In recent years, the eCommerce industry in the United Kingdom has been continuously expanding. As a result, it is now the frontrunner in the European online shopping scene. According to Statista, UK’s eCommerce industry has a revenue equivalent to 693 billion GBP in 2019.
With that said, dropshipping is one of the most profitable online business models in the UK. Since we don’t incur significant expenses like manufacturing, dropshipping turns out to be a highly lucrative venture. Also, it presents a lesser risk because it requires minimal capital to start with.
As such, it’s no wonder why so many of us are interested in starting a UK dropshipping business. In light of this, one of the best ways to start our UK dropshipping venture is through Shopify.
With this in mind, let’s discover how Shopify dropshipping works in the UK. By the end of this step-by-step guide, we’ll learn how to successfully start our Shopify UK dropshipping business.
What Is Shopify Dropshipping And How Does It Work In The UK?
The first step to success is obtaining the proper knowledge and resources. On that note, let’s start by unraveling the dropshipping business model:
- Customer buys a product from our store
- Supplier ships the order to the customer
- Dropshipper gains a profit from the sale
The dropshipping process commences when a customer places an order in our online stores. Upon confirmation of the customer’s payment, we forward the buyer’s information to the supplier.
Then, the supplier receives the shipping details, and we pay the supplier for the item’s original cost. Once the order is confirmed, we gain a profit. Next, the supplier prepares the product for shipment.
So, now that we know what dropshipping is, let’s define Shopify’s purpose. Shopify is a dropshipping selling channel. It is a fully customizable eCommerce platform that allows us to set up our website, market our products, and earn a passive income.
Moreover, this excellent eCommerce selling channel also offers a variety of business solutions, from product research to order fulfillment. Therefore, Shopify is an ideal selling platform for UK dropshippers.
To effectively dropship in the UK with Shopify, we must bear in mind to offer legal products, follow eCommerce policies, and fulfill tax obligations.
UK Dropshipping Tax Obligations
When dropshipping in the UK, there are tax obligations that we need to fulfill:
- Income Tax
- Custom Duties
One of the most essential tax obligations that we have is the income tax, which is a percentage of our annual dropshipping profits. The computation of income taxes varies according to the country’s policies where you live. In the UK, the income tax usually ranges from 0% to 45%, depending on our taxable income.
Next, we have VAT, a dropshipping tax that we charge for about 20% of every customer purchase. Specifically, there are three VAT rates in the UK:
- Standard Rate
- Reduced Rate
- Zero Rate
In most cases, products and services in the UK come with standard VAT rates. This VAT rate applies to all goods below the distance selling threshold from Northern Ireland to non-VAT registered European customers. If we go beyond the VAT threshold, we must register for VAT in the country we’re doing business in.
Meanwhile, the reduced VAT rate depends on the product’s nature and the sale’s purpose. For instance, fuel for domestic use is charged at 5%.
On the other hand, the zero VAT rate means that products and services still need to comply with VAT, but they are charged with a 0% rate. This VAT rate covers products and services we export under the following circumstances:
- They come from other places besides the UK and ship to Great Britain.
- They originate from outside the UK and the EU and ship to Northern Ireland.
However, an exception to the above provision applies to goods sent as gifts worth £39 and below. Once we collect VAT from customers, we then remit it to the UK government.
Moreover, another tax obligation we need to fulfill is custom duties. This tax applies when we source dropshipping products outside the UK. Generally, we pay custom duties for excise goods, such as tobacco and alcoholic beverages. Likewise, custom duties also apply to products that cost more than £135.
Furthermore, we compute custom duties based on the product’s price, including the packaging, postage, and insurance costs.
Starting A Company In The UK
Before we proceed further, let’s tackle establishing a company in the UK. If you live in the UK and want to register your company, you can establish your business as a sole trader, limited company, or partnership. However, most dropshippers start as sole traders or limited companies.
Beginning your dropshipping career as a sole trader gives you more control in running your business. Similarly, accounting for your finances is more straightforward since your business has a simple structure.
Meanwhile, limited companies can have better tax relief when they gain substantial profits. This business structure separates the owners’ assets from the company’s, thus achieving greater protection against litigations.
Alternately, we recommend consulting with a professional for sellers living outside the UK. By doing so, you’ll understand the ups and downs of registering your business in the UK. Plus, your accountant can tell you about the legal obligations of starting a UK company.
Is Shopify Dropshipping Profitable In The UK?
Definitely! Specifically, here are the reasons that make Shopify dropshipping profitable in the UK:
- Low competition
- High demands
- Domestic suppliers
Unlike in the US dropshipping arena, the UK has less market competition when it comes to Shopify dropshipping. In addition, the UK audience is gearing towards online shopping, resulting in greater demands for eCommerce goods.
Additionally, Shopify integrates with several UK dropshipping suppliers. Therefore, we can source products locally, making the shipping time quicker.
When we combine all these factors, it’s safe to say that we’ll have more chances of achieving high profits when starting a Shopify dropshipping business in the UK.
Shopify Dropshipping UK: Pros And Cons
Now that we’ve covered the technical aspects of Shopify dropshipping, let’s lay down the benefits and drawbacks.
Shopify Dropshipping In The UK: Pros
To begin with, here are the main advantages of integrating our UK dropshipping business with Shopify:
- Customization of your website
- No selling limits
- Customer database collection
Primarily, Shopify allows us to customize our UK dropshipping stores. By doing so, we can optimize how our websites will look, and focus on branding our stores with high-quality images and products. Remember that an attractive website will entice customers to check out our products.
Moreover, there are no selling limits with Shopify. Therefore, we can list endless products in our UK dropshipping stores. Thus, the broader product selection we have, the higher chances that our UK audiences will find what they’re looking for in our stores.
Furthermore, Shopify enables the collection of customers’ information. This feature works when shoppers subscribe to our newsletters or buy products from us.
By getting a hold of customers’ contact information, we can utilize email marketing to constantly advertise our new products and offer exclusive perks. Thus, increasing the possibility of more sales.
Shopify Dropshipping In The UK: Cons
On the other hand, these are the disadvantages of working with Shopify:
- No organic traffic
- Subscription fees after the free trial
- Additional transaction costs
On the downside, Shopify brings no organic traffic into our UK dropshipping stores. For us to get substantial traffic, we have to invest in practical strategies that usually require a marketing budget.
Despite offering a two-week free trial for UK dropshippers, we still have to pay subscription fees when this period ends. In order for us to continue operating our Shopify business, we have to secure our Shopify store subscriptions. In particular, these plans range from $29/month to $299/month.
On top of subscription costs, we incur additional expenses for our sales transactions. Likewise, we pay transaction fees using different payment methods, such as PayPal and credit cards. These fees can range from 2.4% to 2.9% of our sales transactions, plus 30¢ USD.
With all the benefits and drawbacks of dropshipping on Shopify, we have to find the balance so we can maximize our dropshipping profits.
The Best Shopify Dropshipping Suppliers In The UK
Fantastic! We now have an overview of dropshipping in the UK. Next, it’s time to integrate our Shopify stores with reliable suppliers in the UK.
But, what are the features that set apart good dropshipping suppliers from the rest? The answer lies here:
- UK warehouses
- Fast shipping
- Wide product catalog
- Outstanding customer service
- Clear business policies
One main factor in considering a dropshipping supplier is the availability of its domestic warehouses in the UK. Consequently, having warehouses in the UK enables faster delivery of products to customers. Unlike sourcing items within the UK, international shipments take longer to deliver.
Subsequently, our dropshipping suppliers must have a vast selection of products. This factor is crucial in ensuring that we can source a wide catalog of high-quality products under our dropshipping niche.
Moreover, it’s crucial that we pick UK dropshipping suppliers that greatly emphasize customer support. In this way, we can extend the quality of business we get from them to our UK customers.
Finally, we have to pick UK dropshipping suppliers who have clear business policies. Since we adopt these policies in our Shopify UK stores, it’s an essential factor to consider.
Specifically, these policies apply to the products we source from them, so they must be clear. For example, we have policies for returns, refunds, and shipping.
To know which ones work best for your Shopify dropshipping business in the UK, you need to set the warehouse location to “United Kingdom.”
To give us a glimpse of the best UK dropshipping suppliers, here are the top picks:
Lastly, you can explore other excellent UK dropshipping suppliers for your Shopify stores and expand your UK business in no time.
How To Start A Shopify Dropshipping Business In The UK
We’ve finally come to the fun part! Here, we’ll discover how to start a Shopify dropshipping business in the UK. For us to successfully establish our dropshipping venture in the UK, we’ll need to go over these steps:
- Step 1: Find Your Niche
- Step 2: Set Up Your Shopify UK Store
- Step 3: Choose Your UK Shopify Dropshipping Supplier
- Step 4: Import Your Products
- Step 5: Market Your UK Shopify Store
- Step 6: Fulfill Your Orders
- Step 7: Customer Service
- Step 8: Scale Your Success
Now, let’s begin our Shopify dropshipping journey in the UK with the first step.
Step 1: Find Your Niche
The first step in successfully starting a UK Shopify dropshipping business is finding our niche. To carry out this step, we have to conduct product research.
Product research is a strategy to obtain information on the latest trends. Essentially, offering the right products that address the UK market needs can help our Shopify stores gain huge sales.
Moreover, we have several product research methods to find the right niche for our Shopify stores:
- Search on UK suppliers’ websites
- Competitor research on Shopify
- AutoDS Product Research Tool
Search On UK Suppliers’ Websites
One way of finding the right products to sell on Shopify is by searching for best-selling items on our UK suppliers’ websites. Top-selling items on suppliers’ websites mean that many clients purchase them. Therefore, they have high sales potential.
Competitor Research On Shopify
The next way to know which products work best in the UK dropshipping market is through competitor research on Shopify. One dropshipping tool that helps uncover the secrets behind the success of our competitors on Shopify is the Koala Inspector.
The Koala Inspector lets us spy on other Shopify stores’ metrics, such as the suppliers they work with and the marketing techniques they utilize. Through this product research tool, we’ll also discover the items that convert to significant sales. As a result, we can test these product ideas in our Shopify stores and enjoy high profits too.
AutoDS Product Research Tool
AutoDS, one of the top players in the UK dropshipping scene, offers an efficient product finding tool: AutoDS Product Research Tool. This feature allows us to search from millions of products and find our next winning items.
Subsequently, this research tool enables us to apply search filters like shipping times, prices, warehouse locations, and other details. By knowing this, we can come up with more suitable product suggestions for our Shopify dropshipping stores.
Step 2: Set Up Your Shopify UK Store
The next step in starting a dropshipping business in the UK is setting up our Shopify UK store. In order to do this, here are the processes we need to undergo:
- Create A Shopify Account
- Generate Your Business Name
- Connect Your Domain
- Design A Shopify Store Logo
- Get A Shopify Store Template
- Optimize Product Pages
- Set Up A Professional Shopify Homepage
- Include Store Policies And Legal Pages
- Add The Shopify Navigation Menu
- Select The Shopify Store Currency & Payment Provider
- Configure Shopify Checkout Settings & Shipping Zones
We’ll learn how these steps work, as we go further with this article.
1. Create A Shopify Account
When testing the waters on Shopify, you can subscribe to its 14-day free trial. All you have to do is provide your email address, create a password, and input a temporary store name. Then, after completing the sign-up process, you can continue exploring your Shopify store.
However, it’s advisable to establish the products you want to sell first. By doing so, you can start your UK dropshipping business without wasting your trial period finding products to sell.
2. Generate Your Business Name
Upon successful creation of a Shopify account, you need to create a name for your UK dropshipping store. Remember that a unique Shopify store name helps you stand out from other competitors.
If you’re running out of creative ideas, you can utilize the Business Name Generator. With the help of this tool, you can verify the availability of your business name.
3. Connect Your Domain
Once you have your Shopify UK dropshipping store name, the next step is connecting the domain with your store. In particular, a domain is a website address that leads to your Shopify store. The use of a unique domain helps establish our brand.
In order to secure a domain name, we can go to GoDaddy. Keep in mind that hosting a domain for your Shopify dropshipping store costs you about $10 to $20.
4. Design A Shopify Store Logo
Just like having a unique business name, your store’s logo can also improve your Shopify store’s branding. To create professional-looking logos, you can utilize websites like Hatchful for free.
5. Get A Shopify Store Template
Another factor that gives distinction to your Shopify store’s identity is your website’s theme. Thus, it’s important that the general appearance of your store highlights the niche you’re selling. When customers find your website attractive, they will likely enjoy browsing through your pages.
In relation to this, Shopify provides at least 100 unique themes for your UK business. Meanwhile, you can also purchase excellent templates from third-party websites.
6. Optimize Product Pages
Now that your Shopify store has a creative theme, you can optimize your product pages. However, this process comes after importing products to your Shopify dropshipping store. The product pages include the description, tags, specifications, images, and other information pertaining to a certain item.
As a dropshipper, you need to set these details accordingly. Through this, customers will immediately know about the products that they’re buying. Bear in mind that a proper product page can help scale your business.
7. Set Up A Professional Shopify Homepage
One of the first things that customers see when they visit your Shopify store is the home page. Therefore, it’s necessary that you design your home page to look welcoming.
On the home page, you can add your Shopify store’s name and logo. Additionally, you can include promotions or announcements in this section.
8. Include Store Policies And Legal Pages
Likewise, adding our UK store business policies and legal pages is essential. Your Shopify store’s policies outline the ins and outs of your business.
To help you save time in establishing your policies and legal pages, here are free templates for your UK dropshipping business:
9. Add The Shopify Navigation Menu
In relation to your policies and legal pages, navigation links must be available for a smooth transition from one page to another. With the help of a navigation menu, your customers will be well-guided while browsing your Shopify store pages.
10. Select The Shopify Store Currency & Payment Provider
Yay! You’re almost done with setting up your Shopify dropshipping store in the UK. Next up is selecting your store’s preferred currency and payment methods. Moreover, setting your store’s default currency is important so that customers will know your product prices accordingly.
If you want to add other currencies like USD for US-based customers, you can use free apps like the Auto Multi-Currency Converter. By using this tool, you can automatically convert one currency to another.
11. Configure Shopify Checkout Settings & Shipping Zones
Now that your Shopify store is practically ready, you need to ensure that everything’s in place. Setting up your Shopify dropshipping store requires you to configure the checkout page and shipping zones.
Furthermore, your Shopify store’s checkout page is where customers input their details and settle payments. Thereby, it needs to contain relevant information such as shipping zones. Since you’re starting a dropshipping business in the UK, ensure that the UK is at the top of the list for shipping regions.
Hooray! Now that your Shopify dropshipping store is initially set, you can begin showcasing your products to the UK audience. However, starting your UK dropshipping business doesn’t conclude here.
You still need to go through other processes to fully optimize your Shopify dropshipping store in the UK. Don’t worry, you will be learning about these processes in the next sections.
Step 3: Choose Your UK Shopify Dropshipping Supplier
After creating our Shopify dropshipping stores, we have to start sourcing products from reliable suppliers. Subsequently, there are factors that we have to consider when choosing a UK dropshipping supplier. We can learn about this under the ‘The Best Shopify Dropshipping Suppliers In The UK’ section above.
On that note, we should consider working with several UK suppliers. Doing so brings us many advantages:
- Wider product variations
- Minimal delays
- Higher product quality
- More perks and discounts
When we work with multiple UK suppliers, we gain access to more product choices. As such, if one supplier doesn’t have the product we want, then we can source from another supplier.
Likewise, when we have high customer demands, we don’t need to worry about running out of ‘stock.’ Since we can always get similar products from other suppliers, it will limit the number of delays we have with shipping.
In addition, sourcing from multiple suppliers ensures higher quality products. Doing so enables us to curate the best choices from different suppliers.
Plus, working with multiple suppliers means we benefit from lower pricing. Since one supplier doesn’t have complete control over a niche, we can negotiate prices and obtain discounts.
While there are numerous dropshipping suppliers available in the market, we can break down our choices into the most reliable ones. That’s why AutoDS is here to guide us in our search for the best UK Shopify dropshipping suppliers. These excellent suppliers allow business automation with the following features:
Therefore, picking reliable UK dropshipping suppliers for our Shopify stores helps with business management and scaling.
Step 4: Import Your Products
Once we have UK suppliers to source products for our Shopify dropshipping stores, we can start importing these items. In general, we can manually or automatically import products to Shopify.
Basically, manually adding products to our UK Shopify dropshipping stores can be a time-consuming process. To illustrate, we need to copy every product detail from our suppliers’ websites. Then, we paste and upload the texts and photos one by one in our Shopify stores.
Whereas with import automation, we can quickly list dropshipping products in our UK Shopify stores. In line with this, AutoDS offers efficient product importing methods:
- One-click importer
- Single product uploader
- Multiple product IDs/URLs
- Bulk products importer
Once the import process commences, our UK Shopify dropshipping stores are live. This means customers can start searching and purchasing products from us.
Step 5: Market Your UK Shopify Store
Now that we have dropshipping products in our stores, we should start marketing them to our target UK audiences. The right marketing strategies help our Shopify stores become visible to the UK audience. Specifically, the following marketing techniques will help us scale our business:
- Facebook ads
- Email marketing
- Influencer marketing
- Content marketing
To better understand how these marketing strategies help our UK Shopify dropshipping stores, let’s discuss each one of them.
One of the commonly utilized Shopify marketing methods is Facebook ads. Because of the massive user base on Facebook, the placement of ads on the platform is a convenient way of attracting shoppers.
When advertising our UK Shopify stores on Facebook, we can utilize several methods. Some of the most effective ones are promoting our pages, posting on buy & sell groups, and suggesting a call to action.
Constant interaction in Facebook communities or continuous promotions will likely entice customers to visit our UK Shopify stores.
Another way of marketing our UK Shopify stores is through email marketing. This method works when we send customers promotional materials or product advertisements through email.
Before we can do that, we need to collect a substantial database of customers’ email addresses. For prospect buyers, we can collect their contact details when they subscribe to our newsletters and offer them incentives in the form of discounts. Meanwhile, we collect information from existing customers when they provide their contact details upon checkout.
With the advent of social media platforms, the use of influencer marketing is a great marketing method for our UK Shopify dropshipping stores. Influencers are popular personalities on various platforms, such as Instagram, TikTok, and YouTube.
Moreover, these influencers gain the trust of their wide follower base. Through this, we can utilize influencers to help us market our products and convince more people to buy from us.
If we want a free marketing technique, we can try out content marketing. This method involves creating a blog where we can publish valuable content in relation to our niche. Aside from advertising our online stores, we can also help educate fellow dropshippers or other customers through our blog pages.
Additionally, our blog pages don’t only contain valuable knowledge, but they help improve our search engine optimization (SEO). Thus, when people search for keywords that we use on our blog page, our store has a higher chance of appearing on the search results engine.
If we want to test content marketing, we can start a YouTube channel, write blog articles, join podcast sites, and more. By doing so, we can showcase our UK dropshipping business identity.
In a nutshell, we don’t get organic traffic in Shopify. Hence, it’s essential to set aside an online marketing budget to promote our UK dropshipping business.
Step 6: Fulfill Your Orders
Upon marketing our UK Shopify dropshipping stores, traffic will start to increase. Thereafter, customers will start placing their orders in our stores. In return, we need to fulfill these orders promptly.
We can fulfill customer orders in two ways: manually or automatically. Opting for the manual fulfillment method means that we have to enter every order detail and shipping information on our suppliers’ websites. This method can be burdensome, especially when customer demands pile up simultaneously.
To save ourselves from this tiresome task, we can automate the order fulfillment process. With automation, a dropshipping software automatically copies customer order details and sends them to our suppliers. Plus, our customers will benefit from automatic tracking updates.
For us to fully optimize our dropshipping business, we have the Fulfilled by AutoDS solution. This excellent automated order fulfillment service efficiently manages orders under one dashboard. In addition, it fulfills customer demands 24/7, so our UK customers don’t have to wait long for their orders.
Moreover, this order fulfillment solution doesn’t require us to create buyer accounts because it utilizes AutoDS’ buyer accounts. All we have to do is load our balance on the AutoDS platform to pay for orders.
Now, we can sit back and relax while our UK dropshipping business grows.
Step 7: Customer Service
As an integral aspect of running our UK Shopify dropshipping stores, we have to provide outstanding customer service. By giving our UK customers a good shopping experience with us, we must ensure that we’re with them all the way.
Remember that an excellent service helps establish our reputation in the UK eCommerce industry. In addition, the quality of the service we provide can lead to repeat customers. Thus, the long-term survival of our UK dropshipping business.
In particular, we need to put emphasis on the following aspects:
- Address customer concerns quickly
- Take action on return and refund requests promptly
- Keep a professional and welcoming environment
Specifically, we can monitor customer messages in our Shopify dashboards. As a result, we can conveniently reply to our customers.
With the help of these tips, we can serve our customers in the best way possible. Bear in mind that customers feel valued whenever we find time to connect with them. More so, when customers love their shopping experience, the chances of repurchasing become greater.
Step 8: Scale Your Success
We’ve finally come to the last but equally important step towards our UK Shopify dropshipping store success. Scaling our success means working with reliable platforms and incorporating the most efficient dropshipping solutions.
One crucial way of scaling our business is through dropshipping automation. As discussed in the previous sections, automation helps us save significant time. By automating the dropshipping processes, we can pour our efforts into expanding other aspects of our business.
Of course, AutoDS is here to help us all the way. This excellent platform helps automate product research, product importing, price/stock monitoring, order fulfillment, and more!
Plus, AutoDS supports numerous UK dropshipping suppliers that we can work with. These suppliers can supply us with high-quality and best-selling dropshipping products.
When it comes to the products we sell in our UK Shopify stores, we should make sure to add more quantities to items that have high sales conversions. On the other hand, we need to eliminate products with poor sales performances.
Ultimately, AutoDS offers all the best features to help you scale your UK Shopify dropshipping business in no time. So, what are you waiting for? Test what AutoDS can offer your UK dropshipping venture for only $1.
How Do I Dropship On Shopify UK?
You can start dropshipping on Shopify UK by creating an account and setting up your store. Then, you have to go through several processes, starting with finding your niche, choosing top UK suppliers and scaling your business.
Is Dropshipping Possible In The UK?
Yes! Dropshipping is possible in the UK, as long as you follow the UK’s dropshipping policies and pass the requirements before selling to the UK market. For a detailed explanation, check out this article: Dropshipping UK – A Step By Step Full Guide 2022.
Is Dropshipping On Shopify Profitable?
Definitely! Shopify is a widely-used selling platform worldwide. With the increasing popularity of eCommerce in the UK, dropshipping on Shopify can surely bring huge profits.
You deserve a pat on the back for completing this step-by-step guide! Finally, we’re ready to start our Shopify dropshipping business in the UK.
Well, attaining dropshipping success in the UK can be challenging at times. But as long as we follow the UK’s policies and optimize our business processes, nothing is impossible.
Begin your UK Shopify dropshipping journey and add in-demand products to your online store. In due time, you’ll gain substantial sales and scale your dropshipping business.
To wrap up, step up your dropshipping adventure by discovering more ideas on how to dropship successfully. To achieve this, we offer you the following resources: