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How to Start Dropshipping in Australia (Guide for 2022)

Written by, Shushan Khachikyan

Updated May, 26, 2022

If you’ve spent any time browsing about how to make money online, you’ve probably noticed dropshipping mentioned all over the place. For the most part, that’s because technology has progressed to the point where just anyone can create a successful dropshipping business. 

Marketplaces like Shopify and Etsy have simplified sourcing and selling products online. In this article, I’m sharing everything about how to start dropshipping in Australia in 2022 and succeed.

What Is Dropshipping?

Dropshipping is a business model based on the sale of goods from the supplier’s warehouse without pre-purchasing products. Simply put, you’ll take the place of a middleman who takes orders from customers and sends the products to them. 

As a retailer, all you need to do is keep an online store — you don’t need to hold any inventory, meaning you don’t have to:

  • Rent your own warehouse
  • Have a budget for the purchase of products
  • Register a company
  • Buy cash register equipment

This business model allows owners of online stores to sell the products under their own brand and easily expand the range — dropshipping suppliers can have different product categories. 

The main difference between dropshipping and a typical retail store is that no product is held by a retailer, which can be a great advantage regarding self-assessment. 

How Does Dropshipping Work in Australia?

The dropshipping process includes three steps:

  • Step 1: Customer orders a product from your website
  • Step 2: Merchant forwards order details to the supplier
  • Step 3: Supplier delivers the product to the customer

Dropshipping is a relatively easy way to start a business in Australia, considering there are almost 26 million people with one of the world’s highest eCommerce spending per capita of $1,764

From a business perspective, dropshipping in Australia works by finding a supplier or two that can fulfil your orders and offer good customer service.

How to Start Dropshipping in Australia

Dropshipping has become a popular business model in Australia, but how to start a dropshipping business that is profitable and successful? Follow the steps below to learn how. 

1. Decide on the Product

The most fundamental step is conducting comprehensive market research. When you can’t tell what products will be bestselling, try to look into trending products.

If you want to sell something on a large scale, it’s best to pick a product that is high quality and not locally available. Try to find products that are as unique as possible.

2. Know All Dropshipping Costs

How to make money with dropshipping? Analysing the prices is vital for all new businesses but knowing that you’re making a profit is vital.

Your pricing strategy will play a big role in the success of your business. When you browse products, you’ll see what the supplier will charge you. Then, you can set a fixed price to be added to your products or a percentage markup.

3. Find Suppliers

Suppliers are entities that can deliver items to Australian customers via local warehouses or international ones. Thus, effective Australian suppliers can be located anywhere in the world but must possess the ability to deliver orders to any Australian location. 

To find a suitable supplier, you can visit local, national or international trade shows where you can talk face-to-face with manufacturers and wholesale distributors. 

4. Register Your Business

Finding out what custom taxes will be applied to your product before starting a dropshipping business in Australia is necessary. You need to register for a GST/HST account if you sell products or services that are taxable and your worldwide revenue exceeds $75,000 or more.

It’s also mandatory to register for an ABN (Australian Business Number) through the Australian Taxation Office (ATO). 

5. Make an eCommerce Store

Check some dropshipping business ideas and then make an eCommerce store to sell your products. Even with a minimal budget, you can find a website design agency to build your store and get you started.

You should make your eCommerce store look as professional as possible to build customer trust and loyalty. 

6. Selling on Online Marketplaces

Aside from your own e-store, being present on online marketplaces in Australia will increase your chances of selling. 

Social media sites such as Facebook, Instagram, Pinterest and Twitter are great platforms for building awareness about your store and some even for selling (Facebook). While on eBay and Amazon are also known as high-potential marketplaces for dropshipping businesses. 

7. Think About Customer Service

The better you can support your customers, the more you can ask them for. By providing excellent customer service, you’ll have more loyal customers, get better customer feedback/reviews, and deal with fewer returns or refunds. 

You can collect customer reviews by sending review requests post-purchase. 

8. Marketing Strategy

Nowadays, setting up a store is easy. However, if you have no customers, you’ll never be able to sell anything. You need to create a solid marketing plan to attract users to your site. 

You can start by creating ads and optimising your blogs without hiring a marketer in the first place. Try to construct your marketing plan early and even before your store goes live, if possible.

Tips to Boost Sales

How to dropship in Australia and make your first sales? It’s the question that’s on every dropshipping newcomer’s mind. Let’s look at tips to increase sales for your dropshipping business. 

Email Marketing

Email works so well because your customers choose to opt-in to hear more from you instead of getting targeted by paid promotions. 

There’re email marketing tips that you can utilise in your dropshipping business. For example, you can implement personalisation using your email software provider, which as a result will make customers more likely to engage with your products and remain subscribed

Blogs

A blog is one of the best ways to boost sales and increase traffic on the site. It can bring more traffic, more targeted customers, more engagement, relationship-building opportunities and more ways to promote your products. 

When people search for a product that you sell, there are more chances that they’ll visit your website due to the published blog linked to the product. 

Customer Reviews

According to Consumerist, nearly 70% of customers use online reviews to learn about products. What you can do is leverage reviews by adding ratings to your products. Also, you can start a competition to drive customer reviews.  As a part of the review, you can also enable customers to upload pictures of the product.

Getting customer reviews is the perfect way to involve buyers in the decision-making process and drive the conversion.

SEO Practices

Optimising your store for search engines will increase your organic traffic, especially if you manage to rank on the first page of Google for a given keyword. Learning best SEO practices isn’t really that time-consuming, and you can use tools like MOZ, Semrush, and Ahrefs to see which keywords can bring you more traffic. 

Optimise your headlines, product descriptions, metadata, internal link structure, and navigational structure for search and user experience.

Paid Advertisements

Paid advertisements are the quickest way to generate sales for your eCommerce store, and if done properly, paid traffic can be quite affordable and take your business to the next level. 

In addition, paid advertising on social media can offer some of the best opportunities for reaching your exact target audience. Namely, you can run Facebook ads, Instagram ads, and TikTok ads that meet your budget and goals. 

Pros and Cons of Dropshipping in Australia

Dropshipping seems perfect, but like everything else, it has advantages and disadvantages. Understanding these pros and cons over more traditional models of commerce will help you optimise your new business for greater success.

The Pros

  • Easy to start When you don’t have to pay for a warehouse, it’s much easier to start your business. You only need to open an online store to attract potential customers to them.
  • Cost reduction — Dropshipping is a good opportunity for individual and small scale sellers who want to earn money but don’t have the required start-up capital.
  • Flexible location  Your business can be located anywhere. If you have an internet connection, good relationships with your suppliers and can communicate with your customers, then you have the freedom of the open road.
  • Diversity of products to sell — When you pre-purchase inventory, it’s easier and cheaper to buy a small variety of products in larger quantities, but in the case of dropshipping, you can offer a wider selection of products to your potential customers. 

The Cons

  • You can’t control the quality If the product is low quality or delivered late, your reputation can suffer. When it comes to dealing with disappointed customers, you have to deal with suppliers’ mistakes.
  • High competition — Dropshippers usually sell trending products. You’ll have to spend more on advertising and work on content in order to stand out from competitors. 
  • Shipping issues — You have no influence on the supply chain operations, meaning that as a seller, you cannot control the quality of products or how fast orders are being delivered. 

Is Dropshipping Worth It in Australia?

The Australian market provides many opportunities to expand online business or to start dropshipping. Success in dropshipping requires business skills that will develop over time if you’re willing to constantly learn. 

Remember, it takes time to sell your first item, you should give your dropshipping business time to become established and grow. Who knows, your success might just be around the corner.

FAQ

Do I need an ABN for dropshipping in Australia?

Before importing goods into Australia, dropshipping businesses need to register an Australian Business Number (ABN) at the Australian Taxation Office (ATO). You also must register with ATO for a few different types of taxes including GST and corporate income tax.

Is Australia good for dropshipping?

Australia is the seventh-largest market for eCommerce. The country’s eCommerce revenue growth rate and market penetration grow significantly with each passing year. 

Is dropshipping legal in Australia?

Dropshipping is legal in Australia. However, you still need to abide by the local regulations. First and foremost, you should take care to only dropship legal items. This means you should not dropship copyrighted, dangerous, or age-restricted items. 

How do I legally start dropshipping?

To start a dropshipping business in Australia, you need to abide by the local regulations. Every dropshipper in Australia should offer legal products, settle tax obligations and adhere to eCommerce regulations.