Dropshipping in the UAE – 2022 Guide

If you have an entrepreneurial mindset and a knowledge of e-commerce, then setting up a dropshipping business in Meydan Free Zone can be a very exciting opportunity. The United Arab Emirates is one of the most internet-connected countries in the world, and the leading e-commerce market in the Gulf Cooperation Council region. The UAE saw $3.9 billion in e-commerce sales in 2020 according to the trade.gov website, and this market is expected to reach $8 billion by the year 2025. These figures indicate that dropshipping could be a very exciting market to enter today.

In this blog we will discuss:

• What is dropshipping?
• How does the buying and selling or receiving of goods work?
• Does it need a distribution network? Do I need to partner with a logistics company?
• What kind of financing is required to start a dropshipping company
• Drop shipping in the UAE – advantages & opportunities
• How to start a dropshipping business in the UAE
• Top five dropshipping suppliers in the UAE
• Do I need a licence to start a dropshipping business in the UAE?
• Cost of starting a dropshipping business in the UAE
• How to grow a dropshipping business
• Is dropshipping legal in the UAE?
• Why choose Meydan Free Zone for your UAE dropshipping business?

What is dropshipping?

Dropshipping is an ecommerce business model where the vendor does not hold any stock themselves. Instead, they display products on their website, and ask their supplier/the manufacturer to ship the product direct to their customers.

How does the buying and selling or receiving of goods work?

Put simply, a dropshipping business owner is a ‘middleman’. Your role is to find interesting products to sell online and market them to customers. You take payments from customers then pass the order onto the supplier, while retaining a share of the profit.

Most dropshippers begin by building a website that is targeted at a specific audience. They then seek products for sale on large B2B marketplaces (such as AliExpress). The dropshipper then agrees a deal with suppliers of each product they sell, whereby the supplier will deal with order fulfilment. This approach is beneficial to both parties; the supplier may not have the knowledge of the dropshipper’s market, so they can therefore find new markets for their products. It also benefits the dropshipper since they do not need to hold large amounts of stock.

Does it need a distribution network? Do I need to partner with a logistics company?

No, the dropshipper does not need to set up a distribution network themselves – the manufacturer will take care of this. The customer can choose what type of shipping they want, and pay for this themselves.

It is sensible to verify that the manufacturer is able to deliver products in a reasonable timeframe. If it’s going to take weeks to ship orders placed through your website, customers may be unhappy and either request a refund or they may not purchase from you again.

What kind of financing is required to start a dropshipping company?

The main costs involved in starting a dropshipping company in Dubai are the costs of applying for a business license, and the costs of setting up an online store, and marketing. Besides this, the costs of starting a dropshipping company are relatively low. If you find a successful niche, it can even generate a ‘passive income’ for you.

Dropshipping in the UAE – advantages & opportunities

Starting a dropshipping business in the United Arab Emirates could be a very profitable enterprise if you have a good understanding of consumer trends, a sense of what products are likely to become popular, and a strong knowledge of e-commerce best practices.

There are several advantages and opportunities that come with starting a dropshipping business in the United Arab Emirates, including:

• Digital and e-commerce ready: As noted above, internet penetration in the United Arab Emirates is one of the highest in the world. At the same time, e-commerce has seen a big expansion in the country in recent years, meaning that people are accustomed to shopping online.
• Still a young market: While e-commerce is already popular in the United Arab Emirates, this is still a relatively young market, and is expected to more than double in size in the next few years. This means that there are still plenty of opportunities for your dropshipping company to find its niche and become a real success.
• Geographic location: The United Arab Emirates is situated at the crossroads of Asia, Europe, and Africa. Dubai is also one of the world’s biggest ports and trade hubs. This means that your dropshipping business is truly connected to global logistics and know-how, which will mean it might be quicker to ship products from foreign destinations to the UAE and vice versa.
• Business friendly culture: The government of the United Arab Emirates takes a positive view of entrepreneurialism and dropshipping is absolutely legal in the country. With great quality internet connection and quick business setup, starting your dropshipping business in Dubai is very easy compared to many other places around the world.

How to start a dropshipping business in the UAE

Starting a dropshipping business in the United Arab Emirates especially in Meydan Free Zone is fairly straightforward – so long as you have a good understanding of how the dropshipping industry works. Here are some simple steps to starting your dropshipping business:

1. Choose a dropshipping business idea: It is vital to find a niche for which there is genuine demand.
2. Do competitor research: It’s important to find out how much your competitors are charging, how they brand and market themselves, and what’s unique about them. You can then differentiate yourself, whether that is through price, quality, branding or something else.
3. Choose a dropshipping supplier: Finding a reliable dropshipping supplier who is able to support how your business works and provide the kinds of products you want to sell is vital. Spend some time getting to know different suppliers and browsing the products they have on offer. Read reviews and speak with their sales teams before committing to a relationship.
4. Build your e-commerce store: Although it is possible to run a dropshipping business through websites like amazon.ae or noon.com, most dropshippers can make more money by selling directly through their own website. You could use an e-commerce store building website like Shopify to sell your products direct to consumers.
5. Decide on a business structure: If you’re basing yourself in the UAE, there are various business structures you could choose from, from a sole proprietorship through to a limited liability company. At Meydan Free Zone, we can advise you on the most appropriate business structure for your circumstances.
6. Get your finances in order: To start a dropshipping business and become profitable you need to regularly monitor cash flow and ensure that you are pricing your products at the correct price point.
7. Market your dropshipping store: To get customers spending on your website you need to market your dropshipping store by using things like search engine optimisation (SEO), influencer marketing, Facebook ads and so on.
8. Analyse and improve your offering: Continually work to make sure that your business is adapting and seek out new opportunities.

Top five dropshipping suppliers in the UAE

There are many different dropshipping suppliers serving the UAE market, but our favourites include:

1. AliExpress
2. SaleHoo
3. Worldwide Brands
4. Megagoods
5. Doba

Do I need a licence to start a dropshipping business in the UAE?

Yes, you need a business licence to start a dropshipping business in the UAE. At Meydan Free Zone, we can set you up with a business licence and also supply you with a flexi-desk and a guaranteed IBAN, in addition to your business licence (so long as you pass our security checks).

Cost of starting a dropshipping business in the UAE

The cost of starting a dropshipping business in the UAE with a Meydan Free Zone licence is AED 12,500. If you are a foreigner and need a visa, we charge AED 1,850 for each visa required. Besides providing a quick and smooth process to get your dropshipping licence, we also provide many other solutions, including our Easy Payment Plans that let you spread the cost of starting your business. We also offer an impressive location in attractive offices in central Dubai.

How to grow a dropshipping business?

Once your dropshipping business is up and running, there are several things you can do to grow your business, including:

• Monitor social media and dropshipping websites to discover new trends
• Work with influencers to promote your products
• Invest in SEO and digital marketing to win more customers
• Offer a fantastic service that encourages people to return
• Adapt your business with new products and marketing techniques to stay ahead of the curve

Is dropshipping legal in the UAE?

Yes, dropshipping is legal in the UAE as long as you get your business licence from a reputed free zone like Meydan Free Zone.

Why choose Meydan Free Zone for your UAE dropshipping business?

Meydan Free Zone is the ideal location for starting a Dubai dropshipping business. We are located in the centre of Dubai, close to warehouses, logistics businesses as well as the sea and airport. We provide you with 24/7 access and internet connection, which means you are perfectly set up for working with customers around the world, and speaking to suppliers in different time zones. We offer e-commerce licences in Dubai, and our experts can help you with every stage of business setup in Dubai. We offer a range of packages for dropshipping businesses, including flexi-desk options, which means you have everything you need to succeed in dropshipping in Dubai.