How to Start a Dropshipping Business in the UK? (2024)

Ready to learn how to start a dropshipping business in the UK? You’re in the right place.

Not only have we reviewed countless dropshipping apps, but we’ve also had plenty of experience helping ecommerce business leaders start and run their own dropshipping stores.

If you’re located in the UK, you’re in a fantastic position to take advantage of the benefits the dropshipping business model has to offer.

There are plenty of local suppliers to choose from, and the profit potential can be fantastic (we’ll come back to that in a moment).

Here, we’ll share our step-by-step advice, tips, and insights into starting your own dropshipping business in the UK, and making sure it’s a success.

How Does Dropshipping Work in the UK?

Let’s start with ironing out some of the basics. Dropshipping, as you may already know, is a popular business model, experience significant growth. The global market for dropshipping is expected to exceed $1670.1 billion by 2031, thanks to its ease of use, and the growth of ecommerce.

With this business model, retailers in the UK partner with dropshipping suppliers to sell various products through their online store, all without creating or holding inventory themselves. Instead, the suppliers you work with handle the production of items for you.

Whenever a customer places an order, that information can be forwarded directly to your partner, who packages the product and ships it to your customer.

You only pay for the base cost of the product, and the price of shipping it to your customer. Although profit margins can vary depending on what you pay for your ecommerce platform, marketplace, and marketing campaigns.

With dropshipping, you can source low-cost goods from providers all around the world, and sell your dropshipping products through your own ecommerce store, a marketplace, or even on social media.

The great thing about dropshipping is not only can you access a huge selection of products, but you can build your business with virtually no upfront investment. Plus, there’s very little risk, as you only pay for a product when a customer places an order.

Is Dropshipping Worth It? UK Insights

For many would-be entrepreneurs, dropshipping is a fantastic business model, with very few downsides. You can source all kinds of dropshipping products from reliable suppliers, and hand the complex parts of your business (like fulfilment) over to someone else.

Of course, some countries are better-suited to dropshipping than others.

For a country to be a good environment for dropshipping, it needs a high GDP (so you can find customers with disposable income), great logistics, a large population, and a fantastic online presence.

Fortunately, the UK has all of these things, and then some. It has a fantastic ecommerce market, with a GDP per capita of around $40.3k, and an ecommerce spend per capita of $4,201.

Additionally, while demand for dropshipping is growing globally, the space isn’t as saturated in the UK as it is in the US, which means you may have less competition.

There are also dropshipping suppliers and sites that allow you to source products directly from the UK, so you can ensure quick delivery to your target audience.

On top of all that, you still get the standard benefits all small businesses get from dropshipping, such as:

• Versatility: There are tons of suppliers that ship to the UK worldwide, so you can find plenty of high-demand products to add to your store.
• Low risk: You only pay for goods when your customers buy a product, so there’s very little risk in experimenting with trending products and new ideas.
• Minimal effort: You don’t have to worry about producing, packaging, and shipping products yourself. All you need to think about is running your website and marketing campaigns.

Put simply, yes, running a dropshipping business in the United Kingdom is definitely worthwhile.

Is Dropshipping Profitable in the United Kingdom?

So, how much money can you make dropshipping as a UK business? Ultimately, it’s hard to give a concrete answer to that question.

The money you make from dropshipping will depend on how you set up and run your business, which products you choose, and even the level of customer service you provide.

Even the suppliers you work with, and the quality of your products makes a huge difference. You can find some of our advice on how to find the right dropshipping UK suppliers here.

The good news is that there’s high demand for online shopping in the UK, and less competition than you might find elsewhere.

While there aren’t many studies showing the profitability of dropshipping in the UK, some reports show that the UK has the third-largest market for ecommerce in the world. Online spending in the UK also grew more than 1.6% in 2023.

Additionally, unlike in other parts of the world, dropshipping vendors in the UK can work with local suppliers, capable of fulfilling domestic orders quickly.

This gives you a great opportunity to build a loyal and satisfied customer base.

How Much Does Dropshipping Cost in the UK?

Typically starting a dropshipping business in the UK is much cheaper than launching a standard ecommerce or retail store. That’s because you don’t have to buy any inventory upfront. However, there are still costs to consider. Some of the main ones include:

• Product prices: You still need to pay for the base cost of each product you sell, so make sure you know how much these items cost by researching your supplier carefully.
• Shipping: Shipping fees can vary depending on your partner, the shipping method, shipping speed, and even the location of your customer.
• Ecommerce: If you’re launching your own website, you’ll need to pay a subscription fee for most ecommerce platforms. Check the subscription costs carefully.
• Domain name: You’ll also need to pay for a distinct domain name, although some ecommerce platform include access to a domain name for free for the first year.
• Dropshipping fees: Some dropshipping apps and vendors charge a fee to use their service, while others allow you to access the tools for free.
• Marketing: Remember to invest in marketing to ensure your dropshipping business attracts plenty of customers.

Tax Requirements for Dropshipping Companies in the UK

One thing we notice when working with ecommerce vendors, is that many forget dropshipping is still a type of business. Just because it’s easier to run a dropshipping store than a standard store, doesn’t mean you don’t need to follow the basic rules of your country or state.

You still need to set up a company, either as a sole trader, limited liability company, or partnership, depending on your requirements. Business owners can find more information about this by checking out the HMRC website. You also still need to pay taxes, just like any other UK company.

You’ll have to keep records of your business revenue and costs, send a self-assessment tax return to the government every year, and pay:

• Income tax
• VAT (if registered)
• Customs duty (for international sales)
• Class 2 and class 4 National Insurance (depending on your business)

Even if you’re living outside of the UK, but operating your dropshipping business in the region, it may still be worth registering your company. It’s worth consulting with an accountant to see exactly what you need to do to stay on the right side of the law.

For instance, if your taxable turnover exceeds £85,000, then you’ll need to register for VAT automatically, which means you might need to charge extra for your products.

How to Start a Dropshipping Business in the UK

Getting your head around concepts like taxes and VAT can be complex, but once you handle that part of launching your online business, the rest of the process for starting a dropshipping store can be quite simple. Virtually anyone can launch a dropshipping startup with minimal effort.

However, there are a few key steps you need to take to make sure your business is a success. Here’s a step-by-step guide to launching your company, based off our own experience in the dropshipping world:

Step 1: Conduct Product Research

There’s a lot of freedom in starting a dropshipping store. With suppliers located all over the world, offering products in a host of categories, you can serve just about any niche. The key to success is knowing which products you should stock.

First, we recommend choosing a specific niche to focus on. The smaller your niche, (such as eco-friendly clothes, or sustainable pet products), the less competition you’ll have. Next, start looking into products that offer great potential for profits.

You can check out tools like Google Trends, or use a search engine optimization tool like SEMRush to find out what kinds of products are earning the most attention. Some dropshipping apps, like AutoDS, even have their own product research tools built-in.

It’s also worth checking out what the top-trending products on competitor websites are. This will help you ensure you’re investing in products with sale potential.

Step 2: Find Your UK Dropshipping Supplier

Once you know what you want to sell, it’s time to find a supplier. You have a few options here. You can work with low-cost dropshipping companies in regions like China, to keep your costs low, or you can focus on working with local suppliers to speed up delivery times.

There are plenty of dropshipping platforms to choose from, including AliExpress, DSers, and AutoDS. The best way to find the right solution for you is to think about:

• Pricing: What’s the average wholesale price or base cost of the products offered by your supplier? How much do you need to pay for a subscription to the platform?
• Product range: The best suppliers should have a range of products to choose from, specific to your niche and chosen market.
• Product quality: High quality products will ensure you can convert more customers, and potentially retain their loyalty over time.
• Shipping factors: A good dropshipping supplier will offer fast shipping times, and excellent order fulfilment services. They might even offer customizable packaging.
• Customer service: The better the customer service offered by your vendor, the better you’ll be able to serve your customers. Like for a responsive team.
• Integrations: Does your dropshipping supplier offer apps that integrate with your online marketplace (Ebay, Etsy, or Amazon), or ecommerce platform?

You can also check out reviews and testimonials from other companies for insights. Alternatively, check out all the dropshipping supplier reviews we have on this website.

Step 3: Choose your Sales Channel

Next, you’ll need to decide how you’re going to list and sell products. There are a few options available here. If you’re starting off relatively small, you might consider selling products through social media apps, and channels like Facebook Marketplace.

If you’re looking to scale, you can choose between an online marketplace, and designing your own website. A marketplace like Amazon and Ebay gives you access to a range of customers from different environments instantly, but the competition levels can be quite high.

Alternatively, when you build your own website, you’ll be responsible for building, customizing, and managing your store, as well as seeking out potential customers.

You do have better opportunities to brand your business, and retain control over your company.

Remember, you can always use a combination of both marketplace sales and sales from your ecommerce store to increase your revenue.

Step 4: Add your Products to your Storefront

Now it’s time to list your product on your website or marketplace storefront. Some dropshipping suppliers will require you to do this manually. However most solutions come with apps for Shopify, Wix, WooCommerce, and even marketplace channels to help you.

These tools save you a lot of time importing product information, pictures, and details directly to your store or product pages. Notably, no matter whether you’re adding your products manually or automatically, it’s important to make sure you:

• Include incredible images: The better your images are, the more likely you’ll be to attract and convert customers. You can even consider adding product videos to your pages.
• Share all the right information: Include information about shipping, returns, product details, sizes, and anything else your customers need to know.
• Write compelling product descriptions: Invest in writing high-quality descriptions that showcase your brand personality and highlight the benefits of each product.

Step 5: Marketing your Dropshipping Store

While it’s true that dropshipping suppliers handle some of the toughest aspects of managing your business for you, like fulfilment and production, they don’t do everything. You still need to promote your online business to ensure you’re getting as much traffic to your store as possible.

Fortunately, there are tons of different ways to get started, such as:

• Paid advertising: PPC ads and paid promotions on social media can generate instant attention to your online store. You can even promote listings on channels like Ebay.
• Social media: Social media marketing, from posting images of your products, to working with influencers on campaigns is a great way to drive demand for your solutions.
• Content creation: Blogging is a fantastic way to boost your SEO rankings, which means you’ll be more likely to appear on the search engine result pages.
• Email marketing: Connecting with customers through email is a great way to increase sales, and also improve your chances of long-term, repeat customers.

The right marketing strategy for you will depend on your target audience and business. For instance, if you’re running a company targeting younger customers, a strong presence on TikTok and Instagram, along with some influencer marketing campaigns can seriously boost your sales.

Step 6: Fulfil Orders and Deliver Customer Service

Finally, once you’ve begun attracting customers to your product listings, it’s crucial to make sure you have a strategy in place for fulfilling each order as promptly as possible. Using a dropshipping supplier with an app that integrates with your store or marketplace can help here.

It ensures you can automatically transfer order information to your supplier as it comes through. Plus, many tools also allow you to access tracking numbers so you can monitor the progress of your customer’s order, and answer any questions they might have.

It’s also crucial to make sure you’re prepared to deliver exceptional customer service. Most dropshipping companies won’t handle returns and refunds for you, or answer customer questions. Think about how you’re going to serve your buyers and boost their satisfaction rates. For instance, can you use a live chat app or chatbot for consistent support?

Can you create an FAQ page for your website, or respond to requests via email or phone call? Are you going to have a customer service team on social media?

Tips for Starting a Successful Dropshipping Store in the UK

Now you know how to start a dropshipping business in the UK. But we’re not going to leave you there. We know how difficult it can be to launch a new company and make sure it’s successful. With that in mind, here are our top tips for dropshipping retailers in the UK.

Tip 1: Choose the Right Ecommerce Platform

While you can sell your dropshipping products through marketplaces, we do recommend setting up your own store if possible. It’ll give you more control over your brand, marketing strategies, and your ability to grow. Of course, you’ll need to choose the best ecommerce platform for your needs.

We advise picking one that already integrates with a variety of dropshipping tools, offers a user-friendly environment, and is reasonably affordable. We’ve covered all of our top favourite UK ecommerce platforms here, but here are some of the best options to consider:

• Shopify: Our number one pick for dropshippers in the UK, Shopify is one of the simplest and most versatile tools on the market. It comes with built-in marketing and SEO capabilities, excellent templates for building your online store, and tons of dropshipping apps to choose from. Plus, it supports omnichannel selling too.
• Wix: For ease of use, Wix is a clear winner. It’s extremely straightforward, with built-in AI tools to help you build and optimize your store. Wix also integrates with various dropshipping and print on demand platforms. Plus, it comes with tools for improving your marketing and sales strategies – all for an affordable price.
• WooCommerce: If you’re looking for a little more control over your site, WooCommerce and WordPress are a great choice. You’ll need to manage hosting yourself, but you’ll have access to tons of themes, templates, and add-ons you can use to boost your store’s success.

Tip 2: Consider Suppliers Carefully

We mentioned above that choosing the right supplier is one of the most important steps in making your dropshipping business a success. While there are a number of factors that can influence your decision of which supplier to work with, we recommend putting product quality and customer service first. Where possible, consider choosing a supplier with UK warehouses and vendors, such as:

• Avasam: A fully-automated dropshipping platform with all the tools you need to sell high-quality products, based in London. They also have relationships with suppliers across the UK.
• AutoDS: One of the top dropshipping apps available, AutDS offers instant access to a wide range of suppliers both inside and outside of the UK. Plus, they have a great tool to help you find trending products for your store.
• Syncee: An excellent B2B platform for dropshipping, retailers, and suppliers, Syncee offers access to a handful of suppliers form the UK, and a great range of products.
• CJDropshipping: A fantastic all-in-one solution for sourcing and shipping dropshipping products, with warehouses in regions all over the world – including the UK.

Tip 3: Make Life Easier for your Customers

While your dropshipping partner will handle customer orders for you, it’s important to ensure you’re delivering an excellent level of customer support, and great user experiences. We recommend starting with your website, ensuring it’s easy for customers to find the right products with simple navigation.

Share transparent delivery and returns information with all of your customers, and make sure you pack your website full of useful insights into your products. Additionally, it’s worth making the checkout experience on your ecommerce website as streamlined as possible.

Consider offering a range of payment methods to suit different customers. For instance, in the UK, around 20 million people use PayPal to shop every year. Mobile wallets like Google Pay and Apple Pay are becoming pretty popular too.

Don’t forget to implement a strategy for responding to customer queries and questions. Whether it’s adding a chatbot to your website or just offering email support, you need to give your customers some way to get in touch with you.

Launching your UK Dropshipping Business

Dropshipping in the UK can be an excellent way to make a consistent income and develop your new business. While dropshipping has a low barrier to entry, there are still various factors you’ll need to consider. Use the tips in this article (and our other guides) to boost your chances of success.

Remember, it’s also a good idea to keep an eye on the product trends and behavioural changes of your target audience over time. Staying up to date with the market will give you an edge on the competition.