Dropshipping is an online business model where the retailer does not have a physical store. They do not stock the products themselves but instead order them from the supplier, who ships the product directly to the customer.
It can seem like a scary prospect for those who have never done it before.
After all, you’re giving up ownership of your inventory and revenue streams. However, with the right mindset and a plan, it can be a great way to start your own business or even a side hustle.
In fact, there are thousands of dropshippers out there making money every day. If you’re ready to get started, you’ve come to the right place.
This post will teach you everything you need to know about starting a dropshipping business in Europe.
By the end, you will have all the knowledge required to make the leap toward starting your own business.
Let’s get started!
Dropshipping in Europe: 5 Essential things to know
Running short on time? No problem!
In the list below, we have summarized the five most important things to know about starting a dropshipping store in Europe:
- Be aware of Europe’s three main advantages. There are many great countries to target, the competition is not as fierce as in the US, and the ecommerce market is growing.
- Try to find a dropshipping supplier from Europe. This will shorten your delivery times! (Find the best suppliers from Europe in this article.)
- Set up ‘Europe-specific’ local payment methods. Some European countries use their own payment options. For example, Giropay is popular in Germany, and iDEAL is popular in The Netherlands.
- Targeting a specific market may be an excellent choice. For example, you could create a German store targeting only German customers if you know the language.
- Register for One Stop Shop. This will allow you to easily comply with your VAT tax obligations when running an ecommerce store in Europe.
How do you start dropshipping in Europe? (8 steps)
Are you ready to start your very own dropshipping store in Europe?
If so, that’s awesome!
In the following section, we have highlighted the eight main steps on how to start a dropshipping store in Europe:
Note: These steps will only be covered briefly, as this article mainly focuses on the specifics of starting a dropshipping store in Europe and not the general process of starting an online store.
If you’re interested in a more detailed explanation and more tips about these steps, check out this article here!
Step 1. Decide between a general, niche, or one-product store
One of the first things you will have to decide when starting a dropshipping business in Europe is choosing a type of store.
And guess what? Each of them comes with its unique benefits and challenges!
Generally, we recommend starting with either a niche or a one-product store. This is because the pros and cons of these types of stores generally outweigh those of a general store.
In short, it will be easier to build a long-term dropshipping store with a niche or one-product store!
If you would like to learn more about the difference between general, niche, and one-product stores, check out this article!
Step 2. Pick out the right products to sell online
If you’re just starting out with dropshipping, you might have a hard time deciding what to sell.
However, this is no decision to overlook. Your product, together with your supplier and marketing, is one of the most crucial aspects that will determine the success of your dropshipping store.
It’s common to see that some products are relatively easy to sell while others are fairly hard to sell.
The ‘easy’ products are also called ‘winning products‘ and often have some common properties, as you can see here:
So, try thinking about these characteristics when looking for products to sell!
Tip: Finding a winning product is much easier with a product research tool. Some awesome tools are Sell The Trend, Niche Scraper, and Thieve.co.
You can also take our product research tool quiz here to find the best tool for you!
Step 3. Define your ideal target audience
After deciding which products you will sell, it’s time to start defining your target audience.
Your target audience is the specific group of people that are targeted in your marketing campaigns. These people often have similar interests, hobbies or are similar in age or gender. In short, you expect them to have the highest chances of purchasing your product!
The most common methods to define your target audience are developing a buyer persona, analyzing the benefits your product offers, or simply testing different audiences to find the best-performing one.
For a detailed step-by-step guide on defining your ideal target audience, check out this article!
Step 4. Find a dropshipping supplier (in Europe)
The next step is to find a dropshipping supplier for your dropshipping store.
This is a company that will stock your product and sends it to your customer once you get an order:
When searching for a supplier for your store, make sure to learn how you can spot a good dropshipping supplier. In short, it’s all about the following things:
We will tell you all about the best dropshipping suppliers in Europe in the ‘tips’ section below, so stay tuned!
Step 5. Pick your preferred ecommerce platform
Your ecommerce platform is the base on which you will build your online store. Choosing a platform that is easy to use, has excellent features, and has good reviews will definitely help with your dropshipping store’s success.
The best ecommerce platform out there depends on your goals and preferences. For instance, do you want the platform built specifically for dropshippers, or are you looking to start with the cheapest platform out there?
We will tell you more about the best platform for a European dropshipping store below, so read on!
Step 6. Design and brand your dropshipping store
Once you’ve registered for an ecommerce platform, it’s time to start designing and branding your store.
Make sure to spend some effort on this. You don’t want to give your visitors the impression that your entire store was created in just a couple of days!
While building your dropshipping store, it’s a good idea to take some inspiration from some of the best players in the industry. You will be able to find some great inspiration here:
Step 7. Set up your international and European payment gateways
The next step is to set up your payment gateways.
A payment gateway enables a customer to buy something from your online store. It handles all money transactions for an online store.
When starting a dropshipping store in Europe, remember to research which payment methods are popular in the countries you are going to target and set these up for your store!
You will be able to find some popular payment gateway combinations in this article.
Once this step is finished, you can start focusing on getting your first few orders!
As said, it’s now time to attract some visitors and receive your first orders!
The process of promoting your store is called marketing. Without it, your customers simply won’t find your store.
There are several methods by which you can market a dropshipping store. Here is a brief guideline of which marketing method fits you:
You will be able to find more information about each of these marketing methods in these articles!
6 Tips for starting a dropshipping store in Europe
To be successful with dropshipping in Europe, you’ll want to make sure you have everything you need in place.
Setting up a dropshipping store isn’t as complicated as it may sound, but it’s definitely something you want to plan for.
Here are some of our best tips to keep in mind as you set up your store in Europe:
1. Use an ecommerce platform that supports your European business
As mentioned before, picking an ecommerce platform is an essential step during the start of your European dropshipping store.
There are many ecommerce platforms to choose from, so picking the best one can be challenging.
The platform that fits you best depends on a few things.
For instance, do you have the budget to spend on a platform with a bit more features? Or are you looking for the platform with the best SEO performance because you want to market your store organically?
Whatever it is, the following table may help you decide which platform to pick:
And if you are still not sure, let us give you our recommendation.
Remember that you can always read our review of them (link in the table above) before starting if you have any doubts!
2. Find a dropshipping supplier with a European warehouse
Finding a dropshipping supplier is another essential step when starting a dropshipping store in Europe, so it’s a good thing to focus on!
You’ll need to find a reliable manufacturer that can provide you with the products you need at a price you’re comfortable with.
One of our best tips when it comes to suppliers is to look for a local supplier first.
So, when starting a dropshipping business in Europe, it would be great if you could find a supplier that offers a European warehouse.
The main advantage of dropshipping with suppliers outside of China is the speed of the delivery.
If you’re dropshipping with a supplier from China, the product often has to travel halfway across the world to reach the customer. As a result, shipping times can range anywhere from 7 to 60 days.
By using a supplier that is based in the same country as your customer, you will be able to get that shipping time down to just a few days.
Sounds incredible, right?
If you want to discover some fantastic dropshipping suppliers from Europe, you will be pleased to hear that we wrote an article covering the 14 best dropshipping suppliers in Europe.
You will find some of the most popular European suppliers in the following table:
3. Determine and offer the most popular local payment methods
When starting a dropshipping store in Europe, you must think about the preferred payment methods of your customers.
If you don’t offer these, they may leave, and you could lose sales!
You receive payments from your customers through so-called payment gateways.
These third-party companies make sure all funds go from your customer’s account to your own account safely and smoothly.
Most of you will be familiar with international payment gateways like PayPal or credit cards.
However, some European countries also have their own ‘national’ payment system for online purchases. And if you will be targeting those countries, it’s important to offer those payment gateways!
Here are some essential local payment gateways for the most popular European countries:
- Germany: SOFORT / Giropay
- France: Cartes Bancaires
- Norway: VIPPS
- Spain: Bizum
- Denmark: MobilePay / Klarna
- The Netherlands: iDEAL
Tip: If you’re struggling to choose the best payment gateway for your store, we recommend reading our article about the seven best payment gateways for dropshipping stores in 2022.
4. Be prepared for the costs of starting a dropshipping store in Europe
While one of the advantages of dropshipping is the low start-up costs, starting a dropshipping business in Europe is not something you do for free.
You will need to reserve a budget to invest in your dropshipping business.
For example, one of the first things you will have to buy is your domain.
We recommend checking out Namecheap as it offers one of the lowest prices for domains. Besides, it provides free privacy protection, which will keep your name and information private.
Luckily, a domain is not that expensive. For less than $11 per year, you can have your own professional .com domain! (Which you can then use as a custom email address as well.)
You may also need to pay for some dropshipping apps that add some extra functionalities to your store. However, if you choose the right apps, they may very well all be free. Check out the best Shopify dropshipping apps for beginners here!
Then, you may need to pay for your dropshipping supplier. Some European dropshipping suppliers (like CJdropshipping) are free, while others (like Spocket) are paid and often cost around $29 per month.
Once you have started dropshipping, marketing could be one of your highest costs. Some people will need a marketing budget of $250 before they see any success, while others will need $1,000-$2,000 or even more.
Here is an overview of the costs that you may expect when starting a dropshipping business in Europe:
|Domain (Namecheap)||~ $11 per year|
|Ecommerce platform (Shopify)||$29 per month|
|Dropshipping apps (costs vary depending on you)||~ $10-$50 per month|
|Dropshipping supplier||~ $0-$29 per month|
|Marketing||~ $0-$2,000+ per month|
For a detailed discussion on what costs you may come across when dropshipping, take a look at this article!
5. Register for the European Union’s One Stop Shop (OSS)
If you are dropshipping in Europe, you are likely targeting multiple European countries.
In the past, once your dropshipping store exceeded a specific (revenue) threshold, you would have to register for VAT in all countries in which your buyers are based.
Then, you would have to pay the right amount of VAT back to each of these countries, which is a massive amount of administrative work.
In 2021, this changed with the introduction of One Stop Shop, which is a general overhaul of the VAT registration and payment system in the European Union.
It was designed to make it easier for online sellers and dropshippers to meet their VAT obligations.
Now, you can register for One Stop Shop in one country and submit a single VAT report where you pay all your owed VAT. The authorities then redistribute the right amounts to the tax offices of the other European countries.
You can register for One Stop Shop through the tax authority in your country of residence.
Unfortunately, the introduction of the new VAT system also came with a disadvantage for dropshippers.
Before One Stop Shop, there was a VAT exemption for importing goods not exceeding 22 euros. However, that exemption has now been removed to give local European stores an equal competitive standpoint against online stores importing products from countries like China.
This means that all goods imported into the EU are now subject to VAT.
6. Think about starting a dropshipping store in a local language
Let’s continue with our last tip!
If you’re thinking about starting a dropshipping store in Europe, chances are you are living in Europe yourself.
So, have you ever thought about starting a dropshipping in your local language?
Think about it, if you are living in a country like Spain, do you think the Spanish people would rather purchase something from a Spanish online store or an English online store?
An online store in the local store is much more attractive, right?
And that’s the thing; by building a store in the local language, you get a competitive advantage against all other dropshipping stores built in English.
It will increase the trust of your visitors and lead to more sales!
3 Reasons why you should start dropshipping in Europe
Still in doubt about starting an online store in Europe?
If you’re wondering why you should start dropshipping in Europe, then let’s take a look at some of the advantages you get:
1. There are many great countries to target in Europe
First of all, it shouldn’t come as a surprise to your that Europe is a region, not a country.
That means there are lots of different countries you can target.
Some are not ideal, but many countries in Europe offer amazing market conditions for dropshipping stores.
When researching whether or not a specific country is good to target, it’s important to look at:
- If it offers fast shipping methods like ePacket.
- If it has a high GDP per capita (which means that the residents earn a lot of money).
- If it has a high social network penetration (which allows you to reach your customers).
- And lastly, if it has a large population (which prevents scaling issues later on).
The best countries to target as a dropshipper score very well on these criteria, and quite a few of them are in Europe!
For example, take a look at these countries:
2. The competition in Europe is less fierce compared to the US
Another awesome thing about dropshipping in Europe is that the competition is less fierce compared to a country like the United States.
The United States is the largest consumer market in the world. And therefore, some people argue that it is the best country to target as a dropshipper.
Well, the US indeed offers some excellent market conditions for ecommerce stores, but the downside of that is that everyone is starting a dropshipping store targeting the US.
Therefore, you will have to deal with much more competition compared to when starting a dropshipping store in Europe.
It is like a balancing act. The US may offer slightly better overall market conditions, but the competition will be far less heavy in Europe, and that might be an advantage for you!
Last but not least, it’s not like dropshipping in Europe is dead.
In fact, the ecommerce market in Europe is still growing at a healthy pace year over year:
Besides the well-known European countries like Germany and France, there are many ‘developing’ countries whose ecommerce markets currently grow at an astonishing rate.
For example, the ecommerce market in Greece grew by 77% in 2020, and the ecommerce market of Poland grew by 34% in the same year (source).
Sounds like a tremendous opportunity to profit from this growth and start a dropshipping store in Europe, right?
Can you also start dropshipping from Europe?
Another question you may have is whether or not it is possible to start dropshipping from Europe.
That is, by selling products that are stocked in European warehouses.
As we have already covered this question a bit, the answer is yes, you can!
You can use dropshipping suppliers in Europe to sell products stocked in European warehouses to decrease your shipping times!
Another option of starting a dropshipping store from Europe is selling European products to other countries. This happens way less often but could be worth it if you found a local supplier with a really unique product.
It’s called the reverse dropshipping model, and here’s how it works:
Note that the image gives the US as an example, but it works the same way for Europe!
Reverse dropshipping is a relatively new online business model that literally reverses the traditional dropshipping model.
It involves buying high-quality products from suppliers in Europe and selling them to wealthy people in China.
You can check out this article for more information! But as always, be aware of the downsides of this, such as high costs of goods sold and shipping costs.
FAQs about dropshipping in Europe
Starting a successful dropshipping business in Europe isn’t easy, so we can imagine that there are still some questions wandering around in your head!
Therefore, we have created this frequently asked questions section to try and answer them.
Is your question missing? Don’t worry; just write it in the comment section below, and we may add it here too!
How does dropshipping in Europe work?
Dropshipping in Europe works in the same way as dropshipping in any other region. You can choose to work with a Chinese supplier like AliExpress or a local (European) supplier like Spocket. Both of them can be great options!
Is dropshipping in Europe legal?
Yes, dropshipping is a legal business model in Europe. As a retailer, you aren’t obliged to have a product you sell in stock or possession.
Still, remember that you should register your dropshipping business in your country of residence and comply with all laws regarding consumers, online stores, and taxes. Getting a clear insight into these laws is best done by consulting with a professional.
Is dropshipping in Europe profitable in 2022?
Yes, the region’s healthy and growing ecommerce market makes dropshipping in Europe a profitable activity.
However, profitability is never guaranteed! It is always possible to lose money when starting your own business.
How do you find customers when dropshipping in Europe?
You can find customers in Europe by using various marketing strategies. Popular ones include Facebook Ads, Google Ads, and influencer marketing.
Plus, having a blog is another great way to find customers who are interested in your products and services.
Do you have to pay VAT when dropshipping in Europe?
What is the best dropshipping supplier in Europe?
How much money do you need to start dropshipping in Europe?
You’ve already learned a bit about the expenses you can expect from a dropshipping business in Europe from our fourth tip.
Generally, the costs of starting a dropshipping business are relatively low at the start and increase when scaling your store. To start a dropshipping business in Europe, we recommend having a starting budget of at least $300.
How do you choose the best niche for a dropshipping store in Europe?
We recommend picking a dropshipping niche that interests you or that you are passionate about.
If you want to get some inspiration and see the possibilities, check out our 25 best dropshipping niche ideas here!
There it is!
Our guide on how you can start your own dropshipping store in Europe.
As you’ve seen and read, starting a dropshipping store isn’t as simple as you may have thought; you will be starting your own business after all!
However, for a business, dropshipping is a relatively simple business model!
It comes with low start-up costs, and you can build your entire store from behind your laptop or computer.
That’s amazing, right?
If you have any questions left about dropshipping in Europe, don’t hesitate to ask them in the comment section below.
Want to learn more about dropshipping?
Ready to move your dropshipping store to the next level? Check out the articles below: