Do you want to start an eBay dropshipping Germany business?
Perhaps you want to target German buyers for your ecommerce and dropshipping business. You must follow the same steps as any other eBay dropshipping business in other marketplaces.
While it is a legal business model in Germany, there are unique challenges in this particular market you must consider to have a successful online store specializing in dropshipping. And this guide will show you precisely what you need to launch your business!
If you plan on dropshipping in Germany, it pays to understand the ecommerce market in Germany. That way, you can maximize the potential of this market and bring in steady profits to your dropshipping business.
Keep reading to learn what you must know to get started – and set your business off to the right track!
Article Overview:
Why eBay Dropshipping in Germany?
Is Dropshipping Legal in Germany?
Is Dropshipping Taxable in Germany?
Special Requirements When Selling to German Customers on eBay
Tips to Start Dropshipping in eBay Germany
Final Recommendations When You Start Dropshipping in Germany
Why eBay Dropshipping in Germany?
If this is the first time you have heard about the eBay dropshipping business model, we recommend you read this complete guide on how to start eBay dropshipping. If not, then you have an idea of how it works.
Like most business models, there are advantages and disadvantages to the dropshipping business model. However, due to the lower investment risk, many online store owners choose this model because it allows prospective sellers to start a business with little to no capital investment.
But why choose the German marketplace when eBay has many options worldwide? According to Statista, the ecommerce market in Germany is forecasted to grow 2.3 percent from 2023 to 2027.
This trend has continued for the ninth consecutive year, which means it could be up to 83% by 2027 – the highest in the country’s ecommerce history.
The eBay website is also among the top-visited online marketplaces in Germany, with a total active visit of 17 million per month. If these numbers are not enough to convince you to start dropshipping on eBay DE website, then nothing will.
But before you set up an eBay seller account on the German marketplace, you must know the requirements to succeed with eBay dropshipping.
These are additional benefits to consider when you want to start selling dropshipping products to Germany, or German buyers.
Huge E-Commerce Market
Not a lot of people know that Germans love to shop online. The massive consumer culture in Germany means that they are one of the biggest markets in Europe if you want to reach more potential buyers for your dropshipping store.
eBay Germany is one of the top-ranking online marketplaces in the country, which means Germans prefer eBay as their go-to online shopping destination. It would be best to take advantage of this demand when you dropship to eBay de Germany.
Penetrate the European Market
Once you get a foothold of the German market, you will use this learning experience to expand to more European markets. While each market is unique, selling and dropshipping to Germany will help you test the waters and assess how many customers you can attract to this market.
Therefore, it will also give you insights into the potential for dropshipping in Germany and other European marketplaces. Learning to tap into hidden markets could put you a step ahead of the competition and maximize the dropshipping demand before high competition.
Leverage the Dropshipping Business Model
Time and again, online entrepreneurs talk about the benefits of dropshipping, and one of those that stands out is the low-barrier entry. Starting a dropshipping business and store in Germany is a low risk investment.
Thus, it makes sense to leverage the low-risk design of the dropshipping business model to your advantage. It will help you reach millions of potential buyers and so many customers in Germany without spending lots of money on business capital investment.
Is Dropshipping Legal in Germany?
Yes. German law considers the dropshipping business model to be a legitimate and legal business model in the country.
However, all sellers must comply with the applicable laws when operating their online store. Even when you dropship products, your store is still subject to the same laws as any other online store that manages its inventory.
With that said, make sure you know what products are allowed for you to dropship in Germany. Not all products can be sold through your dropshipping store.
For example, Germany does not allow selling intellectually protected, hazardous, or any products with age restrictions. These are mostly similar to other online marketplaces, but ensure you double-check what is allowed (and what is not) in eBay Germany to avoid violation and possible account suspension.
Is Dropshipping Taxable in Germany?
Yes. All sellers in eBay Germany, including dropshippers, are subject to income tax.
However, taxation in the dropshipping business model is a bit more complicated because of the unique selling format. Therefore, knowing how the taxation process works before you embark on a dropshipping journey in Germany is crucial.
As always, please consult your accountant and lawyer to review your specific circumstances, as this guide is to be taken as an overall guide - and does not apply to your specific circumstances!
Dropshipping entails two separate transactions, which is not typical of a traditional selling process. First, the dropshipper must purchase the product from the wholesale supplier, and then sell the products to customers.
From the seller’s perspective, the purchase from the supplier is usually non-taxable. However, the second transaction involving the sales to your customers will be subject to tax, depending on the customer’s location.
Therefore, if you are selling to German customers, you must abide by German tax laws for the sales.
Since European and EU countries have different taxation laws, focusing on serving one market at a time is best. It will help avoid confusion and complications when handling taxes for your dropshipping business.
It will also prevent potential legal troubles for non-compliance to tax laws that apply to each country.
Now, if you want to focus on selling to the German market or the German eBay online marketplace, research and fully understand the German tax laws on the sales of products. It will ensure compliance and help serve customers in that region or country.
Special Requirements When Selling to German Customers on eBay
If you want to succeed with the dropshipping business in eBay Germany, you must comply with the selling requirements on the online marketplace. There are a few significant changes on the eBay Germany site that sellers on eBay, especially new sellers, must consider to succeed with your dropship store.
In June 2022, eBay published an update on selling to eBay Germany. These changes apply to sellers in eBay Germany as covered by the 2019 Packaging Act, which requires businesses to license their product packaging.
All eBay sellers and dropship sellers in Germany must also register with the LUCID database when selling to potential buyers in Germany.
The changes took effect last July 1, 2022, wherein eBay Germany announced it is legally obliged to implement these regulations across the eBay platform and its sellers. Therefore, eBay sellers in Germany must take the necessary steps to ensure compliance. Here is a step by step guide for you.
Step 1: Register with the LUCID Database.
You must register your business to the LUCID database. You can go to this link to do that, and a unique identification number will be assigned.
Upon registering to the LUCID database, you will be asked to provide essential information, such as the following:
- Business name
- Business address
- Business contact information
- Tax ID
- Declaration of licensing for your packaging system
After that, you will be provided with your unique LUCID number.
Step 2: Team up with a licensing partner.
You must find a company in Germany to handle the licensing of your product packaging and ensure compliance with the regulations.
Step 3: Indicate your LUCID number on the eBay Germany seller profile.
You must update your eBay seller account in Germany with your LUCID number. Go to My eBay to do this to continue selling on eBay’s platform.
Go to the Accounts tab to fill in your LUCID number. You will find it under the business address section.
Failure to perform the steps required for your eBay seller account could restrict your selling privileges on the eBay Germany site. Therefore, it is recommended that you fulfill the steps mentioned above if you want to keep selling on the eBay platform and sell to the German market.
Tips to Start Dropshipping in eBay Germany
The German market is fast-growing, and high competition will emerge soon, especially as more sellers realize the sales potential. Therefore, you must think a step ahead to ensure you can position your dropshipping business as one of the reliable options for German buyers, allowing you to get more sales over time.
These are the crucial steps you must master to become one of the top sellers in the German market for the eBay online marketplace.
Product Research
Product research is crucial when you dropship in Germany and get more customers to purchase from your store. When doing product research, you aim to find the top selling items that appeal to German customers.
But first, you must identify your niche and target customers. These critical factors will help you pick the winning products to dropship in Germany.
When searching for the best dropshipping products for your store, you may use a market and product research tool, such as ZIK Analytics. Make sure to specify eBay Germany and the eBay site to eBay.de when researching your product to get data from eBay Germany sellers.
It is crucial to ensure you get accurate information during your research.
These tools give you the advantage as they can save time finding the best products for your dropshipping business. You can choose from various dropshipping suppliers and maximize your store’s profitability by allowing access to detailed insights and sales data.
You can use the sales data, such as the sell-through rate, the sales earnings over the past 30-day period, and the successful listings rate, to determine a product’s viability for your dropshipping business.
Let’s use this Men’s Beanie Hat product as an example to analyze using ZIK Analytics as it is a top selling item on the platform.
We will use ZIK Analytics to validate the sales data for this and get ideas on other top selling products in this category (or to find a dropshipping supplier,if you decide to add this product to your store).
Using beanie hat as the keyword, we have determined that this product category has a sell through rate of 153% for 100 active listings on eBay. The average product price is € 10.59 and there are 153 sold items in the last 30 days, for a 30-day sales earnings of € 1,521.
As you continue scrolling, you’ll find other top selling items on eBay from other German and international sellers.
Now, let’s scan one of these products to analyze its sales performance further. This is the product’s eBay listing.
These are the sales data for this product on eBay for the last 30 days.
The sell through rate is 2500% and the successful listings rate is 100%. It has sold 25 times in the last 30 days, for an average product price of € 4.99.
There is no need to leave ZIK Analytics to research potential dropshipping suppliers because you can do that right within the tool. You have to click on the middle button to find potential dropshipping suppliers for a particular product you are researching.
You will find listings from dropshipping suppliers such as Aliexpress Germany when you click that button. For the product example above, you will find that there are Aliexpress German dropshipping suppliers that list this product for $0.60 to $0.99 each.
Thus, you have enough wiggle room for your own profit margins and keep your pricing competitive for the German market.
While dropshipping in Germany is low risk, you can attract many customers by investing in market and product research. You can even use it to build customer loyalty and ensure repeat buyers, especially if you can work with reliable dropshipping suppliers.
Choosing a Dropshipping Supplier
Finding the right dropshipping supplier could make or break your business. Therefore, I recommend that you spend as much time on this step as you need to ensure that you can get the best products and have a reliable partner for your business.
Think of your suppliers as your business partners. You must rely on their customer support acumen, quality control measures, and products to serve your customers.
Therefore, you must vet your dropshipping suppliers carefully to ensure you have the best partner for your business.
Always check the supplier’s business policies, such as payments, returns, shipping costs, and delivery times. Ideally, choosing a supplier with a local warehouse in Germany would be best.
It will help with faster delivery times, which is always a positive sign for customers.
Make sure you also examine the supplier’s product selection. The products must not only be affordable, but they should be high in quality, too.
You can assess this by looking at the customer reviews to determine what their existing and former clients have to say about their experience working with these suppliers.
Ultimately, it makes sense to work with multiple suppliers. It allows you to source products from different suppliers and keep your inventory flow going instead of relying on one source.
Setting Up Your eBay Store
First, you must create an eBay Germany account (if you haven’t already). You will use your eBay seller account in Germany to target the market and ensure that your products appear in search results among German users.
The eBay dropshipping store will serve as your primary selling channel for your products. You can use it as your main storefront if you don’t have your own e-commerce website.
However, the advantage of using the eBay online marketplace is leveraging its traffic and popularity to reach more potential customers. eBay is just one of many options available as an online platform for dropshipping stores in Germany, but it’s also the most popular, with more monthly visits and active buyers.
However, each store is different, and your goals could also differ. Ensure you weigh the pros and cons of each platform when setting up your store for dropshipping on eBay Germany.
Importing Items
Once you have identified the top selling items and the suppliers for your eBay store, the next step would be importing items. Depending on how many listings you want to create for your online business, you may need an automated tool for importing items.
You can also use a software tool to schedule imports and add variation listings to your products.
Automating adding and importing products can be helpful if you are dealing with multiple items or own several dropshipping stores. It can save you time and effort while maximizing how many customers you can reach at any given time.
On the other hand, manually importing the products from the supplier’s website to your store can be time-consuming. Depending on how many products you have when dropshipping on eBay, it could take several hours or days.
Automating the import process is more efficient, but make sure to optimize your eBay listings to rank higher in search results and have the potential to earn more sales.
When optimizing the listings on eBay, focus on keyword research. Integrate the targeted keywords into the listing title, the product description, and the images. It will improve your ranking and boost customer confidence in your credibility as a dropshipping business.
Inventory Management and Pricing
The e-commerce industry in Germany has a high level of competition, whether on eBay or another online marketplace. Therefore, you should always manage customer expectations to keep as many customers happy as possible.
The first secret to success with dropshipping in eBay Germany is price monitoring. In a highly competitive industry like eBay dropshipping, you should strive to outdo your competition with strategic pricing.
Therefore, it pays to have a product research tool that lets you get detailed insights on the pricing of the certain categories of products that other dropshippers within your niche are selling. It gives you an idea of your pricing strategy and how to stay competitive.
However, it would be best if you only used them as a guide in pricing your products. It is also essential to look at other sources when determining what price will bring you the most profits and attract more potential buyers.
Also, taking advantage of any tools at your disposal, such as the eBay profit calculator, would be best to help determine the best pricing strategy and ensure break-even optimization.
Inventory management is also crucial in a successful dropshipping business. In contrast, you won’t have to keep a stock of the products when eBay dropshipping; you must manage your inventory and stock levels properly to promote a positive customer experience in your store.
Make sure to keep your stock levels updated and transparent. It is a technique to manage customer expectations and avoid customer frustrations when they decide to purchase your products only to find out that you’ve run out of stocks.
Marketing Your Dropshipping on eBay Store in Germany
Marketing your business for dropshipping on eBay is critical to your success, especially in a marketplace with high competition, like Germany. Even after you start gaining more sales, you must keep up with the marketing efforts to ensure the success of your dropshipping venture.
eBay Germany equips sellers with all the tools they need to rank higher on search results and reach a wider audience base. For example, you can utilize promoted listings to help customers see your products.
Dropshipping sellers can also offer volume discounts and hold sales events to attract more customers to buy from your store. Seasonal promotions are a common advertising technique that you can use to drive more sales.
Whatever marketing techniques you use, be sure to monitor its progress and results to ensure you can determine what strategies to keep in the future as they increase sales.
Excellent Customer Service
Customer service is vital to your success in a competitive industry, such as eBay dropshipping. In Germany, the dropshipping market is not as saturated as in other marketplaces, such as the US.
However, you must maintain good standing with your German customers to keep getting business from them over other sellers.
So, how do you deliver excellent customer service?
There are a few ways to do so, such as ensuring fast and efficient response times on email or chat, providing live chat support, and faster delivery times. It is essential to provide as many communication channels to your customers as possible, making it easy for them to contact you if there are any questions or concerns about their orders.
You can employ a great customer service and management tool that can boost customer loyalty and improve the trustworthiness of your business. Happy and satisfied customers will surely return to your store for future purchases.
Final Recommendations When You Start Dropshipping in Germany
The eBay Germany marketplace is one of the biggest marketplaces in Europe. If you want to venture into selling to other markets to tap into areas with vast selling potential, you might want to start dropshipping in Germany.
Use the information here as a guide to help you get started in serving German customers. Starting now will put you one step ahead of the competition while it isn’t as highly saturated as eBay US yet.
Again, it is crucial to emphasize that there are unique requirements for selling in Germany, even for dropshippers. You must comply with the laws and regulations set by German law to ensure you can meet your tax obligations, operate your business legally, and generate a steady stream of income selling via dropshipping.
