How To Start Dropshipping In Germany
Why start dropshipping
Many people dream of a profitable business that serves customers all over the world. If you are one of them – you’re in the right place.
Dropshipping is the business that provides equal opportunities to everyone.
It doesn’t matter whether you are an islander or a resident of a busy metropolis.
If you want to secure a better future for yourself and your family, you can easily set up an online business that will bring you money at any point of the globe.
You don’t need to manufacture products or to buy them from someone in advance. All you need is stable Internet access and an online store. From here, your business journey begins.
How dropshipping works
Why start dropshipping in Germany
Ecommerce is a crucial part of Germany’s retail sector, making it an excellent location to launch a dropshipping business.
For 2023, Germany’s B2C e-commerce market reached a revenue of €85.4 billion, with projections pointing to steady growth in the coming years, this market presents a golden opportunity for entrepreneurs.
Starting an online store in Germany has the potential to yield significant profits. So, if you’re considering dropshipping, now is the perfect time to dive in.
So, if you’ve been looking for the opportunities to break out the routine and become your own boss, you’re in the right place at the right time. Starting your dropshipping business in Germany can bring your search to an end and make your dreams come true.
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Advantages and disadvantages of dropshipping in Germany
Advantages of dropshipping in Germany
1. Low initial investment
One of the biggest advantages of dropshipping is its low barrier to entry. Since you don’t need to purchase inventory upfront, you can start your business with minimal capital. This is especially beneficial in Germany, where operational costs like warehousing and logistics can be expensive.
2. Access to a thriving ecommerce market
Germany is Europe’s largest eCommerce market, with a 2023 revenue of €85.4 billion. Popular product categories such as fashion, electronics, and home goods dominate the market, making it a lucrative space for dropshippers.
3. No need for inventory management
Dropshipping eliminates the need to store, organize, and manage inventory. Your suppliers handle stock and shipping, allowing you to focus on marketing and customer service. This advantage is particularly significant in Germany, where warehousing and storage costs are high.
4. Scalability
With dropshipping, scaling your business is simpler compared to traditional retail. You can easily expand your product range or target audience without worrying about logistics. Germany’s excellent digital infrastructure ensures that scaling your operations is seamless.
5. Work from anywhere
As a location-independent business model, dropshipping allows you to work from anywhere in the world. In Germany, this flexibility is appealing to entrepreneurs who value work-life balance and remote work opportunities.
6. Reduced risk
Since you don’t buy inventory in bulk, you face lower financial risks. If a product doesn’t sell, you simply remove it from your online store without incurring losses, which is ideal for testing trends in the competitive German market.
7. Access to diverse suppliers
Germany has access to a wide range of suppliers, both domestic and international. Using reliable suppliers ensures faster delivery times and higher product quality, which are critical for maintaining customer satisfaction in Germany’s competitive market.
Disadvantages of dropshipping in Germany
1. Tight profit margins
The ease of starting a dropshipping business means high competition, leading to lower profit margins. In Germany, where customers value affordability and transparency, pricing your products competitively without undercutting profits can be challenging.
2. Dependence on suppliers
Since suppliers manage your inventory and shipping, you’re highly dependent on their reliability. Delays or errors on their part can result in negative customer experiences, which can harm your reputation in the German market.
3. Complex taxation rules
Germany has strict VAT regulations that require compliance when selling to customers. Dropshippers must register for VAT if they exceed certain thresholds or sell to other EU countries, adding administrative complexity to the business.
4. Shipping challenges
If your suppliers are based outside Germany or Europe, shipping times can be lengthy, frustrating customers accustomed to fast delivery. Additionally, customs fees can complicate international shipping, affecting your pricing strategy.
5. Intense competition
Germany’s eCommerce market is highly competitive, with large players like Amazon and Zalando dominating the space. Competing against established brands requires innovative marketing strategies and unique product offerings.
6. Lack of control over quality
As a dropshipper, you don’t handle the products directly. This lack of control can lead to issues with product quality, which is problematic in Germany, where consumers place high importance on quality standards.
7. Customer service challenges
Handling customer complaints or returns can be tricky in dropshipping, as you rely on suppliers for resolution. German customers, known for their high expectations, may not tolerate delays in resolving issues.
Is dropshipping in Germany worth it?
Despite the challenges, dropshipping remains an attractive option in Germany, thanks to the country’s robust ecommerce market and consumer demand. By addressing its drawbacks—such as choosing reliable suppliers, ensuring VAT compliance, and focusing on customer service—you can build a successful dropshipping business.
Tips for successful dropshipping in Germany
- Partner with German or EU-Based Suppliers: This reduces shipping times and improves reliability.
- Focus on Niche Markets: Identify untapped niches to minimize competition and maximize profitability.
- Invest in Marketing: Leverage platforms like Google Shopping, Instagram, and Facebook to attract customers.
- Understand German Consumer Behavior: Offer high-quality products, transparent pricing, and reliable shipping to meet local expectations.
Dropshipping in Germany offers immense potential, but like any business, it requires effort and strategy to succeed. By carefully weighing its advantages and disadvantages, you can make an informed decision and tap into the lucrative German eCommerce market.
What to dropship?
How much can you make with dropshipping?
How far you can go with dropshipping: real-life experience
$350,000+ In A Year: Felix Shares His Experience Of Dropshipping In Germany
FAQ
Is dropshipping legal in Germany?
Yes! When you are dropshipping, you are not ‘fooling’ anyone, and you are not breaking any laws. You are simply helping other people receive the items they want - and enjoy the perfect customer service you provide.
However, pay attention to your choice of products. It is illegal to sell branded, copyrighted items, or things like weapons (even their sports or hunting models), knives, smoking mixtures, etc.
How much money do I need to start?
At least $150 is necessary - let’s do the maths.
If you have some technical skills and can assemble and set up a website yourself, you will need around $150.
First of all, you will need to buy a domain name (a good one costs about $10-15, and you will need to pay this fee every year to prolong your registration).
After that, you need a hosting: a server that makes your store info visible to the Internet user. You can use the basic hosting service from AliDropship (‘Silver Plan’) and only pay $69 per year.
Then, you will need to install WordPress, which is absolutely free, and buy AliDropship plugin, which costs $89. It should be enough: WordPress + AliDropship make a proper basis to create a fully functional dropshipping store.
If you don’t have these technical skills, you can order a ready-made store based on the AliDropship plugin. It will be made for you personally by an expert team: the specialists will even add the first products to your store. So, technically, it will be ready to sell items from day 1. The basic ready-made dropshipping store costs $299; together with the annual domain fee, you will have to pay $310-315 to launch your business.
How to choose the store niche?
First, it should be something that you really like - or, at least, know deeply. You will be picking products, making advertisements, and advising customers, so you absolutely need to be a pro in this.
Also, this niche should be popular with buyers and easy to promote online. Here is a complete niche selection guide that will help you!
What country to target?
Living in Germany, you are not limited to your local market. You can serve customers all over the globe, even in the countries of Europe and North America. Remember your store niche and think who might be interested in these products. Where do these people live, most likely? That’s your target region!
Where to find the products?
AliDropship plugin lets you easily import products on your dropshipping website. Basically, it transfers the products’ titles, descriptions and images in a single click. So, all you need to do is browse and find good quality products from reputable sellers.
Alternatively, you can use a database of over 50,000 selected products which are guaranteed to be in high demand. This database is available within AliDropship plugin: you can see it when you go to the Import section of your AliDropship-based store. The best part is that all the products’ titles and descriptions are already edited there, so you won’t spend your own time doing this yourself.
If I sell products, how can I compete with itself?
AliExpress is a large shopping platform where sellers offer everything at once. At the same time, your niche dropshipping store is focused on a specific range of products. Surely, you are more client-oriented than a large-scale store, and this is why buyers will choose you over.
Will my buyers know they are actually buying items?
It’s not likely. Even if they see Chinese names/addresses/characters on the wrapping paper, it won’t tell them anything. Lots of warehouses and manufacturing facilities of the largest global companies are situated in China, so there is nothing strange if a buyer receives a package of the Chinese origin.
Also, you can write your suppliers directly and ask them not to put any promotional materials into the package. Sellers are always glad to partner with dropshipping store owners because this partnership is profitable, so they will be happy to help you.
Will my buyers agree to a long delivery?
Long delivery itself isn’t a problem. Your customers are not buying life critical items from you, so they don’t mind waiting - especially, if you offer them an appealing price and a low-cost shipping.
Besides, you can choose the ePacket delivery method which cuts up the delivery time significantly. With ePacket, it will take the packages 7-15 days to arrive.
What if a buyer asks me for a refund?
Refunds are the responsibility of the original suppliers. Usually, they refund low-cost purchases really quickly, so there is nothing for you to worry about.
How to promote the store?
To make profit from your store, you first of all need to attract traffic to it. There are lots of ways to promote your store online for free, so pick the ones you personally like. Also, read the free marketing tips for dropshipping business: an experienced team brings them to you every week!
Will WordPress or AliDropship limit my activity and charge business fees?
No. The only recurring fee is the domain fee - you will have to pay for it every year, otherwise, your site won’t be visible on the Internet.
WordPress is completely free, and all the AliDropship solutions only require a one-time payment. Whatever AliDropship tool or service you get, you remain a full owner of your business. There are no limits on the amount of orders you can accept, or the volume of profit you make, or the quantity and the content of the products you import, etc. You are your own boss!
Free Dropshipping Guide
