Dropshipping from China to UK

There is no need to read countless guides on how to start dropshipping from China to the U.K. 

At Leeline Sourcing, we’ve been in the dropshipping industry for the past decade. And we’ll walk you through dropshipping from China. So you never have to worry about losing your money to UNRELIABLE suppliers. 

With this guide, you’ll be able to learn how to start and scale your business EASILY. 100% FREE.

Here’s what we’ll cover: 

• How to start dropshipping from China to the U.K.
• Pros & Cons of dropshipping to the U.K.
• Taxes to pay while dropshipping to the U.K.
• Key points to remember when dropshipping to the U.K.

Ready? Let’s dive in…

How do you start dropshipping from China to the UK? 

We’ll keep it 100% with you. 

Launching a PROFITABLE dropshipping business from China to the U.K. is not a child’s play. It’s A LOT OF HASSLE. For sure.

For instance, if you are a complete newbie, you might have to deal with:

• Low-quality products
• Loads of refunds
• Angry customers
• Long delivery times
• No tracking information

…and, of course, low-profit margins.

So instead of spending TONS of hours and relying on your gut feeling, here’s what to do:

#1-  Register your online business in the U.K.

You must register your e-commerce business in the U.K. to start selling goods. And to avoid any legal consequences that may arise in the future. 

You register your business as:

• Partnership
• Limited company
• Sole Trader

EXPERT ADVICE. Register as a Sole Trader to avoid hefty VATs. Plus, it’s a simple e-commerce business structure that’s SUPER EASY to operate.

To register…

Head to the H.M. Revenue & Customs website for self-assessment and tax returns. EASY PEASY!

#2- Find the RELIABLE suppliers

The dropshippers we know – we are talking $1M+ In revenue – prioritize their suppliers. If you want to get there, you need TRUSTWORTHY suppliers. Who deliver QUALITY products that satisfy customers’ desires. 

If you don’t want to light your money on fire, you find reliable suppliers on Ali Express. You must sign up, install their plugin, and add suppliers to your online store. Pretty cool, right? 

WAIT A MINUTE! That’s not all. Ensure you thoroughly check the suppliers’ credibility to avoid disappointments. 

Ensure they have a stellar seller rating and hundreds of positive reviews. Oh, and consistent sales.

#3- Order samples

This is yet another crucial step while starting your dropshipping business. 

Here’s where you separate the wheat from the chaff. And shortlist ONLY suppliers that are the best fit for your business.

Here’s our checklist of what you should consider:

• Payment terms
• Unit costs
• Delivery time & overall order fulfillment process
• Communication patterns

 Now it’s time to order samples. And thoroughly test them and ensure they are HIGH QUALITY. 

BONUS STEP. Start optimizing your product pages. Market yourself through ads and social media. And drive sales to your store. 

Pros and cons of dropshipping from China to UK

Phew!…that was a lot of information to take in. So let’s quickly dive into the pros and cons of dropshipping from the U.K. below:

Pros

Flexible Shipping Options

Unlike dropshipping from E.U. countries, China dropshipping offers TONS of shipping methods. All with UNIQUE offerings. 

You choose from the FASTEST to the CHEAPEST. And save hundreds of dollars on shipping which you can use to expand your store. 

Low Prices

Generally, product prices are lower in China compared to other E.U. countries. 

But why? 

China has hundreds of thousands of suppliers producing the same products. This creates price competition which lowers the overall selling prices of their goods.

Hence, you save more money while purchasing items from China than the U.S. Or other European countries.

Wide Product Variety

Did you Know?: China’s eCommerce market took up 64% of the global retail sales market in 2021 alone!

There are many suppliers in the Chinese market. From AliExpress suppliers to Alibaba suppliers. Each offers a wide range of products at AFFORDABLE prices.

If there is anything that China doesn’t produce, we’ve never heard about it!

Cons

Slow shipping times

Although there are EXCELLENT shipping companies, some are a total wack. 

Imagine a customer ordering a product only to receive it after three months. 

Three. Months. That’s a one-star review, for sure. 

The trend continues, and you will be out of business in 6 months.

That’s why you need to work with a RELIABLE supplier. With a proven track record of FAST delivery. To ensure customers keep coming back for more. 

Counterfeit products

Many suppliers are infiltrating the Chinese market with fake products. Hence, making it HARD to TOP NOTCH products. 

What taxes should you pay when dropshipping from China to UK?

Now to our million-dollar question! 

Should I really pay taxes? 

Yes, you should pay taxes! Don’t even waste time looking for ways to avoid them. It won’t end well…

Now that we are clear, here are the taxes you MUST pay:

Income Tax

This is the MOST common tax for any business or individual. And it’s typically imposed on your earnings.

It’s more like a share of your earnings you MUST pass to H.M. Revenue & Customs. 

The U.K. has a unique tax system where your seller’s income is divided into 4 bands. For example: 

Band	% tax for your income
Personal allowance	0% for income up to £12,500
Basic rate	20% for income £12,501 – £50,000
Higher rate	40% for income £50,001 – £150,000
Additional rate	45% for income above £150,000

In layman’s terms…

If you earn £70,000, you pay ABSOLUTELY zero for the first £12,500. 20% for the next £37,500. And 40% for the remaining £20,000. That means you pay a total of £21,500 for that tax year.

Customs/ import duty and VAT

Import tax is another tax you pay if you sell goods in the U.K. 

Initially, dropshipping businesses were exempted from VAT duties. Especially if their revenue was below £85,000. Now, you must get your VAT registration number regardless of your income.

So what are the VAT rates and Customs duty rates in the U.K.? 

U.K. is charging VAT at the rate of 20% for goods sold.

Also, the custom duty rates vary depending on your item’s value. E.g.,

• You are charged zero for items below £135 in value
• 2.5% deduction on goods that costs between £135-£630
• Custom rates vary for goods above £630. Please get in touch with the U.K. government helpline for more information. 

Suggested reading: Import Tax From China To US

What points to keep in mind when dropshipping to UK?

U.K. dropshipping has really revolutionized the game by giving you a ‘legit’ business model. That allows you to run an online store from the comfort of your home. And live your dream life. 

But before you get started, REMEMBER THIS:

Delivery Time

Time is HANDS DOWN, the most important factor for the success of your business.

Hence, you need a courier that ensures ALL products are delivered on time. No question asked!  

Well, it doesn’t always have to be this way… 

You can opt for FASTER shipping options, including DHL and UPS. Which ensures items delivered arrive in 4-5 working days.

That way, you increase customer satisfaction. Which in turn guarantees repeated and consistent profit margins. 

Untrustworthy drop shipping partners

Unreliable dropshipping associates can be a NIGHTMARE. And even ruin your reputation on dropshipping platforms or online marketplaces. 

Just imagine ten customers order 3-5 products from your store. You pay your dropshipping supplier. Then BAM- he vanishes with ALL the money. 

Now you have to deal with refunds and TONS of explanations why goods aren’t in transit. 

To avoid such worst-case scenarios: 

• Always check seller ratings before picking any supplier
• Check delivery times and fees
• Order samples to experience the quality of products, delivery processes, etc

Import Taxation

Get this– dropshipping items are subject to UK VAT. 

These import VAT make it HARD to succeed in dropshipping. Especially if you hadn’t prepared adequately. 

You have to pay additional customs duty for your customers to receive their delivery. Also, UK customers have to pay additional fees to delivery companies.

You can use our VAT checklist above to comply with ALL UK VAT rules. And avoid missteps that might hinder the success of your dropshipping business. 

FAQs about Dropshipping from China to UK

What’s Next

So, is U.K. drop shipping business really worth it? 

U.K. dropshipping is 100% worth it. Don’t listen to the naysayers or FAKE business gurus. With B.S money-making business ideas. 

You can become a millionaire dropshipping from China to the U.K. But it requires A LOT of dedication and hard work. Also, remember to pay vat and other import duties on time!

Are you looking forward to working with Chinese dropshipping suppliers? Or you want to find your next BEST SELLER? You are in luck! Hit us up at any of our service pages. And our team will be in touch SHORTLY.