How to start a drop shipping business in Dubai: A dropshipping business is a sales model where sellers accept orders via websites or social media. But they do not carry inventory or ship products themselves. Dropshippers use suppliers that ship products directly to customers on their behalf. Generally, dropshippers have no or little ongoing staffing, storage, or inventory costs. These factors make it a popular option for entrepreneurs wishing to start a business with a small amount of savings.
The Department of Economic Development, UAE, recently updated various laws aimed to cement the position of UAE as the hub of all ecommerce activities in the region. However, with the new regulations, individuals and businesses willing to initiative ecommerce businesses would require to obtain licenses to operate legally in Dubai. The introduction of license requirements has sparked a new debate in the ecommerce industry in UAE, with several online merchants wondering about the prospects of various online activities in the country. Today we will tell you all the information in this article. How To Start Drop Shipping Business In Dubai UAE | Starting a Dropshipping Business in the United Arab Emirates.
What is dropshipping?
Dropshipping is a business process model where an online seller acts as a shop front and fulfils customer orders without holding the stock under him. The dropshipping company directly ships the physical item to the buyer. Dropshipping allows sellers to offer a range of inventory without holding stock and taking on the associated costs. Instead, items are ordered and shipped on an order by order basis.
How to pick a niche for a dropshipping business
Dropshipping can be lucrative, but any success is based on your chosen niche. As with any business model, it’s not advisable to enter a crowded or saturated market. Instead, find an as yet unplugged gap.
The key to finding your niche is to research the market thoroughly, along with any successful competitors. Tools, such as Google’s Keyword Planner and Trends feature are also useful for gauging local interest.
When starting in Dubai, you should look to offer a product that is not readily available in the UAE.
Types of dropshipping
1. Product reselling
This can be considered the most common type of dropshipping. In this type, a company finds products from various sources and makes them available in one place. This is done with an internet page. They simplify the process of finding and buying products for the clients. They also provide extra value thanks to the in-depth reviews of the product, allowing clients to know unique content about it.
2. Business extensions
We refer to this type of dropshipping in UAE for stores that don´t have an online presence. This can be because of many reasons, like lack of time, funds, or knowledge for it. For these cases, dropshipping businesses work with those kinds of companies and they become their online presence. Each time they get a sale they ask the retailer to ship the item to the customer and If you want to get a Freezone industrial license this is what you need to know.
This kind of dropshipping business is good for companies that have an established relationship with the retail store. This type of store can work amazingly well in smaller cities, where businesses might be looking forward to expanding their market. This can be pretty difficult to do in rural areas.
3.Product creation
Another type of dropshipping business is those that focus on product creation. In this type, the dropshipping business groups some of their products and makes them available for purchase as one product. For example, a business might find a provider with a large product line of craft supplies. And with those supplies, they would build their own crafts using those supplies.
Making new products can be difficult for businesses of dropshipping in UAE. Nevertheless, if you have a dropshipping business of this type, you don´t necessarily need to create a new product. You can simply make a bundle of objects useful for a person in a certain situation.
4. Print on demand
This type of dropshipping occurs when a company needs to sell products that have text or an image print on them. Some examples of these kinds of companies are those that have a wide selection of products to print on. Some cases of this are shower curtains, mugs, T-shirts, etc and In case you want to find out about the trade license in Dubai and how to get it, here you can learn about it
This type of dropshipping business requires you to have an idea of what you want to print on the products. Secondly, you´ll need to put it in an acceptable format for the printing service. This is typically done via an image upload. This type of dropshipping business is good if you have the interest of a specific group of clients.
How to start a drop shipping business in Dubai
Steps to start a drop shipping business in Dubai, UAE
As a top-level guide to getting started, we’ve created the following checklist:
1. Apply for a business license in Dubai
This is a multi-step process — and while none of these steps is particularly complicated, they all require knowledge of how the business incorporation process works in the UAE. This is why we recommend you seek out expert advice to help you navigate the steps.
2. Be specific about your business activity
In order to successfully apply for a business license in Dubai, every business must list its business activity — or activities. You will be able to choose the most appropriate option from a predetermined list, with over 2000 to choose from — so whatever your industry, there will be options that apply to your business. It’s essential that you list every activity your business undertakes; failing to cover all activities can result in fines, or even your business losing its license.
3. Choose your company’s name
As well as your name needing to be snappy and memorable, you’ll also need to choose a name that fits the UAE’s strict naming conventions. The key information to note on this front is that UAE company names should not contain any language that’s considered blasphemous or offensive. It should also not feature the names of any well-known institutions, or any abbreviations of your own name. Using your own full name is permitted, however. It’s also important that your business name has a legal entity — such as FZE or LLC. These are just some of the criteria to consider; please do get in touch with us for a more comprehensive list.
4. Determining your setup type and applying for your license
You will need to choose between free zone and mainland setup. Both come with distinct advantages and limitations — it’s best to seek expert advice on which is best for you. Once this is complete, you’ll be able to apply for your license. How you do this will vary according to your setup type, but in both cases you’ll need to submit:
- Proof of ID and address for directors and shareholders
- Passport copies for shareholders and directors
- Copy of trade name confirmation
- Memorandum of Association (MOA)
- Articles of Association (AOA)
5. Apply for your visa
This final step contains four stages, including a medical test — but it shouldn’t take more than a week. And once it’s done, you and your business are ready to get drop shipping across the UAE.
Read also: Top 20 Successful Business Ideas in Dubai 2022 | Best Business To Start In Dubai
Benefits Of Drop Shipping In UAE:
Dropshipping is a term used for kinds of business where sellers’ sales are routed through a courier to reach their destination. That’s when the buyer buys products from the supplier, either directly from the supplier or through a middle-man. Its delivery will be done through a courier’s conveyor system that is more expensive than courier shipping. Generally, the profit margin in this business ranges from 10%-30%
- Protection against fraud and losses
- Convincing buyers to use your product
- Optimal business method
- Time and cost-effectiveness
- The help of the local courier
- Product delivery time
