Dropshipping

What is dropshipping?

Dropshipping is a sales model within e-commerce where you as a seller offer products in your webshop, but the inventory and shipping are handled by an external supplier. You act as an intermediary: you sell the product, but have it shipped directly from the manufacturer or wholesaler to the customer. In brief:

• You manage the web shop and marketing
• The supplier handles inventory, packaging and shipping
• You do not need to have warehouse or inventory management skills

Practical example:

A customer orders a wireless charger through your Shopify web shop. You automatically forward that order to a Chinese supplier, who ships the package directly to the customer. You receive the difference between the sales price and the purchase price.

How does dropshipping work in practice?

Dropshipping sounds simple, but there is a lot involved. The power lies mainly in optimizing your processes, supplier selection and managing customer expectations.

Roadmap dropshipping:

Automation

These days, you can automate most of the process. Think order processing, inventory updates and even return handling via plug-ins.

Is dropshipping legal in the Netherlands and Belgium?

A frequently asked question is, "Is dropshipping legal?" The short answer: Yes, dropshipping is allowed in both the Netherlands and Belgium. But you must follow the rules regarding VAT, product safety and customs.

Note these points of interest:

ECC Tip: Do you sell from outside the EU to EU customers? If so, you must comply with the Import One Stop Shop (IOSS) regulation.

Advantages and disadvantages of dropshipping

Like any e-commerce model, dropshipping has its pros and cons. Below you can see them clearly listed:

When is dropshipping interesting?

• If you want to start without much risk
• If you want to quickly test different products
• If you want to sell internationally with minimal overhead

View the checklist of the government for more information.

Customs and dropshipping, what to watch out for?

With dropshipping, orders are often placed directly from a non-EU country, such as China, shipped to the customer. As a result, you soon have to deal with customs formalities.

What are you running into?

• Customs value is not correct → Consequence: delay or additional costs for your customer
• Product does not meet EU safety standards → Risk of seizure
• No correct HS code used → Wrong load or delay
• Package is incorrectly indicated as gift or sample → Chance of fine

Other risks to consider

With dropshipping, there are also risks you need to pay close attention to. You run the risk of unwittingly selling fake products, resulting in seizure or legal claims. Because you do not have the products in your hands, it is also more difficult to check the quality and safety. The logistics can also be disappointing: delivery times are often longer and delays at customs are common. On top of that, there is a lot of price pressure, because your supplier often serves other webshops that work with low margins. And don't forget customer service: if a package arrives late, gets damaged or is completely lost, the customer is not looking at the supplier, but at you as the seller.

ECC supports dropshippers at:

ECC (European Customs Clearance) helps dropshippers sell internationally without worries. With more than 25 years of experience and automated processes, we ensure fast and correct handling of all customs formalities. This way you avoid delays, fines and unexpected costs. What we take care of for you:

• Correct customs declarations for import, export and transit
• Classification with proper commodity codes (HS codes).
• VAT advice and guidance on OSS/IOSS in consultation with your tax specialist
• Risk management through control of product requirements and customs values
• E-commerce customs clearance With competitive rates per kilo and quick turnaround
• Consultancy & secondment: deployment of experienced declarants at peak demand

Learn more about our e-commerce solutions?