to create automated lead generation, customer retention, and cart abandonment campaigns.
Keep track of which channels are working and which aren’t, as you would with any successful internet business—especially if you’re putting money in them, such as paid ads. You can always tweak your marketing plan to cut costs and increase revenue as your company grows and improves.
Examine and improve your service
Now, this is the last step to start a dropshipping business in the UK.
You can start looking at the outcomes of your hard work once you’ve been marketing and managing your dropshipping business for a while. There are integrated software analytics that can assist you in answering several key questions regarding your online store, including:
What are my best-performing channels in terms of sales? Where should I spend more money on advertising? What are the best-selling items in my store? What are the most profitable items to produce and sell? Who are my most valuable clients?
Consumer behaviour: Do individuals buy more on their computers or on their phones? What items and variant SKUs have the highest profit margins? What is the status of my sales and gross income month after month?
You can also use Google Analytics and Search Console to track search traffic over time and optimise your search engine optimization (SEO) efforts with tools like Google Analytics and Search Console. Furthermore, if you’re utilising a third-party programme for social media or Messenger marketing, you should review the data on a monthly basis to ensure that your entire plan is working for your company.
You should develop a data-driven analytics system when starting a dropshipping e-commerce store. Maintain consistency in your analysis across time, and evaluate your store’s performance against well-defined KPIs. This will enable you to make more informed decisions for your store and, over time, move your small business to the next level.
How to Start Dropshipping Free
So, while starting a business does not require a large sum of money, it does necessitate an investment. Time. Everyone would be doing it if you could literally sit and do nothing and then start making money. Nobody would make any money if everyone did it because the market would be so saturated. This brings us to the second item you’ll require. It’s a niche. If you want your offering to be unique, you’ll need something that sets you apart from the competition; you’ll need to give people a reason to buy your product. So here is how to start a free dropshipping business in the UK.
Create a store.
You do, after all, require a store. If you don’t give people a place to shop, how can they buy from you? Isn’t that pretty self-explanatory? There are a variety of platforms on which you can start a free dropshipping business in the UK. eBay, Amazon, and Shopify are just a few of the major players. They frequently offer a free trial to allow you to explore and test the platform to see if it is right for you.
Some of Your Alternatives
eBay – charges a fee when you sell an item. You can list your item and eBay will take a percentage of the sale price. This is contingent on a number of factors. Using a regular auction listing as an example. This is wonderful if you’re want to get rid of an old lawnmower, but not so much if you’re looking to start a business. Other alternatives for selecting prices and other features are available, but unless eBay is hosting a free listing event, they are usually expensive to use.
Amazon – you’ll have to pay a fee for each item sold, as well as some other charges. As previously stated, this is ideal for clearing up your DVD rack, but not so much for selling large quantities. For customers who sell more than 35 things each month, Amazon has introduced a professional account, which requires a monthly subscription fee and eliminates the per-item-sold price.
Shopify (www.shopify.com/contrado-print-on-demand) – pay a monthly fee based on the capabilities you wish to use and the size of your e-commerce business. You have a lot of alternatives with a basic package that starts at $29USD (yes, the price is in dollars even on the UK site), as well as a lite plan and more extensive plans.
But don’t worry, we haven’t forgotten that the focus here is to show you how to start a free dropshipping business on a shoestring budget. We’ll use contrado-print-on-demand Shopify because they have a 14-day free trial. Unlike many other free trials, Shopify allows you to sign up without providing your credit card information. When you sign up for the free trial, the only thing you commit to is receiving marketing emails. There are no hidden fees like the ones we’ve all learned to despise: “if you forget to cancel, we’ll charge you and it’ll be a pleasant surprise”. Contrado will not charge you any fees.
Make an investment of your time
This is the point at which the hard work begins. In certain ways, yes. We’d like to presume that you want to start your own dropshipping business, whether with or without money since you enjoy designing things. According to that logic, this component won’t necessarily be hard work; it’ll be you doing your pastime somewhere other than where you usually do it in order to make a job doing what you enjoy. Whatever you call it, this is the stage when you need to put in the effort and set up your product line.
Contrado has created a custom design interface expressly for this purpose, making it extremely simple to do. You can upload your designs to your chosen product using this tool. You can edit your designs by adding, removing, resizing, repositioning, and adding effects. Their design preview allows you to see precisely how your finished product will look, whether it’s a tea towel or a tea outfit.
Promote your business
Here’s where you’ll have to put in a little extra effort. You must promote your products. It’s great to have them, but without any sort of marketing, you’re essentially dependent on customers ‘dropping’ into your store. There are a few possibilities for doing this, but because this is a ‘how to start dropshipping for guide, we’ll skip any paid advertising solutions. (If you’re not trying to start a dropshipping business with no money, PPC is a good place to start.) That’s paid advertising, which you can do through Google, Facebook, Instagram, and other platforms, and it will specifically target your target demographics).
Social media is an extremely effective instrument. You may have recently seen the storey about the guy from the small bookstore in Petersfield who tweeted about how, for the first time ever, no one had come in. Neil Gaiman, a science fiction novelist, retweeted it, and the small bookstore was flooded with orders. A touching storey that demonstrates the power of social media and why it should be embraced. So, while we may not all be internet friends with Neil Gaiman, we can leverage the power of digital word-of-mouth to promote your work.
It’s as simple as that. Setting up your own Shopify store and connecting it to Contrado is a breeze.
How to Dropship
- Select your products and set them up in your online store
- Reach out to your suppliers
- Register you business and get an employer identification number (EIN).
- Get ready to take orders and send them to your supplier
- Pay for the orders
- Make sure your customers are happy
- Get review from your customers, just so you know where and how to improve.
How to Dropship from Aliexpress
You’ve probably heard of Chinese billionaire or at least his $307 billion-dollar company Alibaba. The came to existence in 1999, as a result of Ma not being able to find Chinese products online readily. The resulting platform has transformed eCommerce around the world by allowing Western buyers to connect with Chinese and Asian suppliers.
The original site, Alibaba, is designed for bulk purchases. The majority of sellers have bulk order minimums. Orders are normally placed online, and payment is usually made via bank transfer. AliExpress is its sibling site, and it accepts credit card payments for smaller businesses that don’t have the things they’re offering. Consider it Amazon, but less expensive and with a two-week delivery schedule.
Dropship from Aliexpress
The key difference between Alibaba and AliExpress is that Alibaba allows you to buy directly from the manufacturer, whereas AliExpress allows you to buy from third-party individuals or corporations who resell to you. You won’t receive the cheapest pricing, but it’s ideal for dropshippers because of the buyer protection and option to make single purchases.
There are 100 million things accessible for purchase. It was founded in 2010 and is owned by Alibaba, based in China, is one of the world’s largest e-commerce companies.
Because the majority of the AliExpress sellers are international producers, you can find trending products at a reduced cost You’ll find anything from women’s clothing and jewellery to gadgets and home decor on AliExpress. If you want to sell items online, it’s a wonderful site to source products.
AliExpress dropshipping makes it simple to select things to sell in your e-commerce business without having to worry about inventory or shipping. By utilising Oberlo to search and add products to your store in only a few clicks, you can start dropshipping on AliExpress for free today.
How to use AliExpress and Oberlo to dropship
- You add the AliExpress products you want to sell to your store.
- You decide on a pricing that includes a markup.
- When you receive an order, you pay wholesale prices for the item.
- Your consumer receives the order directly from the AliExpress merchant.
While AliExpress bills itself as an online retailer, most AliExpress drop shippers recognise that the majority of its customers are resellers who are more interested in dropshipping.
AliExpress also makes dropshipping a breeze. There is no cost or fee upfront, so you can try out things without making a large financial commitment.
Many AliExpress sellers have already product photographs that you can utilise in your store, as well as basic product descriptions. When selling a commodity product, however, don’t overlook the importance of differentiation through positioning and how you polish the small details—usually, it’s worth your time to invest in better photos and handwritten ones.
Finally, dropshipping with AliExpress is as easy as purchasing a product and inputting your customer’s address when they receive their order.
Dropshipping is a terrific low-risk, low-cost option to start selling online, whether you’re a first-time entrepreneur or an e-commerce pro. It’s no longer a hassle to run your business online thanks to the rise of third-party apps and marketing automation tools. Hopefully, like so many other e-commerce entrepreneurs, this dropshipping article will inspire you to pave a road to success and financial freedom, allowing you to live the life you’ve always wanted.
Frequently Asked Questions
Do you need a business license for dropshipping UK?
Dropshipping is completely legal because it is purely a business strategy. This means that you must register your dropshipping business in the UK.
Is dropshipping still profitable 2023?
Dropshipping can, in fact, be profitable for entrepreneurs. Dropshipping is a low-risk business concept that allows you to sell products to clients without paying the high operating costs associated with a wholesaler.
How does dropshipping work UK?
A customer places an order for a product from a dropshipper.
After that, the dropshipper will place an order with their supplier and have the item shipped to the customer who placed the order.
The customer will receive the order from the supplier, but the supplier will never deal with them personally.