How to Start a Dropshipping Business in Australia (2023)

If you have been thinking of starting an online business and would like to follow in the footsteps of some of the local successes here in Australia, your first thought might be to wonder what to sell. Maybe you’ve dreamt of owning your own store but you don’t make anything, but have lots of interests or a keen interest in a particular niche.

This is where a dropshipping business can take away all of your worries about buying and stocking hundreds of items and especially having to bankroll such a scheme.

With dropshipping, you do not need to manufacture your own products, nor do you need to purchase stock for your store – which is why so many beginners use dropshipping to break their way into the ecommerce business.

Dropshipping can be seen as an order fulfilment system in which your business won’t actually keep any of the products you sell in stock. In fact, your business model will have you purchase products from a third-party supplier in order to meet and fulfil the orders you receive.

In essence, you will act as the middleman to find customers who want a particular item, and then order ahead for them to get the customer what they want in a timely manner. This type of business can be extremely successful as long as you market and advertise well, as well as find the right niche market to expand into.

So, if you are looking to start an ecommerce business but don’t have thousands of dollars to fork out upfront – then dropshipping may well be the best investment you never have to make up front!

What is dropshipping?

Dropshipping is an order fulfilment option that allows ecommerce businesses to sell a product without keeping it in stock. Rather they do it by purchasing directly from a third party; it can be a manufacturer, a wholesaler or any retailer.

So here, the seller doesn’t require to manage the inventory or any shipping responsibilities themselves. And this is what differentiates dropshipping from a traditional retail setting and makes it a popular option among businesses.

So, this is exactly how dropshipping works:

• Customers place their orders from the ecommerce site.
• The seller receives the order.
• The order is automatically forwarded to the dropshipping supplier.
• The supplier ships the order.
• Customers receive their product.

How does dropshipping work in Australia?

According to Statista, in Australia, the revenue in the ecommerce market is estimated to reach AU$59.17bn in 2023. Also, the revenue is expected to grow annually at the rate of 10.77% from 2023-2027. So, Australia eventually provides a massive opportunity for ecommerce. And dropshipping is the highly demandable way that turns it easier to take advantage of the massive ecommerce market.

You must learn about legal products, business licenses and tax obligations from the beginning. With the right strategy, dropshipping in Australia will be highly profitable. Businesses are not only required to sell to other Australians. Instead, they can ship products anywhere. Compared to the dropship model, wholesale in Australia is way more expensive as well, especially when it comes to shipping internationally.

7 simple steps to start a dropshipping business in Australia

1. Finding a niche

One of the best ways to ensure your ecommerce dropshipping business hits the road running is to find a particular niche that isn’t served well by other sites on the internet, if at all. One of the best ways to do this is by performing a little market research on the initial ideas you have, and see if that particular niche is served well.

Make a list of the top best products from popular categories for dropshipping. A study by Allied market research shows the performance of some of the high-selling dropshipping products category.

For instance, the market for mobile phone accessories is flooded with tens of thousands of websites, with products costing as little as $1. Trying to make headway into this market is going to be a real struggle unless you can offer something truly unique or niche.

If you focussed on a niche relating to mobile phone cases that are 100% recyclable and biodegradable, then you have found your niche! A niche like this is a good option because you can easily market the items that stand out from the crowd. You can advertise and market these dropshipping products on climate change websites, and recycling centres and have a real chance of breaking through the market.

Of course, having an even narrower niche may mean that the size of your potential customer base may dwindle, so it is good to perform as much research as possible before deciding on a niche that will serve your business well, as well as serve your future customers.

2. Perform research on the competition

One great way to get ahead in the online dropshipping business is to take the time to perform some market research on your competition. Have a look to see how many ecommerce stores sell the same types of products or are in the same category as you.

You may find that one company has cornered the market in a particular product, making it more difficult for you to make a space for yourself, but if you take your niche in a different direction, there could be enough room there to grow a space, especially if you are selling a product that is very much on-trend at the moment.

Having the best tools at your disposal is key to ensuring that you stay ahead of the competition, and one of the best tools around to help you out is Google Trends. This handy tool lets you search for keywords and terms that are related to the particular niche that you want to start your dropshipping business around, and allows you to see the popularity of your products by year and month to give you a great way to judge when the best time is to launch a particular product line.

Most shopping websites will allow you to search for an item and then order the page results by listing their popularity as well as orders placed. This is a great way to tell how popular certain products are, and why the most popular products are sold.

Look for similar competing products that lie within your dropshipping business niche and ascertain the importance of that difference, to give you the edge when choosing products to sell in your store.

If your store is filled with extremely popular products, on-trend and also lists likely popular products in the future, then your dropshipping business could be the next big thing.

3. How to choose a dropshipping partner

One of the most asked questions about dropshipping for beginners is how do I choose a dropshipping partner? And how do I know which dropshipping partner is right for me? Well, this can often come down to your location, if you want to provide international shipping and ordering, and if the products you want to sell in your store are easily and readily available to be shipped out.

For instance, it is possible for you to spark up a reliable partnership with a local business that sells customised plant pots, which will ship them directly to your customers once they have made orders from you. This is a great way to start a local business, but things get extremely complicated when wanting to expand to international shipping.

There are many dropshipping partners online that offer worldwide shipping at extremely low shipping rates compared to home-grown Australian manufacturers. The whole point is to save on shipping fees and to offer your customers a really easy and reliable way to get international products, with a national or local business that they can deal with.

Some of the largest dropshipping partners include Ali Express, Alibaba, Worldwide Brands, Megagoods and Doba. These are the powerhouses of the dropshipping world and offer just about any consumer product imaginable at low prices.

Better yet, these large dropshippers are often integrated directly into website creation and hosting companies such as Shopify, making the integration of orders and sales in a single place easy as pie.

4. Building your online store

After you have chosen your niche market and have performed all of the marketing needed to ensure that you’re on the right track, the next step is to start building your online store. There are many different ways of going about this, and there are even more of a range of costs involved, depending on your starting point.

One way is to Hire a local, Australian website creation company to handle all of the technical aspects of making your website. Companies such as WebCommander are experts in providing all of the necessary tools and functions needed to create and launch a fully-functioning dropshipping ecommerce website, with a high level of customisable options available.

These website creation tools are the simplest introduction to dropshipping that even a novice can ever wish for, helping integrate dropshipping partners and suppliers into a simple, clean interface with all of the options available when it comes to styling and looks.

What’s more, using a local company you can trust is the best way to ensure peace of mind, allowing you to keep on track with your chosen niche site, and giving you a hands-free approach to a dropshipping business with a fully integrated dropship partner integration.

In addition to creating your website through a third-party website creation company, it is often the case that they will offer a full suite of marketing and advertising options for the most reasonable of costs. Just think, if you were to build the dropshipping website via a third party and then you’re advertising through another, marketing through another, it would create unnecessary complexity in your business model.

Choosing one company that can help you with the majority of your website hosting and marketing needs will simplify your business model, leaving you free to find the next big thing in online retail!

5. Register your business

When you are selling products as a business, you’ll need to register for an ABN to do business with dropshipping suppliers. It is not just a legal requirement; even many dropshipping suppliers simply keep it as a prerequisite to doing business.

Generally, in Australia, you might need to obtain an Australian domain name with an ABN and apply for other business permits and licenses. You might also need to pay attention to income tax and good and service tax when dropshipping.

The whole process is designed to be as simple and as quick as possible. To register for an ABN number or for GST and other taxes, just head to the official website of the business registration service and apply for all required registrations in one place. As far as you provide all the needed documents and information, you will get your ABN number immediately after completing the application form. Or in case there is some issue, your application will be reviewed within 20 business days.

Also, any products featuring copyrighted brands or logos, dangerous weapons or age-restricted items need to be avoided.

6. Advertise and market your business

Professional dropshipping website builders are a great way to help you market and advertise your website and products within a simply understood ecosystem. Many of these sites allow you to get help with search engine optimisation and search ranking tools built into the products and tiers they offer you.

This helps you to get on with the task of running your business’s finances and be on the lookout for new products to add, rather than delve into the somewhat confusing and technical nightmare of the back-end system.

Dropshipping in 2023 is currently a booming sector within Australia, and with many more people aware of the ease and simplicity of starting their own ecommerce business, now is a great time to invest in your financial future.

Thanks to the availability of dropshipping suppliers in Asia being so close to these shores, Australia is one of the best places to target as your main market. Never before have so many options been available in terms of suppliers and partners, that just about any type of industry is ripe for the picking when it comes to serving a potentially huge customer base.

7. Audit and analyse your store

Once you have found your niche market, created your store, advertised and marketed your site and are starting to bring in orders, the next step in your online business checklist is to audit and analyse your stores’ financial situation.

It may sound like a lot of hard work, and at first, it may well be, but with the number of tools available to your business through your partner companies, you will be able to keep track of stock, prices and orders made, giving you a huge benefit when it comes to understanding your customers more.

These customer insights will play a very important role in determining the profitability of your ecommerce store, as well as the future direction you intend to take it. Whilst you may have hoped to be running a business that sells one particular product, you may find a number of surprising items that sell so well, that you may wish to pivot your store to enhance sales and reach.

Pivoting your store to match your customer demands is made so much easier with dropshipping, as you won’t have to sell off old stock, you won’t have to purchase new stock, you can simply find the best suppliers that sell the items your customers demand, and make new dropshipping deals.

In many cases, changing your whole store to pivot into a different niche is as simple as adding the products from your supplier directly to your website with a few simple clicks. This is one of the fundamental reasons why new small business owners are clamouring to start their dropshipping business to expand their business.

Conclusion

The online dropshipping business is currently booming in Australia, with more people than ever taking advantage of the low start-up costs and near-instant access to the ecommerce market. Whilst dropshipping might not be for everyone – there is still plenty of room for brick-and-mortar stores to expand, but unless you have the funds to invest, ecommerce could be the simplest and most rewarding investment of 2023.

With the help of the many website creation companies available today, you can be up and running with your dropshipping business within hours. This type of business does require a lot of research to find a niche, and which on-trend items you’d like to sell in your e-store, but even a beginner can start, run and succeed in creating a dropshipping business.

With set-and-forget options thanks to third-party partner sites, this could turn out to be one of the most lucrative passive income ventures you’ve ever had the chance to be involved in!