What is dropshipping?, and How to start a dropshipping company in Dubai?

What is dropshipping?, and How to start a dropshipping company in Dubai?

The United Arab Emirates is one of the top trade and commerce destinations in the world. Authorities of Dubai have taken certain measures to boost the trade and commerce activities in the country to make the business hub of global trade. It has persistently seen trade and commerce growth in the past few years and it is continuing to do so. With a balanced and steady government, the UAE businesses are growing well. One of the best advantages of starting a business in Dubai is that it has good connectivity to the Middle East, North African regions, Asian and European markets.

Because of its location, Dropshipping Business in UAE has much more exposure than any other business in Dubai. Also, they have an amazing seaport link. Covid-19 pandemic in 2020 set the directions for businesses across the world. Business trends in Dubai have shifted to Digital technology and UAE is turning into one of the most digital-friendly lands. Dropshipping business in UAE is a flourishing market and it is the perfect business in Dubai to ponder upon.

What is Dropshipping in UAE? 

If you are hearing a lot about DropShipping in UAE on the internet, from your friends and family, and wondering what it is? Drop Shipping is an online business store where the product is shipped directly from a third-party seller to the consumer. The third-party seller can be anyone from a manufacturer to a big-time seller.

The fundamental skill set for a drop shipping UAE seller is to source the products at the best price from various manufacturers, retailers, or sellers.

How Dropshipping Business Works? 

The primary and the most attractive factor of drop shipping online business is that it can be started with minimum or no investment. It is because a drop-shipper doesn't have to buy or store the product. It is primarily responsible for getting the products shipped directly from the third-party seller to the buyer. It is just like delivering an order from the wholesaler to the customer.

The retailer of the products is mainly responsible for managing, storing the product, transportation, and leaving the drop shipping seller with no other responsibility, Before starting dropshipping store you have to find a premium product with the best price and earn profits from the product sale.

What Are the Biggest Challenges Dropshipping Businesses in Dubai Face?

Below are the biggest challenges dropshipping businesses often face in the UAE.

1. Highly Competitive Niche

One of the biggest challenges of the drop shipping business is that it is a highly competitive niche. It sounds easy to start, however, there are many dropshipping businesses and selling items at rock bottom competing prices to gain revenue.

2. Inventory Issues

It's usually easy to track the stock of the product when you are in charge of the products. However, when you are getting the products from different warehouses, who are also taking orders from multiple businesses, then inventory can change on a daily basis. There are multiple websites that will help you keep track of all the products available in different warehouses. If a product is unavailable, you can immediately un-publish the product.

3. Reliance on the Third-party Seller

Dropshipping business is completely based on the trust of the third-party seller. If the third-party seller fails to execute the order as promised, the dropship seller has to pay the price with the customer when they complain. Similarly, if the third-party seller goes out of business, then the drop shipping UAE business faces disruption in its own business.

4. Difficulty in Customer Support

If something goes wrong with the product, it is difficult to provide solutions to customers when you don't have control over the inventory. If the customer claims that the product was damaged, and did not receive the order, or any information regarding the product, the drop-shipping seller will have to contact the third-party seller to resolve the issues.

How to Start a dropshipping company in Dubai? 

UAE is developing into a digital-friendly country. Recently Dubai has become the first government in the world to go 100% digital. Approximately around 99% of the population living in Dubai are diligently using the internet. They are delighted in scrolling through social media, writing reviews on the internet, and spending eight hours a day on the internet. therefore, starting a dropshipping store in Dubai is a flourishing option.

Here are the things to keep in mind before launching a Dropshipping Business in Dubai.

1. Pick a Product to Sell

If you find the perfect product, You will be making a lot of profit at your store. Just like any other business model, it is not wise to use a product or market that's overrated, overused, and saturated. it's better to find a new product and create your own market.

While selecting a product to sell in the UAE, try to find products that are not easily available in the UAE, if you do so, you will draw a lot of customers to your dropshipping business in Dubai.

2. Pick a Niche for Your Business

Picking a niche for your business is one of the crucial parts of dropshipping business. The primary way to find your niche is to usually sell one product or a handful of products in the beginning. So that you can focus more on your existing customers and draw customer loyalty to your business.  Also, research the market completely, as well as a prosperous competitor.

Try to go with new trends when you're new to the business to get recognition. Use tools like Google's Keywords Planner and Trends feature to determine the local interest.

3. Obtaining the Required License for Your Business 

According to article 6, any foreign firm looking to set up a business in UAE is supposed to require a trading license. Also according to article 335 Commercial Companies Law (CCL), companies will be charged with heavy financial and administrative penalties for not obtaining the relevant trading license.

A lot of people have an illusion that the dropshipping business does not require a physical location or the need for any specific trade license. Well, that's a genuine mistake most businesses do. the UAE government has strict policies relating to trade and commerce activities.

The most prominent and economical approach is to apply for a dropshipping license in one of the UAE's free zones.   

To obtain a license in the UAE you have to go through a legal process. However, none of the processes are complicated. Below are the documents required while obtaining a dropshipping license in the UAE.

Documents Required For the Dropshipping license:

1. Entire application form.
2. A passport copy of the proposed owners.
3. Two passport-size photos.

4. Find a Reliable Supplier 

The prosperity of a company totally depends on the availability of the supplies. Most of the dropshipping suppliers in UAE, Dubai are located outside, so maintaining contact and the authenticity of the supplier is critical. If you are not confident in your suppliers in UAE then you should continue your search for a supplier who will build your confidence.

5. Build a Dropshipping Store 

A drop shipping UAE businesses use e-commerce platforms like Shopify, BigCommerce, WooCommerce, etc to build their dropshipping store. There are many apps and tools to assist you to boost your sales. If you have a budget, then you can hire a web designing agency to help you create a website or build a mobile app for your dropshipping business.

6. Manage Your Orders and Client Expectations 

The total prosperity of a dropshipping business depends upon your skills in managing drop-ship orders in the UAE. You will have to track all the orders on your e-commerce platforms from time to time. It is always essential to maintain communication with your customers so that they will repeatedly do business with you. If you want to stand by customer expectations It's always a magnificent idea to respond to their complaints, queries, shipping problems, etc.

Take Help from us to Launch a Drop Shipping Company in UAE

The economy of Emirates has made its policies and laws which invite and encourage the setting up of organizations. Dropshipping business in UAE is a flourishing market and it is the perfect business in Dubai to start. Our advisors can help you to set up a dropshipping company in your favor and get your authorization ready so that, you can focus more on your dropshipping business.