How to Start a Dropshipping Business in the UK

Starting a UK dropshipping business is similar to creating one in any other country. But there are UK-specific things to consider. These include the following:

• Finding products that are in demand in the UK
• Finding suppliers that ship to the UK
• Building a store that accepts popular UK payment methods
• Targeting your ads for UK customers

You might also need to consider opening a UK business, registering for VAT and other taxes, and ensuring your site is GDPR compliant. 

We’ve sold products on our own Shopify site and through Amazon to UK customers. By doing so, we’ve learned tons about the market. 

In this article, we’ll share our experience, give you actionable steps to get started, and look at considerations and legalities.

Keep reading to learn how to start a dropshipping business in the UK.

Key Takeaways

• Do UK-specific product research before launching a product in the UK.
• There are tons of free tricks to help keep down the cost of starting a dropshipping business. These include using a free product research tool trial, the Shopify $1 promotion, and marketing your products using your social media platforms.
• It is legal to dropship in the UK, but there are specific legal, business, and tax regulations you need to adhere to, such as GDPR, VAT, creating a business, and more.

Let’s get into it.

How to Start a Dropshipping Business in the UK Step-by-Step 

We’ve included both free and paid ways to start a dropshipping business.

While we don’t recommend dropshipping with $0, you can certainly do it on a budget. We’ll give a few tips for keeping the costs down and steps you can do for free.

1. Product Research for the UK 

The first step to creating a dropshipping business in the UK is to find a product that will sell in the UK. 

For example, in the US, many people use Roku to watch TV. We can see on US Amazon that someone is selling replacement remotes and is the current 20th best-seller in electronics. Although this is a best-seller in the US, Roku isn’t available in the UK, so wouldn’t make any sales.

So, we’ve found a few ways to find winning products to dropship in the UK.

Before we look at ways to find winning products, you need to know what to consider when looking for a winning product. These are the main things we consider to determine if a product is a winner:

• Demand - Are people actively searching and wanting to buy the product?
• Profit - How much can we buy and sell the product for? Are we going to make at least a 20% profit on each sale?
• Competition - How many other people are selling the same product? Can we compete? What can we offer that’s going to set us apart?

There are also other things to consider, like legalities, product availability, and advertising. For more information on this, check out our article How to Do Product Research. It covers everything in-depth and explores tons of methods of product research.

Use Dropship’s Free Trial - Most Accurate Free Method

Dropship offers a 7-day free trial with this link. 

You can sign up, carry out your product research, and cancel the trial before the end of the seven days. This allows you to do all of your product research with an expert tool for free.

To sign up, use the link above, enter your name and email, and create a password. You can also sign up with your Google, Facebook, or Apple account.

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Once you’ve created your free trial account, select Product Database from the right-hand menu.

The Product Database tool allows you to search through millions of Shopify products using the filters. You can see each product's sales and revenue to help you identify winning products. You can also save the products you’re interested in and analyze them over time so you can make data-driven decisions.

Click Advanced Filters and unselect all currencies, except GBP, from the Store Currency dropdown. This will only display products sold in GBP and, therefore, provide product ideas for dropshipping in the UK.

Adjust the other filters to find winning products. If you don’t know where to start with the other filters, start by adjusting the number of sales and revenue generated. These are per month, so let’s say you want to find a product that can make at least ten sales a day; you would enter 300 in the Minimum Sales filter. 

You can also select the categories you’re interested in. For example, due to the restrictions, you might prefer to stay away from certain niches, like food. To remove any food products from the display, untick the grocery box.

Press Search and scroll down to view the products that match your criteria. 

You can sort the products by price, number of sales, and more by clicking the arrows next to the heading. 

You can click on each product to view more details, explore the store, and analyze the product in-depth to help you find a winner.

Search a UK Marketplace - Best Free Forever Product Research Method

Marketplaces like Amazon, eBay, and Etsy all have UK-specific sites. 

These are the sites that UK customers visit to purchase their products. You can use them to find out what they’re buying and which products are popular. This can help give you inspiration for your own store.

There are a few ways you can use region-specific marketplaces. These are our top ways:

• Auto Complete Search Bar - Start entering the name of a product or niche and look at the suggestions from the marketplace.

For example, when we start typing Dog into Amazon.co.uk, it suggests Dog Bed.

We can then search Dog Bed and look at the next suggestions. E.g., Dog Bed Large.

Then, from there, we get tons more suggestions, like Washable, Plastic, Raised, etc.

You can then investigate these suggestions to help you find a winning product.

• Best Seller List - Most sites will have a Best Sellers list. These are all products that you know are selling well. 

You can search through these lists to find winning products.

Social Media - Best Way to Find Potential Customers

• UK Facebook Groups - Search for UK Facebook groups relevant to your niche. 

Region-specific Facebook groups can give you product inspiration and feedback that you wouldn’t have thought of. 

You can look at conversations in the group and join the groups to ask questions and get feedback on your product ideas.

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• Hashtags - You can search TikTok and Instagram for UK-specific hashtags, like UKAmazonFinds. This will show what UK customers are buying.

It is a great way to find popular and trending product ideas. It also shows the product in use, and you can look at the feedback from others in the comments.

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• Instagram Location Search - You can search Instagram by location to help you find products specific to that location. Look at local businesses and any trends to help you identify winning products.

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• UK Influencers - Find influencers in your niche and see which products they use and promote. You can also look at the comments and engagement from followers to help you find popular posts and see which products could be winners.

Use Paid Tools

There are tons of paid dropshipping research tools available.

Each tool will provide different data, tools, and features to help you find winning products. 

Some of our favorite product research tools are the following:

• Dropship (once the free trial expires) - Dropship is a product research tool that starts at $19 per month. It allows you to spy on Shopify stores to find winning products. 
• Jungle Scout - Jungle Scout is an Amazon tool that starts at $29 per month. It has product research and keyword tools to help you find winning products to sell on Amazon. As well as product research, it offers tons of other software to help Amazon sellers manage and grow their businesses.
• Minea - Minea is an ad spy tool that starts at $49 per month. You can find winning products by analyzing others’ Facebook, Snapchat, Pinterest, and TikTok ads.
• Dropship Spy - Dropship Spy isn’t a spy tool like the other three tools here. Instead, it finds and suggests products that could be winners by looking at sales trends and other indicators. The annual plan costs $9.91 a month.

If you want more information on each tool, check out the article Best Dropshipping Research Tools. It goes into depth on each tool and gives 16 additional product research tools. It also has tips on picking a tool and free alternatives

2. Find a Supplier for the UK 

Now you’ve found a winning product, it’s time to find a supplier to source it from. 

AliExpress is the most common place to find a supplier and source your products.

When you open AliExpress, the button in the right-hand corner allows you to select where you want to ship the products. Make sure this is set to the UK. This helps filter your results to only those that can be shipped to your customers.

You can then use the search bar to look for the product you want to source.

We recommend finding several products from different suppliers and contacting them. 

You can ask questions to help you narrow down your choices. Some of the questions we ask are the following:

• What is the price per piece?
• Do you ship to the UK?
• What is the estimated turnaround time?
• How long does shipping take?
• What courier do you use?
• What return, refund, and warranties do you offer?
• Do you facilitate dropshipping? (e.g., integrating with automation tools, invoicing, packaging, etc.)

If you want more information on What to Consider When Choosing a Dropshipping Supplier, check out this article with all the details.

We recommend choosing a few of the best suppliers you’ve contacted and requesting samples. You can compare the quality of the samples to help you choose your supplier. This step isn’t mandatory, and if you’re trying to start dropshipping for free, you can avoid it. However, we always think it’s worth the cost.

Once you’ve spoken with the suppliers and checked your samples, choose the one that best suits your business.

3. Create a Store for UK Buyers 

So, you’ve got a winning product and the perfect supplier. It’s time to create a store to sell your product.

And the best news is it only costs £1 with Shopify.

Shopify is our favorite platform for building a UK dropshipping store. They currently have a promotion that allows you to create an entire store and start selling for £1 per month for the first three months. This allows you to get your store up, running, and selling before paying the full subscription cost.

Shopify is super easy to use and perfect for beginners. If you need help setting up your Shopify store, check out Nawras’s YouTube video. It is a complete tutorial on Shopify for beginners.  

We like Shopify for UK selling as you can manage localization, shipping, duties, and compliance within Shopify. They also accept various payment methods UK customers use, like PayPal, Klarna, Apple Pay, Amazon Pay, and more. This can help UK customers feel secure checking out with you.

UK sites are also subject to general data protection regulations (GDPR) - we’ll cover this in the next section. Shopify has several apps you can install on your site to help keep you compliant.

4. Market the Products 

Everything is ready to go. Now, you’ve just got to generate sales. 

We usually generate the most sales from Facebook and Instagram ads. And it is the best way to generate traffic if you don’t have any brand recognition or social proof yet.

Dropship has a Facebook ad collector. It collects ads as you browse so that you can analyze and learn from them for your own campaigns. We have an entire article on Facebook Ads if you want more information about the tool.

Dropship also has a free Facebook Interest Explorer tool. It helps you discover thousands of other targetable Facebook interests for your ads.

If you’re on a budget and don’t want to spend money on ads, there are a few free ways to generate traffic to your site.

Free Dropshipping Marketing Tricks

• Product giveaway in exchange for promotion (although you will need to pay for the product)
• Promote on your own social media pages
• Send marketing emails to your existing list

5. Analyze and Optimize 

Yay, you’ve made your first few sales. 

It’s time to optimize your dropshipping business to generate more traffic and convert more visitors into customers. 

We recommend analyzing all aspects of your dropshipping business. This will include the following:

• Ads - How are your ads performing? Can you make changes to increase your clicks and conversions?

If you need help checking your numbers, Dropship has several free calculators. 

The first is the Return On Ad Spend (ROAS) calculator. This shows you what your Cost Per Acquisition (CPA) and Average Order Value (AOV) must be to remain over your ROAS target. 

The next calculator is the Break Even Return On Ad Spend (BEROAS). This will show what your product selling price and cost need to be to remain above your BEROAS.

And the third is the Cost Per Acquisition (CPA) calculator. It will show what your Cost Per Click (CPC) and site conversion rate need to be to remain under your target acquisition cost.

• Store - Are customers leaving once they open your site? Look at why. There could be issues with the checkout, payment processors, price, copy, images, load time, or anything else. Try to establish why customers are leaving and make the necessary changes.

• Returns - What is your return rate? If it’s high, contact the customers who have returned your product and ask why. You can use the reasons to improve your product and fix the issue.

• Reviews - What do your customers have to say about your product? Look at any feedback they’re leaving and reach out to them to ask how they’re getting on with the product.

This can give you tons of helpful information, like whether it meets their expectations, if there's anything else you could do to improve the product, and whether it’s being used for its intended purpose. For example, we’ve created products designed for one purpose and then received reviews that the product is being used for something totally different. 

We’ve then used this information to target an entirely new market and generate more sales.

• Automation - How are you fulfilling your orders? Are you using automation software or manually fulfilling your orders? If you’re manually fulfilling your orders, we recommend looking at automation software. This can make the process seamless for you and your customers. It also avoids the risk of manual errors.

Is Dropshipping in the UK Legal?

Yes. It is legal to both dropship to the UK and dropship from the UK.

However, there are a few things to consider. These include creating a business, declaring your income, paying UK taxes, selling legal products, and more.

Legal, Business, and Tax Obligations for the UK 

We have created and sold products in the UK. However, we’re certainly not experts in this field; this is only our experience. We can’t provide legal, business, or accounting advice. So, we always recommend consulting a professional for guidance. 

Here are a few rules, regulations, and taxes you need to be aware of and comply with to sell in the UK.

Create a Business

You might need to register for a limited company if you're selling in the UK. This can be done directly with Companies House or using a third party, like an accountant or specific software.

Registering for a limited company has several benefits if you live in the UK. These include tax benefits, separating yourself and your business, professionalism, and much more. 

If you register as a limited company, you must also register for Corporation Tax. This is a tax that’s paid on your business's profits.

GDPR

GDPR is a European law governing how personal data is used, processed, and stored.

You must ensure that your website complies with the law, as it can otherwise be subject to major fines. 

There are several things you can add to your site and do to ensure you remain compliant. This includes keeping your privacy policy up to date, receiving consent to send emails, adding a cookie banner, etc.

There are several Shopify apps that help keep your site compliant. You can also reach out to a professional for confirmation that your site is compliant. 

VAT

VAT stands for value-added tax. It is a tax that is added to most services and products that are sold by VAT-registered businesses. 

UK businesses that turnover £85,000 must register for VAT. 

Income Tax and National Insurance

If you take an income from your dropshipping business, you will likely need to pay income tax and National Insurance contributions.

Customs Duty

If you send goods from abroad to the UK, you might need to pay customs duty.

You should factor this into your product costs.

Restricted Products

Certain products are restricted from being imported and sold in the UK. 

There are also goods that require licenses or are age-restricted. 

These include firearms, explosives, certain knives, self-defense products, rough diamonds, and more [1]. 

You might also want to check if there are any advertising restrictions. Facebook restricts certain ads, including those with specific health claims, drugs and alcohol addiction treatment, prescription drugs, and more.

Intellectual Property, Trademarks, Patents, and Copyright

Intellectual Property (IP) refers to creations. This could be an invention, literary or artistic work, designs, symbols, names, images, and more. 

Copyright, patents, and trademarks are all types of IP protection. Anyone can register their creation with the government to protect it and make it easier for them to take action against anyone stealing or copying it.

For example, you might find a product with little competition and think it’s a winner. But the reason there is no competition is because it’s protected with an IP.

You can search the UK government site for trademarks, patents, and copyright-protected work.

Should You Dropship in the UK? 

Yes, there is plenty of opportunity to create a successful dropshipping business in the UK.

But, if you’re still not sure whether it’s right for you, here are a few pros and cons of dropshipping to the UK.

Pros of Dropshipping in the UK

• Advanced E-Commerce Market - The UK is Europe's most advanced e-commerce market. And online shopping is popular and normal amongst shoppers across the UK.

This suggests that the UK could be a good place to start a dropshipping store due to the popularity of online shopping.

• Densely Populated - The UK is around 40 times smaller than the US but still has a population of almost 70 million. And it is thought that the UK has nearly 60 million e-commerce users [2].

This gives you a huge audience to sell to. And the size of the country also makes fulfillment easy. If your supplier ships from the UK, you can offer fast delivery to the entire UK.

• High Demand and Growing Market -  In 2022, UK consumers spent £110.6 billion [3] online. Online sales also accounted for 26.5% of overall retail sales. This has almost doubled in ten years. 

The growth and high percentage of online sales suggest that selling in the UK could generate a high volume of sales.

Cons of Dropshipping in the UK

• Compliance - As we’ve seen, the UK has several rules and regulations you need to abide by, like taxes, opening a business, and ensuring your site is GDPR compliant. 

This can be tricky to manage. However, there are lots of resources available and experts you can contact for support. 

• Competition - Although the competition is currently lower than that of the US, the UK is a competitive market. 

We still think there is plenty of potential for dropshipping in the UK. The most important thing is finding a winning product and how you market the product.

How Much Does it Cost to Start a Dropshipping Business in the UK? 

In theory, you can start for under £10. To do this, you would have to do the following:

• Use free product research methods, like the Dropship free trial, social media, or marketplace research.
• Find a supplier, but don’t request product samples.
• Use Shopify’s £1 for three months offer. 
• Market your products with a low budget. You can do this in a variety of ways, like running ads on a very restricted budget, using your own organic social media following and offering your product for free in return for promotion.
• Manually manage orders by contacting your supplier every time an order is placed and updating your customers manually with their shipment details rather than using a paid automation tool.

If you want more tips on How to Dropship for Free, check out our article that goes into depth and has tons of tips about dropshipping with no money. 

But this only covers the dropshipping part. It doesn’t cover the cost of consulting an accountant or registering your UK business. Registering a limited company in the UK costs £12 if you want to do it yourself. Alternatively, you will need to pay an accountant or use paid software to do so.

We don’t recommend dropshipping on such a low budget. This is for several reasons, including the following: 

• Not requesting samples means you can’t check the quality of the products you’re selling. So if the products you’ve sold are poor quality or not as expected, customers will request returns and refunds. This could end up costing more than the price of samples.
• Depending on your order volume, manually managing your orders can be difficult. It is easy to make mistakes or miss orders. A fulfillment tool takes away the risk of errors but will usually require a paid subscription.
• Testing and running Facebook ads can be expensive, but we’ve found they help us generate the most sales.

Frequently Asked Questions 

Is It Legal to Dropship in the UK? 

Yes, it is legal to dropship products to the UK and to run a dropshipping store from the UK.

Can Anyone in the UK Start a Dropshipping Business? 

Yes, anyone over the age of 18 can start a dropshipping business themselves. 

If you’re under the age of 18, you will need a parent or guardian’s help as you can’t open a business bank account.

Can I Dropship from the UK? 

Yes, it is legal to dropship from the UK.

Can I Dropship to the UK? 

Yes, it is legal to dropship products to UK customers.

Can I Dropship on Amazon in the UK? 

Yes, if you stick to the rules. Amazon has a few stipulations, including that you must be the seller of record of your products, identify yourself as the seller of your products on all packing slips, invoices, and packaging, and be responsible for accepting and processing customer returns. 

It does push its Fulfillment by Amazon (FBA) service as an alternative. However, this would require you to invest in stock instead of dropshipping. 

Can I Use AliExpress to Dropship to the UK?

Yes. In our experience, we’ve never had a problem with suppliers shipping our products to UK customers. We recommend asking the supplier to confirm their fulfillment, delivery, and shipping times to the UK before you commit to using them.

Final Thoughts

Hopefully, this article has explored everything you need to know about starting a dropshipping business in the UK.

To start your UK dropshipping product research, check out the Dropship Product Database tool using the 7-day free trial.