Are you looking to start a successful dropshipping business in the UK? The UK e-commerce market was worth a massive £129 billion in 2021. The UK presents an attractive location for dropshipping businesses due to its large market, robust infrastructure, high digital connectivity, and widespread use of the English language.
Keep reading our comprehensive guide to dropshipping in the UK in 2023. Our guide will not only give you a better understanding of the processes and best practices, but it will also give you a step-by-step guide to starting a profitable dropshipping business in the UK.
Table of Contents
Dropshipping UK, Is It Legal?
First things first, let’s answer one of the most important questions: is dropshipping legal in the UK? The simple answer is yes. Dropshipping is legal in the United Kingdom. However, as with any business venture, there are some essential restrictions to understand in order for your dropshipping business to operate legitimately in the UK.
The first thing is to ensure that all items you sell in your dropshipping business UK are in compliance with UK consumer laws. For a full and comprehensive list of these laws, go to the GOV.UK website.
One of the most straightforward and best ways to ensure that you remain in compliance with the law and regulations in the United Kingdom is to use a marketplace that facilitates legally finding and selling products within the UK.
Don’t become overwhelmed or put off by legal terminology and documentation. It is not as difficult as you might think and mostly means using your common sense to follow laws and regulations.
Taxation & Business Obligations For UK Dropshipping
Do you live outside of the UK? The first thing to consider when examining how to start a dropshipping business in the UK is whether you are a resident of the UK or not. If you are starting a dropshipping UK business and also live there, you will most likely need to register a company.
If you live outside of the UK, before registering your company, first speak with a local accountant and taxation specialist regarding the legal and tax procedures that would affect you. You will need to also consult with an accountant about the VAT obligations. For example, if you are not from the region and sell within the UK market, shipping even one product means that you are eligible to pay VAT in the United Kingdom.
When dropshipping in the UK, keep in mind that you will have a 20% VAT fee on every purchase. You can add this percentage to every purchase your UK customers make, or buyers can pay this 20% directly to the delivery company. If you are looking to build good customer relations, then it is advisable for you to pay the 20% on their behalf, adding this amount to your purchase price.
For all dropshipping UK-based businesses, there are three main categories of taxes to understand, VAT, Customs Duty, and Income Tax. If you want to be fully confident that you are meeting all business obligations and tax requirements when dropshipping in the UK, speaking with a UK-based accountant or tax expert is the most advisable.
It is essential not only for you to understand your legal and tax obligations but also for your customer. Add a section on your website with a clear explanation of your store policies which includes VAT charges, customs duties, etc.
How to Start Dropshipping in the UK
The UK e-commerce market is estimated to grow to around £266 billion by 2024. High demand and low competition are the ideal conditions for a successful and thriving dropshipping business, and the dropshipping UK market has just that. Keep reading our dropshipping UK guide for all the steps you need to get started.
1. Conduct Product Research
A vital first step is choosing the right products to sell to your UK-based target market. Have you had success dropshipping in the USA or a European-based country? Please do not assume that the products that sell well for you in those markets will get the same results in the UK market.
The best thing to do is conduct product research from scratch for your dropshipping business UK customers. Start by finding out what products are trending in the United Kingdom currently, but also what are evergreen eCommerce favourites.
Spend some time analyzing what the competition offers and what sells. Some key considerations when choosing a product to dropship are:
- Is it legal to sell this product in the UK?
- Is it going to be challenging to sell this product?
- Is it easy to source this product with suppliers?
- Can I make a profit from this product?
- Is this a high-ticket or niche dropshipping item?
You can easily complete your product research with Google Trends UK and by searching dropshipping Ads and undertaking a social media trends analysis.
2. Choose Your Dropshipping UK Supplier
Once you are clear on the rules and regulations of starting to dropship in the UK, next, you need to secure suitable and reliable suppliers.
Although Brexit has impacted dropshipping and online shopping more in general, it mostly means that you need to do a bit more research, especially about selling products outside the UK area.
Although the above may impact what suppliers you choose, the most straightforward thing to do is find dropshipping suppliers within the UK or one that uses ePacket, for example, with cheaper shipping from China. Some of the best suppliers for your dropshipping UK store include:
When choosing a supplier platform, finding one that can easily integrate with your dropshipping store is important. For example, with the Woosa BigBuy WooCommerce plugin, all your dropshipping is automated.
Remember also that you are not limited to one supplier, and it can be beneficial to work with several at the same time. Using more than one supplier means you can compare prices, but it also means that you have a backup if one supplier cannot supply the goods you need.
As your dropshipping business grows, fully automated and streamlined technologies like this will make everything achievable and give you more time to concentrate on business management.
Link your WooCommerce store easily with the plugins from Woosa.com. You can find all WooCommerce plugins that are available for the UK market on this page.
3. Import Products To Your UK Store
Are you ready to start selling on your UK dropshipping store? This is an exciting step for any dropshipper; you are ready to begin importing products to your store.
You can, of course, add products manually, which involves copying all text, images, product information, etc., by hand, one by one. However, this method is not a sustainable approach for the long-term success of your UK dropshipping store.
With WooCommerce plugins for WordPress, this step is super easy. You can easily find and import products based on the desired product categories automatically.
You can import all your chosen products from your supplier to your webstore in very little time. There is no need to update products or quantities constantly. If you like, you can amend and adjust all product information, including images and descriptions, on your own page. Once you are happy with your products, you can apply percentages, making sure that you allow for the correct profit margins.
Everything is automated, including stock updates, which take place in realtime. If your supplier stock runs out, this information will be automatically updated within your store. There is no need even manually to create categories, as they are imported automatically.
It is worth a little effort at the beginning to customize your product listing so you can stand out from your competition and make your listings as appealing as possible.
You can find an overview of all of our UK plugins on this page.
4. Choose Your UK Market Places to get more visitors
Aligning yourself with the most suitable UK selling channels is the next critical consideration when looking at how to start a UK dropshipping business. There is no point in finding the perfect product and a reliable supplier and then not having the right method of selling and promoting your store.
By choosing WooCommerce as the primary selling channel, you can optimise your dropshipping business performance. Some of the top dropshipping channels in the UK include:
- eBay UK
You likely already have some experience with dealing with suppliers as a dropshipper. With eBay, for example, you simply sign up for a free account and start selling as a dropshipper. Because these channels already have a massive amount of traffic, this instantly builds a larger audience for your dropshipping store and maximizes sales.
In February 2023, Woosa released the WooCommerce eBay integration plugin, streamlining the selling process and making an otherwise time-consuming task a lot easier.
Want to use this plugin or one of the other UK dropshipping plugins? Start a free trial today!
5. Market your Dropshipping Business UK
If you have already had experience with dropshipping, you will appreciate how important this next step is. Building a quality brand and marketing your UK dropshipping business means you will not just land new customers, but you will also have a better chance of retaining them in the long term.
What appeals to customers in the United States may not necessarily work as well with UK-based customers, so undertaking extensive market research is vital. Understand who your main competitors are and what they do well or could be better.
Other marketing avenues also worth considering are email marketing and social media advertising. Although one of the more traditional forms of marketing, email marketing is shown to be one of the most successful, it will take some time and expertise to design emails in a way that potential customers will actually open them.
First, you need to build a large database of email addresses. One of the easiest ways to gather email addresses from your UK audience is by running a promotion. All you need to do is specify that receiving a promotion code for a discount, requires an email address to be left by the customer.
Although all elements of a good marketing strategy are important, possibly the most important for a successful dropshipping business are SEO and positioning on Google.
SEO optimization is not as difficult as you might think and takes into account three basic aspects:
- Keyword Research
- Well-thought-out structure
- SEO data, title, meta descriptions, headers, etc
- Internal link building
- Creating blogs
Of course, you don’t need to implement all of these steps at once. For example, creating blogs may take time to produce, but it is well worth it, as it will drive traffic to your dropshipping store.
6. Fulfil Customer Orders
It can not be overstated how important this step is. After putting all that effort into researching and building your dropshipping UK brand, you need to be sure that you can fulfil your customers’ orders to their satisfaction. If not, there will be no profit.
Once your UK dropshipping store is up and running, fulfilling your orders seamlessly is crucial, especially at the beginning stages. There are two ways of fulfilling orders.
Each time you receive an order, you manually complete the order on your supplier website and ship it to your customers/buyers. This method is workable at the beginning stages when you have few orders to fulfill, but it is not realistically sustainable as your UK dropshipping business grows. All your valuable time will be taken up with fulfilling orders rather than growing your business.
Automatic Order Fulfilment
Automation is the answer in the long run. With our WooCommerce plugins for WordPress, virtually every part of the ordering process is automated. When an order is made in your store by a customer, you don’t need to do anything, the order is placed automatically with the supplier, and your products are shipped to your UK customers directly.
You can then track the order via your dropshipping store. Automatic fulfillment not only saves you time but also reduces the chances of human error.
Would you like to have your WooCommerce Dropshipping store up and running in just 7 days? Join the Woocademy 7-Day Challenge.
7. Customer Service
After all the hard work of setting up your UK dropshipping store, the last thing you want is negative reviews. Having no or inadequate customer support could sink your dropshipping business fast.
Unfortunately, customers are far more likely to share a bad review than a good one. Some of the top benefits of good customer support include the following:
- Retain loyal customers
- Customers are more likely to spend more
- Keep a good record with PayPal and other payment systems
- Less time-consuming and costly refund requests
It costs more money to market and find new customers than to retain your current customers, so make sure to put time and effort into your customer service.
There are numerous ways to provide adequate customer service for your dropshipping store. Of course, you can offer more than one choice for your customers if you prefer, including email, live chat, phone support, or social media.
Setting up a dedicated email address for your dropshipping business is easy. Email is the most standard customer service channel and is advisable for all dropshipping stores. You can easily add a template for customers to fill in on your WooCommerce store. When choosing your domain name, it is best to set up your dedicated email at the same time.
Customer service does not need to be boring. Make sure to personalise your dedicated customer support page. Consider adding a FAQ section where customers can easily find an answer to the most common questions. Also, give customers a clear idea of how long it will take for you to respond.
One of the more straightforward customer service tools that you can implement immediately is providing the option to contact you by phone, whether that is through a dedicated phone number or WhatsApp contact, for example. Customers will feel far more comfortable using a dropshipping service, knowing they can speak with someone if needed, building trust with visitors to your site.
One of the significant advantages of having a live chat option is that it will help maximise your productivity and save both your own and your customers time. Dropshipping can be incredibly competitive, and providing live chat and phone customer service support may give you the competitive advantage you need.
AI and chatbot technology advancements have improved dramatically over the past few years. They might be the answer to your customer service needs and even save you money.
Chatbots work by simulating a human conversation using syntax, answering questions, and directing customers to the relevant information. You will have no doubt encountered chatbots yourself regularly.
Using a chatbot to respond to customers’ questions has many benefits. Using a chatbot means that customers don’t have to wait for straightforward queries to be answered. You can also personalise your chatbot, including its name, image, and welcome message.
There are two types of chatbots to choose from, ruled-based or predictive conversation chatbots. General conversation chatbots are far more sophisticated and cost more, and rule-based ones use simple computer programming.
Do you have multiple dropshipping stores? Why not invest some time and learn how to utilise Artificial Intelligence like chatbots for your dropshipping business? Using these intuitive tools presents a great opportunity for your Drop Shipping Business.
Remember that whatever method your customer uses to contact you, always respond as soon as possible and in a professional manner. Put aside time each day for customer service.
FAQ Dropshipping UK
Is the UK a good market for dropshipping?
The eCommerce market revenue is estimated to grow significantly over the next few years. In 2021 the UK eCommerce industry was worth £129 billion and is estimated to reach around £195 billion at the end of 2023. When compared to markets such as the United States, there is far less competition for dropshipping businesses in the UK.
How much money does it take to start dropshipping in the UK?
The cost of starting up a dropshipping business in the UK varies, but you can realistically begin for around £1,000, but it can be started for less. Although you don’t necessarily need a lot of capital to start dropshipping, it does require a lot of hard work and time.
Is dropshipping still profitable in the UK?
Dropshipping in the UK can be very profitable. Like any other eCommerce business setting the right price margins is essential to making a profit. To ensure you meet your targets and make a profit, finding the right product and supplier that will deliver goods as advertised is vital.
For a more in-depth look into how profitable dropshipping in the UK is, check out the Statistica breakdown of eCommerce revenue in the United Kingdom (UK) from 2015 to 2021.
Do dropshippers pay taxes in the UK?
Dropshipping is legal in the United Kingdom, and three main taxes apply, VAT, Customs Duty, and Income Tax. For dropshipping business owners outside of the United Kingdom, getting advice from an accountant is important to ensure you meet all tax requirements under UK legislation.
Hopefully, our comprehensive guide on How to Start Dropshipping in the UK in 2023 has given you the tools and know-how to get started. To sum up, dropshipping in the UK is legal and pretty straightforward, especially if you already have some experience with dropshipping.
Are you a new dropshipper and need some guidance on dropshipping for beginners UK?
Check out our blogs, including How to Start a High Ticket Dropshipping Business!
Here you will find all Woosa plugins that you can use for the UK market.
The market in the UK offers lots of potential for your eCommerce business, with exponential growth and less competition. By automating your dropshipping store, you can save precious time and money that can be better spent on growing and scaling your business to meet your long-term goals.
Want to experience the advantages of all Woosa.com plugins for yourself? Start a free trial today!Check out our awesome WooCommerce plugins >>>