Dropshipping in UAE – A Complete Guide

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A dropshipping business is a great way to start your business journey into the e-commerce market in the UAE. If you want to start a dropshipping business in the UAE, you will need to obtain a trade license. Remember, dropshipping is legal in the UAE. As a business owner, you are allowed to start dropshipping business in Dubai.  

In this blog, we will discuss all the details about how dropshipping works, the steps involved in obtaining a trade license, tips on how to start it, its pros and cons, the best dropshipping suppliers, and many more. 

Let’s continue reading more about dropshipping in the UAE and how to set up your own business in Dubai. 

Introduction 

Before starting your business in the UAE, you must have basic knowledge about dropshipping. If we define dropshipping, then it involves operating a business by accepting online customer orders. The orders are through a website or social media without holding inventory or shipping products yourself. It is the best choice for young entrepreneurs looking for a start-up with minimal capital requirements. Moreover, you must find a particular niche to target. By selling a unique product, you can target specific age groups. It will lead to increased sales. It might take time to research and analyze the competition in your areas of interest. But trust us, it will all be worth it.  

For export and import products to buyers in the UAE, you must require a business trade license before you start any business activity or drop shipping in the UAE. You can obtain it through the Department of Economic Development (DED).

How does dropshipping work in the UAE? 

As we discussed above, dropshipping is a kind of e-commerce business structure. You need to obtain an business license. In this business, online retailers do not invest in physical inventory to sell their products. However, when there is an order replacement, the retailers then buy the item from the manufacturers. The retailers still do not need to worry about the shipment. The manufacturers deliver it directly to the customer. Dropshipping is easier to manage as there is no need to handle shipments or any stock management. It gives you the audacity to work more on marketing and customer services. That’s how you can increase sales and orders and ultimately your profits.

Steps to set up a dropshipping business in Dubai

To start a drop shipping business includes several steps to follow. The steps include:

1. Get a trade license

The first step is to obtain a business trade license before setting up your dropshipping business in Dubai. It is regulated by the DED in Dubai. Obtaining a trade license also includes a few steps, such as: 

i. Choose a business activity.

Identify the exact nature of your business. Check the business activity list on the Department of the Economic Development website and choose the relevant activities that you will conduct. Choosing the right business activity helps you in obtaining the right business license in Dubai.  

ii. Choose a business structure.

It is the foremost important step. Choose a business structure that goes well with your future goals. You can choose from different options. The options include Sole proprietorship, a shared branch, or LLCs.  

iii. Select a unique trade name.

Now is the time to choose at least three unique trade names. The reason is that a name must be unique and should not be registered before in Dubai.  

iv. Get initial approvals. 

The next step is to get all the initial approvals from the relevant authorities in Dubai or UAE.

v. Sign Memorandum of Association. 

After getting initial approvals, draft and sign the Memorandum of Association and Articles of Association (AoA), if required. 

vi. Submit the required documents. 

Submit all the required documents to the Department of Economic Development. The documents include: 

  • Passport copy of all shareholders 
  • Resident visa copy of all shareholders 
  • Signed MoA 
  • Emirates ID copy of all shareholders 
  • Passport-size photos  
  • Application form  
  • Articles of Association (AOA) 
  • No Objection Certificate or other required documents.

vii. Pay the fees. 

Once you submit all your required documents, the next step is to pay the DED license fee. After the payment, you are ready to collect the dropshipping business license.  

2. Choose a niche

Now that you have obtained a business license for dropshipping. It is time to decide your niche. The niche belongs to certain targeted markets based on your area of expertise. We advise you to aim for a niche that is trending and has the potential to bring business. 

3. Arrange a supplier

After choosing your niche, now arrange suppliers. Finding a reliable dropshipping supplier is very important. Keep in mind that when you select any product from a supplier, it should be of high quality. The supplier must also offer reasonable and competitive prices. 

4. Create a dropshipping platform

The last step is to create a platform that goes well with your dropshipping preferences and needs. You can build your website or buy an existing one. You are ready to start now!

A person scanning a parcel with a phone in her hand.

Pros of dropshipping in the UAE 

A dropshipping business set up in the UAE is relatively easy with the right guide. You don’t need a physical store or inventory, and the cost of starting a dropshipping business is low. Simply obtain the necessary dropshipping license and grow your business. Other benefits of having a dropshipping business in the UAE include: 

#1. Low initial investment 

Dropshipping does not require you to purchase inventory upfront. It reduces the need for a large initial investment. It is beneficial for entrepreneurs looking to start an online retail business in the UAE. 

#2. Minimal risk 

Since you do not hold inventory, you do not have to worry about handling stocks and inventory management. So, no need to manage the inventory. No financial loss is involved.