A Guide to Dropshipping in the UAE
If you have an entrepreneurial mindset and a knowledge of e-commerce, setting up a dropshipping business in Meydan Free Zone can be very exciting.
The United Arab Emirates is one of the most internet-connected countries in the world and the leading e-commerce market in the Gulf Cooperation Council region. According to the trade.gov website, the UAE saw $3.9 billion in e-commerce sales in 2020 according to the trade.gov website, and this market is expected to reach $8 billion by 2025. These figures indicate that dropshipping could be a fascinating market today.
In this blog we will discuss:
- What is dropshipping?
- How does the buying and selling or receiving of goods work?
- Does it need a distribution network? Do I need to partner with a logistics company?
- What kind of financing is required to start a dropshipping company
- Dropshipping in the UAE – advantages & opportunities
- How to start a dropshipping business in the UAE
- Top five dropshipping suppliers in the UAE
- Do I need a license to start a dropshipping business in the UAE?
- Cost of starting a dropshipping business in the UAE
- How to grow a dropshipping business
- Is dropshipping legal in the UAE?
- Why choose Meydan Free Zone for your UAE dropshipping business?
What Is Dropshipping?
Dropshipping is an ecommerce business model where the vendor does not hold any stock themselves. Instead, they display products on their website, and ask their supplier/the manufacturer to ship the product directly to their customers.
How Does The Buying And Selling Or Receiving Of Goods Work?
Put simply; a drop shipping business owner is a ‘middleman’. Your role is to find exciting products to sell online and market them to customers. You take customer payments and then pass the order to the supplier while retaining a share of the profit.
Most dropshippers begin by building a website targeted at a specific audience. They then seek products for sale on large B2B marketplaces (such as AliExpress). The dropshipper then agrees on a deal with suppliers of each product they sell, whereby the supplier will deal with order fulfilment. This approach benefits both parties; the supplier may not know the dropshipper’s market so that they can find new markets for their products. It also benefits the dropshipper since they do not need to hold large amounts of stock.
Does It Need A Distribution Network? Do I Need To Partner With A Logistics Company?
No, the dropshipper does not need to set up a distribution network themselves – the manufacturer will take care of this. The customer can choose what type of shipping they want and pay for this themselves.
It is sensible to verify that the manufacturer can deliver products in a reasonable timeframe. If it’s going to take weeks to ship orders placed through your website, customers may be unhappy, and either request a refund or they may not purchase from you again.
What Kind Of Financing Is Required To Start A Dropshipping Company?
The main costs involved in starting a dropshipping company in Dubai are
- The costs of applying for a business license
- The costs of setting up an online store
Besides this, the costs of starting a dropshipping company are relatively low. If you find a successful niche, it can even generate a ‘passive income for you.
Dropshipping In The UAE – Advantages & Opportunities
Starting a dropshipping business in the United Arab Emirates could be very profitable if you have a good understanding of consumer trends, a sense of what products are likely to become popular, and a strong knowledge of e-commerce best practices.
There are several advantages and opportunities that come with starting a dropshipping business in the United Arab Emirates, including:
- Digital And E-Commerce Ready: As noted above, internet penetration in the United Arab Emirates is one of the highest in the world. At the same time, e-commerce has seen a big expansion in the country in recent years, meaning that people are accustomed to shopping online.
- Still A Young Market: While e-commerce is already popular in the United Arab Emirates, this is still a relatively young market and is expected to double in size in the next few years. This means that there are still plenty of opportunities for your dropshipping company to find its niche and become a real success.
- Geographic Location: The United Arab Emirates is situated at the crossroads of Asia, Europe, and Africa. Dubai is also one of the world’s biggest ports and trade hubs. This means that your dropshipping business is truly connected to global logistics and know-how, so it might be quicker to ship products from foreign destinations to the UAE and vice versa.
- Business-Friendly Culture: The government of the United Arab Emirates takes a positive view of entrepreneurialism, and dropshipping is legal in the country. With a great quality internet connection and quick setup, starting your dropshipping business in Dubai is easy compared to many other places worldwide.
How To Start A Dropshipping Business In The UAE
Starting a dropshipping business in the United Arab Emirates, especially in Meydan Free Zone, is fairly straightforward – so long as you understand how the dropshipping industry works. Here are some simple steps to starting your dropshipping business:
- 1. Choose A Dropshipping Business Idea:
It is vital to find a niche for which there is genuine demand.
- 2. Do Competitor Research:
It’s important to find out how much your competitors charge, how they brand and market themselves, and what’s unique about them. You can then differentiate yourself, whether that is through price, quality, branding or something else.
- 3. Choose A Dropshipping Supplier:
Finding a reliable dropshipping supplier who can support how your business works and provide the kinds of products you want to sell is vital. Spend some time getting to know different suppliers and browsing the products they have on offer. Read reviews and speak with their sales teams before committing to a relationship.
- 4. Build Your E-Commerce Store:
Although it is possible to run a dropshipping business through websites like amazon.ae or noon.com, most dropshippers can make more money by selling directly through their website. You could use an e-commerce store-building website like Shopify to sell your products directly to consumers.
- 1. Choose A Dropshipping Business Idea:
- 5. Decide On A Business Structure:
If you’re basing yourself in the UAE, there are various business structures you could choose from, from a sole proprietorship to a limited liability company. We can advise you on the most appropriate business structure for your circumstances at Meydan Free Zone.
- 6. Get Your Finances In Order:
To start a dropshipping business and become profitable, you need to monitor cash flow regularly and ensure that you are pricing your products at the correct price.
- 7. Market Your Dropshipping Store:
To get customers to spend on your website, you need to market your dropshipping store by using things like search engine optimisation (SEO), influencer marketing, Facebook ads and so on.
- 8. Analyse And Improve Your Offering:
Continually work to ensure that your business adapts and seeks new opportunities.
Top Five Dropshipping Suppliers In The UAE
There are many different dropshipping suppliers serving the UAE market, but our favourites include:
Do I Need A License To Start A Dropshipping Business In The UAE?
Yes, you need a business license to start a dropshipping business in the UAE. At Meydan Free Zone, we can set you up with a business license and supply you with a flexi-desk and a guaranteed IBAN, in addition to your business license (so long as you pass our security checks).
Cost Of Starting A Dropshipping Business In The UAE
The cost of starting a dropshipping business in the UAE with a Meydan Free Zone license is AED 12,500. If you are a foreigner and need a visa, we charge AED 1,850 for each visa required.
Besides providing a quick and smooth process to get your dropshipping license, we also offer many other solutions, including our Easy Payment Plans that let you spread the cost of starting your business. We also provide an impressive location in attractive offices in central Dubai.
How To Grow A Dropshipping Business?
Once your dropshipping business is up and running, there are several things you can do to grow your business, including:
- Monitor social media and dropshipping websites to discover new trends
- Work with influencers to promote your products
- Invest in SEO and digital marketing to win more customers
- Offer a fantastic service that encourages people to return
- Adapt your business with new products and marketing techniques to stay ahead of the curve
Is Dropshipping Legal In The UAE?
Yes, dropshipping is legal in the UAE if you get your business license from a reputed free zone like Meydan Free Zone.
Why Choose Meydan Free Zone For Your UAE Dropshipping Business?
Meydan Free Zone is the ideal location for starting a Dubai dropshipping business. We are located in the centre of Dubai, close to warehouses, logistics businesses, the sea, and the airport. We provide you with 24/7 access and an internet connection, which means you are perfectly set up for working with customers around the world and speaking to suppliers in different time zones.
We offer e-commerce licenses in Dubai, and our experts can help you with every stage of business setup in Dubai. We offer a range of packages for dropshipping businesses, including Flexi-desk options, which means you have everything you need to succeed in dropshipping in Dubai.