Starting a Drop Shipping Company in Dubai is one of the best businesses to start as an entrepreneur. Dubai is a perfect destination for a drop shipping business as there is a high internet penetration. Also, the eCommerce sector in the region is on a growth track.
Drop Shipping business in Dubai is a low capital-intensive business. However, the entrepreneur must take an eCommerce license in UAE to conduct online sales. They can take office space in any of the Free Trade Zones or on the mainland.
As there is no requirement of storing the goods, there are no warehousing or storage facilities required. The Free Trade Zones in UAE will be an ideal choice for starting a Drop Shipping Company for investors.
A few of the best Dubai-based Free Zones for eCommerce Licenses are the Dubai CommerCity, Dubai Airport Free Zone, Dubai Silicon Oasis – IFZA, etc. Similarly, in the northern emirates Sharjah Media City, Sharjah Airport Free Zone, and Sharjah Publishing City are ideal for setting up a Drop Shipping Company in UAE.
What is Drop Shipping in UAE?
Drop Shipping is a process where the selling of goods online takes place without actually holding any stock or inventory. Additionally, the vendor sells the products and asks their suppliers to directly ship the goods to the customers.
Hence, the main area of focus for the entrepreneur is to market and sell the products. Consequently, the suppliers and manufacturers will facilitate the sourcing and delivery aspect of the products.
The entrepreneur will be creating an eCommerce website, connecting with customers, identifying the right products to sell, etc. The success of the drop shipping business is the customer network. Also, the people must be made aware of the products and benefits to enhance sales.
Steps in Setting up a Drop Shipping Company in Dubai
The dropshipping process is a straightforward business model that anybody can venture into. UAE is a perfect place for starting a drop shipping company. The investor must follow a few steps in setting up the drop shipping company in Dubai successfully.
1. Do a Market Research
Do market research to identify the list of products you want to sell. Also, study the competition and work out the feasibility of selling the items efficiently without delays.
2. Identify the Niche
Identify the right product category and identify the demand requirement of the product. Selling niche items will help in realizing revenue faster.
3. Find Suppliers
Locate a reliable supplier who will facilitate the sourcing, shipping, and logistics of your dropshipping business. Quality of products and timely delivery is an important aspect when choosing suppliers.
4. Choose the Company Structure
Choose the company structure for your drop shipping business depending on the number of shareholders. In mainland. the company can be registered as a Limited Liability Company or a single-owner company.
Similarly, in a Free zone, the investor can set up either a Free Zone Establishment or a Company based on the number of shareholders.
5. Choose the right Business Jurisdiction
Based on the cost of setting up a company, office rent, and other business requirements, the investor must choose the right business jurisdiction in UAE.
As Drop shipping just requires a back office for managing invoices, supplier relations, marketing, etc., being in a Free Zone is beneficial for the investors.
There are many benefits such as meeting room facilities, well-furnished offices, networking opportunities, and more.
6. Get the eCommerce Trade License
Obtain the eCommerce Trade License from the chosen business jurisdiction. In Dubai, an eCommerce License can be obtained at AED 14,900.
Also, there are various eCommerce License packages for investors to choose from in Dubai based on their business requirements.
7. Setup an Online Store
The investors can set up their online store in UAE by creating a website for their e-commerce store or by partnering with Noon and Amazon.
There is a high internet penetration and online shopping acceptance is high in UAE. It is a perfect place to launch an eCommerce store. A vibrant website with all the latest products will attract customers to the online store.
8. Update your Product Niche
Constantly conduct market research and stay updated in the eCommerce sector. Add new products to the website and eliminate products that are out of trend.
Cost of Starting a Drop Shipping Company in Dubai
The cost of starting a drop shipping company in Dubai includes the eCommerce license fee from the Free Zone, the office space rent, and furnishing expenses.
An eCommerce License in Dubai will enable entrepreneurs to easily launch their drop shipping company and start selling goods through the online platform. An eCommerce License from Dubai’s popular Free Trade Zone can be obtained for AED 14,900 with a one-visa quota.
Finally, the cost of website development, managing the website, and marketing expense must be considered while calculating the overall expenses of a drop shipping company in Dubai.
To set up a Drop Shipping Company in Dubai the investor will have to submit a few documents. The respective Free Zone or Mainland authorities will review the application and issue the Trade License.
- Shareholder Passport Copy and Photograph
- Proof of residence for shareholders
- Duly Filled Application form for the respective Free Zone
Frequently Asked Questions related to Drop Shipping Company in Dubai?
Most of the investors who are about to venture into the Drop Shipping business in UAE will have many queries. Following are a few of the doubts all investors will have.
Is Dubai the right place for Drop Shipping?
Yes, Dubai is a perfect choice for setting up a Drop Shipping Company. The City offers many advantages to investors. The Air, Sea, and Land Connectivity makes it easy for importing items from abroad. Also, there are more than 200 nationalities living in UAE which is a large addressable market.
Again, the business infrastructure in Dubai is top-class. Additionally, the ease of doing business and finding genuine suppliers who have a good network in Dubai is relatively easy. Hence, overall, Dubai is the first choice for setting up a drop shipping company.
Which License is required for Drop Shipping in UAE?
For a drop shipping business in UAE, having an eCommerce License is mandatory. The investor can open an online store and facilitate the sale of the products. They can engage with trusted suppliers in UAE to deliver the items to the customer’s doorstep after making a sale.
How to grow the Drop Shipping business in Dubai?
The Drop Shipping Business in Dubai has multiple growth opportunities. Online media is an effective channel to promote the Drop Shipping Business. The niche product must be promoted in social media channels through influencers.
To gain customer confidence offer trusted products from known brands on the website. Additionally, focus on SEO practices and invest in digital marketing efforts. Constantly conduct market research and find new products and trends.
Add new products to the website frequently to stay competitive in the market. Again, by reducing the shipping time and increasing order fulfillment, the drop shipping business can get more customers.
Why should I seek the Assistance of a Business Consultant?
To obtain an eCommerce License and take an Office Space, there are a few steps to be followed, with the assistance of expert Business Consultants such as ARION, investors can easily set up and run their drop shipping company in UAE without any hassle.
Our expert Business Consultants will also support you in opening a Corporate bank account for your new company and handle all the administrative and visa requirements of the company. Talk to our business consultants right away!
Contact Us: Aurion Business Consultants