How to Launch a Dropshipping Business in the UK
Have you ever wanted to start a business without a warehouse and mountains of stock? Dropshipping is a way for solopreneurs to sell products direct from the supplier. You take care of the marketing and sales; they handle the packing and delivery to your customers. Job done. The million-dollar question: what products are you going to try to sell? This guide will take you through everything you need to know: UK rules, keeping costs low, finding suppliers, picking products, and steering clear of the common pitfalls so you can get your “dropshop” up and running. Key takeaways ☑︎ Dropshipping lets you sell products online without holding stock as your supplier handles packing and delivery. ☑︎ Low upfront costs let you test ideas and experiment without a big investment. Start small, test products and scale as you find what sells best. ☑︎ Get your own domain and professional email to build trust even if you also sell on marketplaces. ☑︎ Choose reliable suppliers. UK or EU-based options mean faster delivery and fewer customs issues. ☑︎ Focus on fast, honest and helpful customer service to build and protect your reputation. What is dropshipping? Dropshipping is a clever way to run an online shop without ever having to store a single product yourself. Instead of buying stock upfront, you list products from a supplier on your website — and when someone places an order, your supplier ships it directly to your customer. All you really need is a good website, a reliable supplier (or two), and a plan to get your products in front of the right people. Done right, that means less risk, lower startup costs, and no need to pile up stock in your spare bedroom. That leaves you free to focus on growing your shop — testing new ideas, honing your product range, and building a brand that people trust. Dropshipping is just one of number of fulfilment or order fulfilment models. Where some businesses manage their own stock, or ship made-to-order items, dropshipping stands out because it takes out the need to handle products directly. There are also lots of platforms and plugins out there to handle tasks like order syncing and stock updates for you, making your shop easier to manage. More on those later. For more on starting an online business, check out: A 123 Reg Guide to Starting an Online Business Closer look: Print-on-demand vs print-on-demand dropshipping One popular way to sell online today is print‑on‑demand — custom products like t‑shirts, mugs, or calendars that are only made after someone orders them. If you tried to run print‑on‑demand at home, you’d need a printer or heat press, blank items, packaging, and plenty of time to handle each order yourself. With print‑on‑demand dropshipping, then, you pass on both the production and delivery to a supplier. When someone buys from your site, the order goes direct to your print partner. They print the design, pack it, and ship it straight to your customer. No stock, no machines… no clutter in your house! What are the benefits of dropshipping? Dropshipping appeals to many small businesses because it keeps costs low and setup simple: ✓ You don’t need to invest in stock or warehouse space. A laptop, website, and a bit of creativity can get you going. ✓ Your shop can be live in days, once you’ve chosen your products and suppliers ✓ You can run your business from anywhere (kitchen table, café, or on holiday…) ✓ You’re not limited by what you can physically store, so you can test and sell a variety of items to see what works best ✓ More orders don’t mean more manual packing — as sales grow, your supplier does most of the heavy lifting ✓Because you only pay for products once they’ve sold, there’s less financial worry (even if they don’t fly off the shelves) Is dropshipping right for me? Dropshipping could work well for you if you’re looking to run online with minimal start-up costs and no room for stock. It can be a good fit for soloproneurs, creators, and influencers — but also a way to add another extra income stream to an existing business. The beauty is you can always test it out before fully committing, and build up from there. When is dropshipping not the best option? Dropshipping isn’t for everyone. If you want full control over stock quality, packaging, or delivery times, the hands-off setup can be frustrating. Profit margins are often slimmer too, especially in competitive niches. It’s less suited to brands that rely on fast delivery or a premium unboxing experience, since you’re trusting third-party suppliers to meet those standards. UK customers expect clear delivery times and easy returns, so be aware that long waits or unclear policies can deter buyers. How does dropshipping work in the UK? In the UK, dropshipping works much the same as anywhere else, but with a few extra rules to keep your business above board. You still choose what to sell, set up your online shop, and connect with suppliers who handle packaging and delivery. When a customer buys from your site, you send their order details to your supplier, pay the wholesale price, and keep the profit. Most people start as a sole trader and only register as a business once things start picking up. If you’re selling regularly and taking payments, it’s good to know when registration is needed and what your responsibilities are. From a customer’s point of view, they’re buying from you. Is dropshipping legal in the UK? Yes, dropshipping is legal in the UK — as long as you follow all the basic consumer rules and you’re clear about how orders get fulfilled. Even if a supplier sends the product, you’re still the retailer, so you’re the one dealing with refunds, returns, delivery questions and any customer issues. As ever, we’re not qualified legal experts here at 123 Reg, so be sure to check out the Official HMRC
6 trends in e-commerce you need to know
The world of retail is in its biggest transition since the adopting of the barcode scanner over hand-held pricing guns. Even small corner shops are now more likely to use the former, although there will always be a handful of retailers who hold on firmly to tradition. The current transition, the consumer move from physical shopping to virtual shopping, has been underway for a few years now but the mass-growth is now well and truly upon us. E-commerce is no longer a word used by only certain demographics, it is a term understood by 99% of the population. Yet, where e-commerce goes next, is the question thousands of retailers are asking, here are some of our predictions: 1. E-commerce dependance will continue to rise The mass-market for e-commerce is already here, but the economic climate and reluctance for businesses to invest in expensive overheads such as retail space and customer-facing staff, means e-commerce will continue to grow and be more attractive to businesses both new and old. That’s not to say E-commerce should be seen as just a cheap option. Investing in back-end infrastructure and a pleasing customer journey is essential and cutting corners and costs on that invariably also means cutting customers. 2. Seasonal trends will still be applicable While leaving your Christmas shopping until Christmas Eve is probably soon to be assigned to history (although we know there are some online retailers that offer this and the printable / emailable voucher has never been as popular), shopping at Christmas is still going to present a potential bumper windfall for online retailers. In addition, the tradition of the January sale lives on long and strong online so if you are running an ecommerce site, consider December and January a pretty much no go area for personal holiday. 3. Buying social will increase The recommendation of a friend or trusted colleague can have a massive impact on whether you buy or don’t buy. The big retailers have long known this and the push post checkout of many retailers to “share your purchase” via your social networks is almost second nature to most of us buying online nowadays. That will only increase as will the number using the high street more as as browsing tool than a shop. Think Argos catalogue of the past, that could soon become the way we treat the physical shopping world, perhaps not even ever buying presents either, but sharing them over the internet (see Web 3.0) 4. The development of personal verification With social networking sites now dominating the way we login to control panels and accounts across the web, the single login system while secure in principle is potentially open to abuse if you stay logged in for example on a publicly located computer. Many systems with automated payment logins and processes would therefore allow a ‘hacked’ account to be used to rack up £s of orders without extra security checks. Already to market Jumio’s NetSwipe hasn’t quite captured the imagination as many had expected, but we think it won’t be too long before banks – and consumers – are insisting on this or similar technology to combat web fraud. 5. Flash sales will drive traffic In the real world retailers call these “fire sales” and you see the High Streets littered with ‘Closing Down’ and ‘ All stock must go’ almost everywhere you go nowadays. That trend is set to move onto the internet. Already, the growth of social shopping sites like GroupOn and LivingSocial have relied heavily on the same mentality to drop prices to all-time lows and drive sales and hopefully traffic back to the retailer sites. Now as brands become more powerful and influential themselves via social media, so they will be looking to use similar tactics to drive traffic to their site alone. 6. Online loyalty programs kick in The success of large scale affiliates offering money-back to customers for click-through purchases such as QuidCo and TopCashback makes it clear that loyalty to brands extends online – especially if there is a financial incentive. Expect this to be become more polished and more targeted by the big names in the next few months. Already the big high street names such as Nectar are evident if not overtly active online, but brands are aware of the importance of customer loyalty and will be exploiting that more and more in tighter economic times.