As more and more of the world goes digital, businesses and buyers have also taken a similar path. The dropshipping business model has steadily gained popularity all over the world. UAE is a business hub that has not fallen behind and adopted this change happily.
Dropshipping in UAE is a highly lucrative opportunity that many are turning to. However, despite the seemingly simplistic model that will potentially generate easy money, it takes some solid effort to establish a successful dropshipping business.
Read on to find everything you need to know about dropshipping in UAE.
What Is Dropshipping and What Does It Entail?
Dropshipping is an order fulfillment method in which sellers rely on third-party sellers to manage their orders and customer service. As a dropshipper, your job is to maintain an online store where you can market the products you source from different sellers. You should be able to deal with customers and maintain customer satisfaction efficiently. This will include processing returns, refunds, and exchanges.
Dropshippers are basically mediators who earn commissions from the sale of items that are sold with a slight profit margin. A dropshipping business is a low investment as the stocking and shipping of products are managed by your supplier, which means you save on warehouse rental costs, packing costs, and shipping costs. Dropshippers also do not need to buy products in bulk and pay the supplier only when a sale is made.
However, these advantages mean many people are dipping their toes into the dropshipping business, so competition is high.
How to Start Dropshipping in UAE?
Here’s a step-by-step guide to starting a successful dropshipping business in UAE:
1. Select A Product Niche
It is always better to choose a product type to sell to filter out excessive competition. To select a niche, you must conduct intense market research into the local buying trends. Knowing local market demands can help you narrow down the most in-demand, profitable products with a high selling rate. If possible, keep a keen eye on small business owners with unique products.
For foreigners planning to run dropshipping businesses in the UAE, a business consultant like Idea Bizone can help. You should also opt for products with low shipping costs, as high shipping costs tend to repel customers shopping online.
2. Pick The Right Supplier
As a dropshipper, you will be answerable to customers for timely deliveries and product quality despite all this being out of your hands. It is essential to choose reliable suppliers.
You can look for suppliers through supplier bases like Alibaba and AliExpress. By reading through customer reviews, you can determine the quality of products and delivery times of the supplier. Look for dropshipping suppliers in UAE or nearby to cut down on shipping time and costs.
You can also test the product quality and delivery times of a supplier by ordering from them yourself. This will reduce the risk of ruining your business’s reputation due to mishandling from the supplier’s side.
It is also wise to thoroughly interview your supplier, including delivery time, and return and refund policies. Make sure to negotiate a profitable deal for both you and the supplier.
3. Secure A Dubai Trade License
A common question among prospective dropshipping business owners is: is dropshipping legal in UAE? The answer is: not if you don’t have the relevant trade license. Running a dropshipping business without a license from the Department of Economic Development can result in heavy fines.
Luckily, UAE has a very trade-friendly environment due to the efforts of its government. You can apply for a trade license using these steps:
– Choose Your Business Activity
While applying for a trade license, you need to choose the right category for the type of business activities you will be performing. There are over 2000 options for business activities to choose from. Make sure to cover all business activities to get a valid license that will allow you to run your business worry-free.
– Register Your Company Name
Your business’s name is an essential part of its identity and will play an important role in future marketing. Come up with a relevant and unique name but make sure your company name does not offend any local customs. Avoid any religious or culturally offensive language. It is recommended to consult an expert business setup team for guidance in this matter.
– Choose Your Setup Type
Whether or not you set up a physical office in UAE is up to you. Regardless of your choice, you still need to choose between a mainland setup or a free zone setup for your dropshipping business. Both setup types come with different trade incentives offered by the UAE government.
– Submit The Required Documents Along With The Application
You will need these basic documents while submitting your trade license application:
- Proof of identification and address of all business shareholders and directors
- Copies of shareholders’ and directors’ passports
- Copy of trade name registration
- Articles of Association
- Memorandum of Association
Submit additional documents according to your specific trade license and setup type. An experienced team of business consultants can help you navigate the application process and efficiently get your documents in order.
4. Set Up Your Online Store
After obtaining a trade license, you can proceed to set up your online store, which will be your primary workspace. You can make your own website for your dropshipping business if you have web development skills. However, you can easily use a website builder like Shopify to set up a basic website.
5. Invest in A Good Marketing Strategy
In the initial stages, the type of marketing your business receives can make or break its success. As competition is high, you must effectively attract customers to your business using tried and tested techniques.
Dropshipping businesses should consider hiring a professional copywriter to write product descriptions. Advertising through social media platforms like Instagram and Facebook is also important. After the initial boost, you can shift your focus to more cost-saving marketing tools like SEO and content writing.
You can contact Idea Bizone to set up an appointment for a detailed consultation regarding your dropshipping business. Our team can guide you through the setup process, including all the documentation and document processing charges. Our team can help you select the best setup type for your business and offer expert advice on the minor details to help your business really take off.
