Setting UpTop Tips to Consider Before Starting a Drop-Shipping Business

Top Tips to Consider Before Starting a Drop-Shipping Business

Are you looking for a relatively cost-efficient and easy way to start a business? Well, you may bet on drop-shipping. This profitable business model doesn’t require you to hold hefty stocks. Besides, your overheads are notably low. Best of all, with the boom in e-commerce markets in Europe, drop-shipping businesses are also enjoying a steep ride of growth.

However, apart from top-notch products, reliable suppliers, and accessible selling channels, you need a solid strategy to capitalise on the fantastic opportunity the UK drop-shipping industry offers. Keep reading and learn nine smart tips on how to start drop-shipping UK.

1.  Carry Out Product Research

When it comes to jumpstarting a drop shipping business in Uk, finding the right products is paramount. Your products should align with your customer needs and preferences of the market. Remember, in drop-shipping, the usability of a particular product always overweighs its appeal. Wrong items won’t bring you sales.

Hence, pay adequate attention while conducting product research. You can follow two basic means for product research: search for product trends on supplier websites or look for what other stores are selling.

Try finding out the best-selling items, and once you identify them, you can consider offering them in your drop-shipping store. Furthermore, you can bolster your store’s offering by recreating other stores’ success.

2.  Choose the Best E-commerce  Platforms

It’s worth keeping in mind that your e-commerce platform works as the foundation of your drop-shipping business. You can build, design, and manage your drop-shipping store by leveraging these platforms. Hence, always pick up a trustworthy platform with great features and services. The following are some viable choices to consider –

BigCommerce: This all-rounder e-commerce platform lets you offer a curated customer experience. Implementing Google Cloud Platform infrastructure and Akamai Image Manager, BigCommerce allows you to develop scalable, agile, and functional stores. The platform offers affordable pricing plans. Besides, you can leverage its free trial to taste the water.

Shopify: Whether it’s drop-shipping clothing or jewellery drop-shipping UK –  Shopify can serve as the one-stop solution. This affordable and beginner-friendly platform guarantees scalability and value. Furthermore, its speed and security are impressive. Leveraging Shopify, you can modify or build your e-commerce store using your mobile. Additionally, the platform offers adequate resources and apps to develop highly functional drop-shipping stores.

The platform features over 100 payment gateways, a bespoke product management system, and numerous professional themes. Moreover,  the company houses a resolutive customer support team that’s open to help you with your queries and grievances 24×7.

WooCommerce: WooCommerce stores are highly admired for their outstanding search engine optimization process. Besides, WooCommerce stores are usually customizable and flexible. This open-source software allows you to alter your hosting part, guaranteeing holistic control over your drop-shipping store. What’s more, WooCommerce works by leveraging WordPress, and it’s free. You just need to pay for the web hosting.

3.  Choose the Right Payment Gateways

Offering your customers their preferred payment alternatives may help you increase your drop-shipping store’s popularity. You may consider the following payment gateways as they have earned hefty popularity in the UK market.

PayPal: A 2019 survey says that 49% of online store users in the UK prefer PayPal. Considering these statistics, you should include PayPal in your payment method.

Cards: Debit and credit cards are the second most preferred payment modes for online shopping in the UK.

Digital Wallets: Though digital wallets are less used alternatives, they are gradually becoming popular.  Hence, you can integrate them into your drop-shipping store.

4.  Get a Cost Estimation

If you are starting a drop-shipping business in the UK, it’s always wise to get the right cost estimation. Starting with the domain, there are several areas that you need to consider for making a budget. You may need to pay for hosting, drop-shipping apps, drop-shipping suppliers, etc. Furthermore, you may need to allocate a dedicated budget for marketing. It’s crucial to develop well thought marketing strategies to run a successful drop-shipping business. Indeed, you may need to invest a considerable amount in result-driven marketing, but it’s worth it.

5.  Choose the Right Supplier

Before starting your drop-shipping business, you should essentially learn how to find drop-shipping suppliers. Choosing the right suppliers is as important as choosing the right platform. Take a look at our article on finding drop shipping suppliers or start with the following three UK-based drop-shipping suppliers.

Syncee: This B2B platform connects suppliers, retailers, and dropshippers. While Syncee has some non-UK suppliers, the platform lets you find some reliable UK-based drop-shipping agencies. Syncee features a functional location filter, auto order, etc. For online stores with more than 25 published products, Syncee offers free access.

Avasam: This automated platform allows you to access effective tools for sourcing and selling world-class products. Based in London, Avasam has partnered with numerous UK-based suppliers. You can integrate Avasam with various e-commerce marketplaces. Besides, it sports a justified pricing model and an empathetic customer support team.

Clothes2order: As the name suggests, this platform may be ideal for an apparel niche store. Clothes2order is a retailer. Besides, they offer a dropship API for people who want to resell their products. The platform is highly appreciated for its quick shipping, and you don’t need to pay anything for using Clothers2order dropship API.

6.  Choose Your Products Carefully

While drop-shipping relieves you from the lengthy and complex process of storing and shipping products, you should be extra careful with product selection. Remember, the wrong choice of products may bring you nightmares. When you choose to dropship, you should carefully avoid the following products.

Patented goods: Contrary to popular belief, patented products are not great for drop-shipping. Such goods are knock-offs; hence, they may involve you in serious legal hassles. Besides ruining your online reputation, it may make things more complicated.

Heavy and fragile items: Heavy goods are hard to lift, and due to this reason, they make the entire delivery process pricier and more complex. On the other hand, Fragile products always involve a high risk of damage.

Complex gizmos: The idea of updated gadgets may seem lucrative. However, your customers may expect to receive functional and error-free products. In drop-shipping, it’s virtually impossible to test the product’s quality and efficiency. Therefore, you should wisely avoid high-tech items that demand thorough analysis before reaching your customers. 

7.  Product Listing

Importing your products from your supplier pages to your selling platform is crucial. You may find it pretty daunting to enter data manually. Thus, you may turn to automatic entry leveraging automation software. This will help you save time and effort. Besides, there will be the slightest chance of wrong or duplicate entries.

8.  Learn How to Fulfil Orders

Before making your drop-shipping store live, learning how to fulfil your orders properly is essential.  When your buyer places an order, enter the details (order and shipping) on your suppliers’ website. You may count on a virtual assistant for efficient and convenient entries when receiving numerous orders. You can even use automatic order fulfilment software for added efficiency and agility. However, they may be a little costly.

9.  Set Up a Company

Before you kickstart your drop-shipping venture, developing the appropriate drop-shipping mindset is crucial. You should be aware of a few things before putting your thoughts into action. The most important among them is knowing that you will develop a true business. drop-shipping can’t be a quick money-making store.

Like other e-commerce businesses, drop-shipping also focuses on maximising your profits by selling as many products as possible. Hence, you must set up a company to hit a specific revenue volume. Ideally, register your company as a sole trader, as it makes account management extremely easy.

However, to register your company as a sole trader, you must show more than £1000 in earnings in a financial year. When you manage to register as a sole trader, you should start paying income tax on your profits. Besides, you will need to pay Class 2 and Class 4 National Insurance. Furthermore, you will have to send a yearly self-assessment tax return.

People Also Ask

1.   How does the drop-shipping business model work?

A drop-shipping business model refers to a retail fulfilment method. When you start your own drop-shipping business, you don’t need to keep products in stock and you don’t need to worry about inventory management. Instead, you can purchase specific items from a third-party vendor and ship them directly to the customer. You can buy the items at wholesale price and work with lucrative profit margins.

Aspiring entrepreneurs can consider drop-shipping as it allows you to test various business ideas with limited downside. Consequently, you can learn and develop a result-driven drop-shipping business plan. Best of all, you don’t need a huge capital to start a drop-shipping business. Besides, it involves low overhead and is flexible on location.

2.   Is a niche store better for drop-shipping?

Yes, it is! Launching a niche store allows you to find your target audience effortlessly. Besides, niche stores rank better in search engines. On the other hand, generic stores lack flexibility, eliminating room for competitive advantages.

3.   How does drop-shipping tax UK work?

When you have registered your drop-shipping business, you must pay a dedicated tax for customs duty. It’s typically 2.5% of the product’s cost. However, items that cost more than £630 may include special rates.

Wrapping Up

When done rightly, drop-shipping can be a true deal of profit. Don’t hesitate to follow the valuable tips mentioned in this drop-shipping UK guide to cherish a successful and money-making venture. Good luck!

Written by

Mark Hodgson
Mark Hodgsonhttps://gosmallbusiness.co.uk
Mark Hodgson is one of our expert writers. Mark is our lead researcher and editor who writes our main guides and expert topic coverage. He’s passionate about helping entrepreneurs, startups and small businesses with practical advice delivered clearly. Mark’s worked for a number of business magazines and titles and has started two small businesses himself, so has first-hand experience in setting up, managing and growing a small business and shares his expertise with our readers.

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