Dropshipping UK: A Complete Guide 2024

Dropshipping UK, you said? You have come to the right place. The dropshipping process in the UK is similar to other countries. The main difference is that in the UK, you have to register your business and pay taxes.

Today, you will learn the following things:

• Why the UK is an excellent dropshipping market
• Steps to dropship in the UK
• General UK dropshipping taxation rules
• Where you find UK based suppliers and a reliable supplier
• Tools you need to sell online

In the end, you should be armed with the correct information on how to start a dropshipping business in the UK from start to finish!

Why Dropship in the UK?

A dropshipping business in the UK is a good idea because the revenue forecast is positive. Experts project that the dropshipping UK industry revenue of the country by 2030 will hit USD 78 billion.

Here is a chart from the Horizon Grand View Research:

This projection is merely for dropshipping. If we take the entire retail industry, the United Kingdom has a market size of 280 billion USD for 2024 alone, and it is expected to grow to 750 billion USD by 2029.

These numbers prove that dropshipping is not dead. The UK, being open to global trade, is also an ideal dropshipping target because it is one of the most mature online markets in Europe.

Here are some more reasons why you need to dropship to the UK:

• The population is 69 million; this is huge enough to find an audience or customer base for any niche
• A high internet penetration rate of 97.8%
• More than 55% of Gen Z are making ecommerce business purchases
• UK customers are spread in a wide range of interests, such as clothing, shoes, books, and cosmetics

The British also have a positive attitude to online shopping. There is little fear of fraud, as compared to other countries like South Africa and Nigeria. Most UK residents say that when they want to purchase something, they first look at online options.

All these, combined, plus a powerful tool like Sell The Trend, make dropshipping in the UK an absolutely wise move. At best, one should get started now. The earlier you start, the more leverage you have as the dropshipping retail segment grows over the years.

Tax Obligations for UK Dropshipping

A disclaimer before we begin: this is not legal accounting advice. It is best that you consult a qualified accountant if you have a dropshipping business in the UK. This section merely serves as a guide, but your taxes will always depend on your business structure.

Value-Added Tax or VAT

VAT currently stands at 20% and this applies to a vast majority of goods and services. Some items may have a lower VAT percentage, but most are at 20%. To understand VAT taxes, you should visit the UK VAT Rates page.

Income Tax

Dropshipping is a business, and all businesses must pay income taxes. There is also a thing called corporation tax, and the amount you must pay depends on your tax bracket.

The default corporation tax in the UK is 25%. If your ecommerce business made more than £250,000 profit, the main rate applies to you. Please note that the basis is profit margins, not gross revenue. On the other hand, if your company made less than £50,000 profit, the tax rate is only 19%.

Other laws govern the UK taxation rate. There are ring fence profits, allowances, reliefs, single-rate corporation taxes, etc.

Customs Duties

This is another common form of tax that applies to products shipped from abroad. The rate is 2.5% of the item’s cost. However, a special rate may apply if the item’s cost is less than £630.

Who pays for customs duties? Is it the ecommerce store operator? The person who bought the item will pay for customs duties. As a dropshipper, you must take this into account in your pricing, as most customers may not even know that they must pay this.

Our advice is to at least inform the UK customer that the government, particularly the Royal Mail, will contact them and ask them to pay not duty and delivery charges. It would come as a surprise and may upset your buyer.

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

There are five main steps to get started dropshipping in the UK. These are:

1. Choose a niche
2. Pick winning products
3. Select a platform
4. Build your social media
5. Market your store

If you are in the UK, you must register your dropshipping service or business. This registration depends on your business structure.

As an individual or sole proprietor, register your business with HM Revenue and Customs. As a partnership or corporation, do this with Companies House.

1. Choose a niche

Although the dropshipping UK industry is huge, it is ill-advised to just sell random products. Your dropshipping business will only succeed if you penetrate a niche.

What is a niche? It is a category of products, like clothing, toys, kitchen gadgets, etc. You can create an online store that covers a broad niche, or you can choose to concentrate on a particular sub-niche.

How does this work? Clothing, for example, is a broad niche. A sub-niche can be women’s clothing, men’s clothing, or kids’ clothing. Shoes are also a sub-niche. A more specific one is sports shoes for women.

The main benefits of choosing a niche are:

• The ecommerce store is easier to manage
• You can easily build your brand
• Customers will know what your store is about

You can turn your store into a specialized or expert store

You must do this step, so you do not spread yourself too thinly. A small niche is where you should start. This way, you can find reliable suppliers for your ecommerce business before you expand later.  For more guidance, you can read our in-depth article about the best dropshipping niches:

2. Pick winning products

The second step to a successful dropshipping store is to choose a winning product. It plays a crucial role in customer satisfaction.

What is a winning product? Simply put, it is a product that sells. To give you more details, below are the characteristics of a winning product:

• There is a huge demand
• The product is of high-quality
• It has to be reasonably profitable
• The shipping is fast

Of course, you must find dropshipping UK suppliers who can fulfill these orders quickly. The challenging thing is that it is hard to find winning products manually.

The good news is that you can always rely on Sell The Trend. It has an AI that gathers data for tens of thousands of products. All you need to do now is decide which one you want to sell.

Here is an example:

To give you perspective, this product is new. There is only one supplier and right now, only two stores are selling it. The product score is excellent, which means this is a winner waiting to be discovered by buyers.

3. Select a platform

The next step in building a dropshipping UK business is choosing the platform. Here are the most common ones:

• Shopify
• Amazon
• Etsy
• eBay
• WordPress with WooCommerce

The trouble with all these is that they may not be compatible with your software for trustworthy suppliers. To go around this, you can use Sell The Trend’s SellShop. It is a dropshipping store builder, and it instantly connects with Sell The Trend’s product finder.

The main benefit of using this tool is that you can instantly add products to your dropshipping business. You no longer need to think about integration and compatibility.

4. Build your social media

Next, you need to plan which social media platforms to use in marketing. This decision has a dependency on your product type.

Here is a quick view of what each popular social media is best for:

• Twitter / X – good for political and religious items like shirts
• Facebook – best overall for all kinds of products
• YouTube – best for products that need demonstration, like kitchen gadgets
• Instagram – best for beauty products like make-up, bodybuilding, etc.

Each platform has a certain type of audience. At the very least, you need a Facebook page and a Google Ads account. These two are important in reaching a wide range of audiences and target customers. In the UK, Facebook and WhatsApp are the two most popular social media platforms.

To learn more, please read the blog post: Google Ads vs Facebook Ads: What’s Best For Dropshipping?

5. Market your store

Finally, you are ready to market your store. You need to shoot videos of your product. Generally speaking, videos are the best way to go. Photos will still work, but they simply do not compare against the power of a video.

You can use tools like Canva to create a video. Or, you can contact your dropshipping suppliers for one. However, more often than not, you need to make do with what the dropshipping suppliers already have.

The good thing about Sell The Trend is that you can create a video right from the product research tool. Here is how it looks:

Once you click the CREATE VIDEO button, you will see this:

All you need to do now is follow the prompts, and you will have a video ready for marketing! Our advice is to take baby steps with paid marketing. What it means is that you must experiment with different ad types, target audiences, demographics, etc. Analyze the results, and then decide what to tweak so you can reach the right audience.

Top Dropshipping UK Suppliers

There are a ton of dropshipping suppliers, but not all of them are created equal. In this section, we will focus our attention on the best dropshipping UK suppliers only.

1. Sell The Trend

While Sell The Trend is not exactly a manufacturer, it has a massive repository of products where you will find dropshipping suppliers. What makes Sell The Trend different is the depth of information you can find on each product page.

Earlier, we have seen a screenshot of a product page. Here, we will look at the details to help you see that Sell The Trend is one of the best tools for finding reliable suppliers.

Once you enter a keyword and hit SEARCH, you will see thumbnails of various products like this:

The next step is to click on a product that gets your attention. In this example, we will select the phone case with the highest rank score.

If you look to the right, you will see all the stats you need to decide. This product has a high-profit margin, with only one dropshipping supplier. 19 stores carry this item. You can also see the revenue for this product and the number of customer orders.

What matters most on this page is the PRODUCT INSIGHTS RATING at the bottom right. A score of 4.8 means it is an ideal product to sell—it is a winner.

This rating is not a customer review. It is a score that Sell The Trend gives each product to guide dropshipping business owners in their decision-making process.

The product research tool is called NEXUS. It is a proprietary technology of Sell The Trend that uses advanced artificial intelligence. All in all, NEXUS not only provides you with the best dropshipping UK products, but it also reduces your workload.

2. SaleHoo

SaleHoo is a product and dropshipping supplier database. Manufacturers and wholesalers upload their products here, provided that they pass SaleHoo’s requirements.

Here are the top features of SaleHoo:

• More than 2.5 million products to choose from
• Over 8,000 vetted suppliers
• Has a Market Research Lab
• Integration with Shopify

Most of the dropshipping suppliers in SaleHoo are sellers in AliExpress. What makes SaleHoo useful is its vetting process. Any supplier who wants to sell here has to meet certain conditions, not only during the application process but for as long as they are offering their products.

What this means for you is a guarantee that the suppliers here are reliable. All of them understand that SaleHoo is for dropshippers. Since there are over 8,000 suppliers, it is possible to find multiple suppliers for the same product.

3. Printify

Printify is a print-on-demand (POD) dropshipping supplier. Well, they are technically not the supplier, but they have a tool to make dropshippers and suppliers work together.

Print-on-demand is a business model where:

• You choose a product with no print
• You design that product on Printify’s system
• You will get a digital mock-up of the finished product
• You post that digital mock-up in your dropshipping stores

Once a customer buys from you, you must place the order in Printify. The seller or POD dropshipping supplier will print the design on the product, and then ship the item to your buyer. They all do international shipping.

POD is an excellent dropshipping UK option, especially for those who want to build a standard brand and design, or theme. There are many products you can choose from, such as t-shirts, mouse pads, coffee mugs, yoga mats, and so much more.

Best Tools to Use for Dropshipping in the UK

There are many tools you can use for dropshipping, but the most important ones are:

• Product photography
• Store builder or store platform
• Product research and importation tool
• Video maker for marketing
• SEO and text-to-speech AI

All these tools exist in Sell The Trend, except product photography, SEO, and text-to-speech AI.

1. Sell The Trend

Sell The Trend is an all-in-one dropshipping tool. With Sell The Trend, you can find winning products, find dropshipping suppliers, build your store, and process orders.

Sell The Trend Best Features

NEXUS Product Finder

We have explored the product finder earlier, and you can see that it offers information that you are not likely to find if you merely combed through AliExpress. The product finder helps you decide if a product is worth adding to your store or if you are better off looking for another one.

Store Intelligence | Dropshipping Suppliers

This feature allows you to spy on other e-commerce stores. Just type the URL in the box and click on SEARCH.

Here is an example:

This overview tells us that this site’s monthly traffic is 23,000. The average price of products they sell is $335. This average price is their selling price, not their average revenue per sale.

What can benefit you the most is the order count. In this case, they sell around 580 customer orders, on average, per month. It tells us that their products have a demand. Scrolling down further, we can see this:

The chart on the right can tell us where they derive sales. Direct is the highest, which means the people directly to their site. Social means that the sale came from somebody who saw either their post or ad on a social media site.

With the Store Intelligence tool, you can claw information out of stores that you normally would not see. This information allows you to analyze what your competitors are doing, which you can copy or use as an inspiration.

Store Builder

You no longer have to build a store on WooCommerce, Shopify, or BigCommerce. Once you sign up for an account, you can build a store within the Sell The Trend hosting universe for free (free trial). This branch or arm of Sell The Trend is called SellShop.

The store builder offers you various themes that you can edit and personalize. By design, all elements were built with e-commerce and conversion or sale in mind. For example, SellShop already has built-in product pages, so you no longer have to design them yourself.

The main advantage of using SellShop is that it is automatically integrated with Sell The Trend. Once up, the next step is to import products, and your store should be ready to launch in minutes!

2. Flair

Flair is a product photography AI. It is an important tool for dropshipping so you can edit product photos and make your ads and product pages more enticing.

The common problem with product photos from suppliers is that they are ordinary. They lack style. Flair gives you the tool to make your product photography more attractive.

Here is a sample:

There are many backgrounds to choose from, and you can even stage scenes digitally. It means that you can add props to your product photography like you would in real life.

3. ChatGPT and ElevenLabs

ChatGPT is an AI you can use to write scripts, product titles, and product descriptions. It is currently one of the most powerful AI today, and it is free.

Here is a sample:

You can ask ChatGPT to:

• Tell you what words to use in your marketing campaign; use this to master SEO for your dropshipping business
• Give you a script for your ad
• Provide feedback about your script or product description

ChatGPT has a text-to-speech program, but it does not compare with ElevenLabs. The latter is a better option, and you can use I to generate voiceovers for your ads. It is cheaper to use AI to produce a voiceover than to hire a real person.

ElevenLabs offers many voices, and you can also clone yours. Once you are satisfied with ChatGPT’s script, you can upload that script to ElevenLabs and create a narration or voiceover.

How to Market Dropshipping Products in the UK

Once your dropshipping UK business or store is ready, the final step is to find people and take them to your store. These people are what you call traffic. There are two main ways by which you can drive traffic to your store: organic and paid.

Organic traffic refers to site visitors who found your website naturally. The most common ways they can find you are:

• Search results in Google Shopping
• Search results for articles
• Your pages on social media

On the other hand, paid traffic or site visitors are those who went to your website because they saw your ads. The best sites to advertise are Google Ads and social media.

Marketing is a huge challenge for all businesses. How does dropshipping work, you ask? It works by choosing products that are in demand and finding people online who are interested in what you sell.

At best, we recommend the following as primary steps in your marketing efforts:

• Blog – write and publish blog posts on your store. These posts must be helpful to your target consumers.
• Social Media – create social media accounts for your dropshipping store and build a community. Do not just post items for sale. What you want to do here is to gain people’s trust and confidence.

It is also important that you create a YouTube or TikTok channel where you can share videos about your products. Again, the content of your video should not be sales in nature. Create content that educates or entertains your audience.

Paid marketing is next, but we highly suggest that you do this slowly. A lot of dropshippers burn money with paid ads, only to realize that it is harder than it looks. Paid advertising requires extensive experience to succeed.

FAQ: Dropshipping in The UK

Is dropshipping legal in the UK?

Yes, dropshipping is legal in the UK. You must register your business and pay taxes to avoid any legal hiccups later on.

Is drop shipping still profitable UK?

Yes, dropshipping is a profitable venture. Dropshipping businesses belong to online retail or e-commerce, which shows positive growth projections over the next five years.

Which dropshipping is best in the UK?

The best ones are niches that sell the most, such as fashion, footwear, and cosmetics.

Is dropshipping successful in UK?

Yes, dropshipping is expected to grow to USD 78 billion in the UK by 2030.

Which platform is best for dropshipping in the UK with dropshipping supplier choices?

Sell The Trend is the best platform for dropshipping.

How do I start dropshipping for beginners UK?

Start by deciding on a niche. You can also take Sell The Trend’s FREE dropshipping course.

How much does it cost to start dropshipping UK?

The cost is negligible. You can build a store for free today.

Do you pay tax on dropshipping UK?

Yes, dropshipping is a legit business and you have to pay taxes.

Summary

From here, the next step is to list down the niches you want to target. Next, sign up for a free trial account with Sell The Trend. Then, use the NEXUS product finder to determine what products fit your niche. You can then move forward to building your store, registering your business in the UK, and marketing your goods to UK consumers.