No business concept encapsulates the modern era as well as dropshipping. The ability to sell products online while outsourcing the difficult fulfilment process makes it ideal for first-time entrepreneurs, or as a way of generating extra income. Yet this doesn’t mean that dropshipping is all plain sailing - and that it doesn’t demand the same focus and energy that every business needs to succeed.
As a leading European economy with superb transport links, France is a great place to start any business. Learning how to start a dropshipping business in France means learning not only the ins and outs of dropshipping, but also how to best adapt your business to the country - from establishing business relationships, to harnessing the benefits afforded by the country’s location, culture and infrastructure.
What is dropshipping?
Dropshipping is where a business sells goods online while outsourcing distribution to one or more third party suppliers. This means that the business is primarily focused on acquiring sales and managing their relationship with the suppliers, ensuring that they fulfil your orders in a timely and effective manner.
Related article: How to start a business in France in 8 Steps
The growth of ecommerce has combined with global factors to make distribution more difficult for many businesses, with more expensive warehouse space and more complex logistics. Dropshipping allows entrepreneurs to delegate these aspects of their business to other specialist companies, reducing the risks associated with ecommerce.
This helps new ecommerce businesses to avoid the traditional pitfalls of the industry, and to gain a competitive advantage. The ability of suppliers to operate at scale and adjust to the growth of your business means they can ship products quickly and cheaply, allowing you to compete with bigger and more established ecommerce firms.
The pros and cons of dropshipping
Dropshipping is perhaps the easiest way to get your foot in the door when it comes to ecommerce. Some suppliers have the ability not only to handle the distribution process, but even to source or manufacture the goods you are selling. A reliable supplier limits the number of B2B relationships you need to maintain, further simplifying the operation of your business.
As a dropshipping business, your primary objective is to achieve a high enough margin on the goods you are selling to justify the outsourcing of the distribution process. This means finding the best possible quality goods to sell at a price that ensures your business remains profitable. In short, you need the marketing and salesmanship skills to achieve a good margin on your products, and the business-head to find products that aren’t widely available elsewhere.
As a business concept with links to mass manufacturing, dropshipping has gained a mixed reputation. Some companies have used it as a means to set up storefronts selling cheaply manufactured goods for inflated prices, deceiving customers about their actual quality or providence. This is not a measure of the viability or trustworthiness of dropshipping, but is something to be mindful of when you consider starting a dropshipping business.
The reality of dropshipping is that it all relies on the quality of your relationship with your suppliers. The products need to be of a standard that you are happy selling, at a fair price, and stored and distributed in a manner that best serves your customers. You shouldn’t start a dropshipping business assuming that it will make money simply because the concept is popular, but because you have seen a gap in the market, and believe that the benefits of dropshipping will outweigh the costs in terms of control and finances.
Why start a dropshipping business in France?
France is a great destination for many businesses, and dropshipping is no exception. One advantage of being based in France is its central location in Europe, bordering two of the continent’s other largest markets in the UK and Germany. France’s excellent infrastructure includes the strong network infrastructure needed for a successful ecommerce business, and its business environment is highly supportive of startups, with startup hubs and advice services across the country.
Related article: How to buy or sell a business in France
While France is a mature ecommerce market, it also isn’t quite as saturated as countries such as the UK. This means there are still opportunities for new dropshipping businesses entering the market. If working with a local supplier, you also have the opportunity to take advantage of the prestige of French manufacturing and production, offering ‘Made in France’ goods with greater ease than if you were making or distributing them yourself.
France is also just a great place to live and work. The country is renowned for its high quality of life, including great food and drink, the beautiful scenery and sunshine of the south coast, and an array of charming and historic cities. It’s also a country that welcomes entrepreneurs and investors through generous visa schemes, and has consistently worked to help businesses under the latest government administration.
How to start a dropshipping business
While dropshipping is often considered an easy business to get into, starting a dropshipping business isn’t necessarily less complex than starting any other kind of business. Here’s everything you need to know to get started with your dropshipping business, and some of the particular details as they apply to starting a business in France.
1. Create your business plan
We always recommend starting out your business journey by creating a comprehensive business plan. By laying out your mission statement, ethos, short and long-term ambitions, and your financial projections, a business plan provides you with an outline of what you want your business to be, and how you aim to achieve it.
A business plan not only acts as a point of reference - something you can come back to for clarity when things get tough - but also an important part of the formation process. When starting a business in France, it’s something you’ll need to show your French business bank account manager (in French) to open a bank account, a crucial part of registering your new dropshipping business in the country.
Along with the details mentioned above, think about what company structure you will use, who your audience and customers will be, and how you intend to attract them. You should also lay out how much money you will be investing, and the experience you are bringing to the business. For a more complete overview, check out our article on how to write the best French business plan, written by Paris entrepreneur Dawn Bournand.
2. Choose a dropshipping business niche
While dropshipping might be considered a niche in itself, it’s really only a method of delivery. As a dropshipping business, you still need to decide exactly what you intend on selling, and how you intend to do it. There are a multitude of options for products that you can sell online, and for ecommerce storefronts and marketplaces to sell them on.
Many dropshipping businesses focus on small, cheaply manufactured items which are easy to buy in bulk and have relatively low overheads. However, this is an area in which ecommerce giants such as Temu and Shein are increasingly competitive, both pricing out dropshippers and attracting more attention. Instead, it’s better to look for a differential niche that supersedes the quality of products available through these services.
Related article: Where’s the best place to start your business in the South of France?
One idea might be to base your dropshipping business around a specific type of product, and specialise in offering as many iterations of it as possible, making yourself a one-stop-shop for anyone interested in it. Another might be to source more artisanal products from a range of small manufacturers. In this case, your focus would be on maintaining these numerous relationships, and giving them the best possible platform to sell on.
3. Find dropshipping suppliers
A dropshipping business is only as good as its suppliers. Some will manufacture your goods as well as shipping them, while others will source them from elsewhere. Some dropshipping businesses will also source the goods themselves, and have these sent to a distributor, who simply handles the shipping side of the process. Whichever approach you choose, you will need to find the right partners, and build an effective working relationship.
Depending on the products, this may be something you can locate in France. From food products to clothing to technology, France is home to a range of high-quality producers and manufacturers. French products and produce are often particularly desirable, and this may even be a point of difference for your business. A dropshipping business that links consumers to a range of French manufacturers and businesses could be onto a winner!
Dropshippers typically look to large scale manufacturers in countries such as China, sourcing products directly or indirectly through platforms like Alibaba and Aliexpress. Businesses in both France and China increasingly have some English language capabilities, but you may find smaller companies more difficult. A French-speaking business partner or representative may be helpful if you decide to go down this path, and find French partners to work with.
4. Create your online store
The next step is to consider how you intend to sell your products. With dropshipping, you need to consider not only what your website will look like and the storefront you will use, but also how orders will be forwarded to the suppliers you are working with. Some ecommerce platforms are specifically built for dropshipping, while others are built for general ecommerce, but can be opened up to suppliers to let them easily track and fulfil orders.
Platforms such as Sprocket and Wholesale2B either provide a shopfront or integrate with other ecommerce platforms. These options link you directly to a range of suppliers across different regions, with many either focusing on the UK and Europe, or on China. This combination of a specialist storefront and manufacturing makes starting a dropshipping business even easier, but does limit you to what’s available on these platforms.
Related article: Where’s the best place to start a business in the North of France?
Alternatively, you may choose to opt for a more traditional ecommerce platform such as Shopify, WooCommerce or Adobe Commerce. These platforms are flexible and functional, and will often provide more features than the dropshipping specific platforms, as well as being easier to find support for. They can also allow for more customisation of your website than the others, such as with WooCommerce, which is a plugin available for WordPress websites. However, establishing effective user and order management with your suppliers may require some time and specialist knowledge.
5. Formalise your finances
We’ve already mentioned setting up a bank account, which is a crucial step to starting any business in France. This will generally involve an in-person introduction with a bank manager, which is something we can facilitate. Here you’ll be expected to go through your business plan, and answer any questions they might have about your company.
The second stage is to deposit your share capital. For a EURL, SARL or SAS, the minimum share capital is only 1 euro. In reality however, most banks will require more than this to set up an account. The minimum amount most banks require to be deposited is around 4,000 euros, although this is "working capital", meaning it can be taken out of the account for use at any time after your Kbis (certificate of formation) is received by the banker. You’ll also want a French accountant to deal with the complexities of local tax laws.
6. Register your dropshipping business
The process of registering your business in France involves a few different steps. One is to announce the opening of your company in an approved newspaper, such as Le Parisien or Les Echos. Next, you’ll need to collate and submit various documents and evidence, including a completed application form, a certified copy of each director and shareholders passport, and two utility bills that are less than three months old as proof of address.
These will need to be sent to various government departments and agencies, which we’ve explored in more detail in our Start a Business in France in 8 Steps guide. Incorporation and VAT registration take around two weeks, after which point you should receive your ‘Extrait Kbis’ (certificate of incorporation), along with a unique 14-digit company ID number, which needs to be written on all of your official documents, invoices and websites.
This is the point at which your bank manager can activate your business bank account, and unblock your share capital. You’ll also get a welcome letter from the tax office with a VAT number and tax officer contact details. If you wish to import and export goods internationally, you’ll also need to apply for an EORI number with the French Customs Authorities, which we’ve explored in more detail here.
7. Market your dropshipping business
Once your business is incorporated, you need to set about making it a success! There are a variety of marketing strategies dropshipping businesses can use to drive traffic and sales. Pay-per-click (PPC) advertising through Google Ads and social media ads are powerful tools for reaching a wider audience quickly. Content marketing, including blogging and video tutorials related to the products, can also help to build credibility, establish the business as an authority in its niche, and attract organic traffic to the site.
Once you’ve attracted some attention, email marketing campaigns can help to nurture relationships with potential and existing customers by providing updates, promotions, and personalised offers. As one of the stumbling blocks for dropshipping businesses can be customer service - due to the difficulty of updating customers on shipping - offering exceptional customer service and soliciting customer reviews are key to enhancing your reputation, and encouraging repeat purchases. Using free tools such as Google Analytics will also help to highlight any snags in the customer journey, and better optimise your website.
Dropshipping is an approachable way to establish yourself as an entrepreneur, but this doesn’t mean it’s all smooth sailing! Done right, it can be an appealing way to start your own business, and an ideal way to start a business in France. To learn more about our company formation services in France, visit our French company formation page, or get in touch with us today.
