Dropshipping Finland: Is it worth shopping online without stock?

Dropshipping is a flexible business model with little risk and a lot of growth potential. No wonder, then, that its popularity has almost exploded into the hands of the world. But how exactly is dropshipping done, and can it be done profitably in Finland?

In the article we will open these issues and tell you about the opportunities that dropshipping in Finland and international markets currently offers. At the end you will also find a few on how to set up a profitable dropshipping business, that is, an online store without a warehouse.

What is dropshipping?

Dropshipping means running an online store without having your own warehouse or big initial investments. In the operation of the dropshipping model, the goods are purchased in the entrepreneur's online store, but they leave directly from the supplier/manufacturer's warehouse to the customer.

The dropshipping entrepreneur thus acts as a kind of intermediary between the manufacturer/supplier and the customer. And since sales are not limited to the company's own limited stock situation, dropshipping has a very high profit potential if done correctly.

Of course, as with any business, dropshipping also comes with risks.

The dropshipping entrepreneur bears the responsibility for possible tampering by the manufacturer/supplier, such as quality defects, long delivery times, lost products, etc. However, an entrepreneur can effectively minimize this risk, for example, by selecting reliable suppliers with proven quality products and marketing to the right target groups.

Dropshipping in Finland — is it worth it?

Just like in international markets, dropshipping in Finland can be a very profitable business if done right.

Dropshipping also has a number of advantages over the usual e-commerce business. In the dropshipping model, the entrepreneur does not invest in products, which usually turns out to be the biggest expense when setting up an online store. It is also often difficult for a smaller company to raise the large start-up capital required to acquire products and warehouse space.

Also, the dropshipping entrepreneur does not have to take care of the delivery of the goods themselves, but is handled by the manufacturer/supplier. It is also possible to automate the reporting of orders, in which case products are delivered from the supplier/manufacturer's warehouse directly to the customer without the intervention of the entrepreneur.

This leaves more time for the dropshipping entrepreneur to market and develop operations, as well as to scale up. Often, the entrepreneur also has the opportunity to start delivering products himself, leaving more margin. Dropshipping is also much faster and easier to respond to changing demand because there is no physical inventory.

Dropshipping offers flexibility that ordinary online stores and businesses do not have.

However, even a dropshipping online store can generate a really nice turnover for many years. We say this assuming that the entrepreneur has taken the time to understand the target market and the target audience, and adapts as necessary to the changes that occur in these.

Taxation of Dropshipping Income in Finland

In Finland, dropshipping is taxed in the same way as any other business, i.e. income after expenses is taxable income.

Ultimately, the taxation of dropshipping income is determined by the form of company. Setting up a dropshipping online store requires the existence of a company, and most often a limited company is chosen as a limited liability company because of tax and other benefits. Of course, it is also possible to do business profitably even through the name of the company.

If an entrepreneur is doing dropshipping on the Finnish market, this must take into account the limit of business activities subject to VAT, which is 15,000 e/year, and if necessary, apply to the VAT register. In the international market, the taxation of these countries remains to be considered, where an accounting firm can help.

Of course, current laws and regulations must be clear to the dropshipping entrepreneur regarding taxes and etc. data protection relating to. The Tax Administration has written about taxing dropshipping income here.

If the goods arrive in Finland from abroad, as they usually do, the entrepreneur must inform the customer of any additional costs in advance. These costs include taxes on parcels from outside the EU and customs duties.

Amazon dropshipping or dropshipping on the Shopify platform?

If an entrepreneur wants to start dropshipping in Finland or abroad, one of the most important things to decide is to use the sales channel.

However, Amazon, eBay and similar big marketplaces should immediately start dropping out of options because they simply have too much competition and too few ways to stand out from the competition. It is not possible to do any major branding and customization of the online store, making differentiation and marketing much more difficult.

On these big platforms, it's also tricky to build your own brand and maintain customer relationships.

For example, AliExpress offers a customizable dropshipping online store, but then the entrepreneur is tied to a single supplier and it may not be easy to change suppliers in case of problems or scaling hopes.

In addition, the online store costs even more per month than the self-managed Shopify.

That is, when comparing Amazon dropshipping and Shopify dropshipping, or dropshipping on another ecommerce platform like WordPress/WooCommerce, the latter provide the entrepreneur with a significantly better starting point to achieve a competitive advantage, a strong market position and thereby a sustainable and profitable business.

Of all the ecommerce platforms, however, Shopify is the best choice for a dropshipping entrepreneur.

Shopify.com The system is very easy to use and quick to learn, making it agile, for example, adding products, modifying the layout of the store, reviewing and exporting sales reports. However, what sets Shopify apart from other platforms is the critical features for a smooth dropshipping business, such as integrations between dropshipping vendors and platforms that allow an entrepreneur to automatically manage inventory and orders.

How to start dropshipping in Finland or internationally?

To start a dropshipping business, you first need an idea about the product or some kind of smell about the direction and demand for online shopping, and then let's start figuring out whether the idea is the basis for a profitable business. Only after the real potential of the idea and the competitive situation have been clarified, do we start setting up a dropshipping online store.

Here are our tips on how an entrepreneur can ensure a profitable dropshipping business from the start:

1. Examine needs and markets carefully

The first step to starting a profitable dropshipping business is market research.

The main task of an entrepreneur is to understand demand and to identify current, changing and future trends and thus to determine what kind of products could potentially be needed in the market.

Market research and trend analysis can be started easily Google Trends with the help of the tool. Google Keyword Planner and e.g. Ahrefs or Semrush work well in figuring out internet search volumes and potential demand in specific target markets and regions. An entrepreneur should also delve deeper into the research by looking at dropshipping statistics as well as browsing e.g. Amazon's best-selling products.

Using different tools, entrepreneurs can discover new ideas and get a feel for whether their own ideas and dropshipping activities could have the ingredients for success in the desired market.

The success of a dropshipping company, like any other business, is largely based on demand, so it is not worth neglecting to do market research by jumping directly into practical implementation.

However, the research process can be streamlined by knowing at the very beginning whether the entrepreneur intends to do dropshipping on the Finnish market, internationally or both.

2. Clarify the competitive situation and find a niche

The next step is to study the competitive situation of the target market (or markets, if you have several) in more detail and try to find a niche that suits your business.

You can do dropshipping by offering something completely new and unique that is in demand, or by choosing already popular products in your online store that you believe will be popular among your target audience. Ideally, these products do not have too many supply and providers in your target market.

The latter may be a more risk-free operating model because there is evidence of success from other markets. At this point, at the latest, you should take stock of the best-selling products of dropshipping platforms and big marketplaces, and find out which of them could have good potential and yet have no or little supply in the market you are aiming for.

However, keep in mind the differences between target groups. A product that makes millions in China may not be of interest to fewer Finnish consumers who are accustomed to quality.

3. Choose a niche for your business and narrow your product range

Once you've found a niche for your business where supply doesn't meet demand, you can define the niche of your dropshipping ecommerce, that is, the area where you limit your product collection.

The narrowing of the product range is worthwhile because it distinguishes the entrepreneur from the big and mainstream players, and effectively reaches a smaller group of customers with a targeted marketing message.

Of course, you need to figure out what this message is and who you want to reach with it (who is your target audience and ideal customer).

This will also make marketing easier and it will be possible for the dropshipping business to overtake large general merchandise stores in search engines faster and with less effort, build a recognizable brand among the target audience and achieve a stronger position in the target market.

That is, by choosing a niche, an entrepreneur can achieve a significant competitive advantage.

However, the niche of online shopping does not have to be too restrictive. It can be just as big, such as electronics, gifts or pets, or more precise, such as cell phone cases, fun t-shirts, camping accessories or zero waste decor.

4. Find and choose the right dropshipping partners

Choosing a dropshipping niche leads back to the next step, namely the search for reliable manufacturers and suppliers of goods and the selection of quality products.

Of course, you should choose only reliable suppliers and manufacturers with whom dropshipping in Finland is notoriously smooth. This means that the products are quality goods, the processing of orders is nimble, and the delivery process is seamless.

With an inferior dropshipping supplier, the risk is delivery of poor quality or broken goods to the customer, long delivery times and repeated customer returns, which of course eat into customer satisfaction, cash flow and reputation of your company.

Good suppliers can be found on a topical basis by googling and researching the experiences of dropshipping entrepreneurs e.g. In Shopify's own App Store on the editor's page.

Also in the following articles you will find the best international dropshipping suppliers of the moment as well as Top Suppliers in Europe.

5. Build an online store and brand that speaks to your target audience

Background work is important if you want to succeed in dropshipping in Finland or any country, but equally crucial is the implementation and branding of the dropshipping online store.

Specialization gives a significant advantage to the dropshipping business, but it does not negate the fact that there is and always will be competition, even if there is “something completely new” for sale.

Therefore, if the dropshipping entrepreneur wants to be as fast as possible and as profitable as possible, the sales package must be in first place from the very first day. By total we mean a fast, technically seamless online store, all its content and a brand that stands out from competitors and speaks to the right target audience.

By carefully planning and building an online store, a dropshipping entrepreneur ensures himself a smoother cash flow and faster growth for the company.

This is done by ensuring that the right, most potential customers are reached and sent just the right picture. Just reaching out to the right people is not enough, they should still be convinced to buy with a diamond ensemble and carefully honed details.

If the customer feels that something is poking in the online store, be it a technical or visual issue, a content problem or conflict, or a strange feeling or “vibe” that the online store accidentally conveys to the customer, the same or similar product will be purchased elsewhere.

The user experience of the online store is therefore key, because it guarantees that the customer who has made the purchase decision will take the matter to the end and the company's account will receive euros.

However, the brand and the online store are separate areas, and there is so much to each that you have to deal with them separately, unless you buy expert advice. A do-it-yourself man or -woman can benefit from our Set up a Shopify online store from the guide or here from an article on branding the dropshipping business.

Also remember to choose a relevant and clear domain for your online store, that is, a domain that will easily stay in the mind of the customer and will bring you SEO advantage by being closely related to the subject area.

Start a profitable dropshipping business faster with Growly

With these rules, the process of starting dropshipping and setting up an online store should be a little clearer. However, that's what it is — a process that will take time at the latest when effective online shopping starts to actually be implemented.

Setting up a dropshipping online store involves many other things, such as determining the product range, creating and updating high-quality product texts and images, etc., pricing, and selecting and defining the preferred payment methods for the customer.

After completion, the online store must of course also be optimized by search engines and an attempt to market in search engines and social media channels popular with the target audience.

Remember that it is not worth using shortcuts when doing online shopping, because good or bad execution in the end games determines how well or badly (or very well or very badly) sales will occur and how quickly and how big the business will grow.

In addition to careful background work, our most important tip for starting a dropshipping business is to invest in a quality online store.

Digital Agency Growly can help you get started not only in creating a seamlessly functioning online store, but also a beautiful, pre-branded whole, allowing you to get directly involved in sales and marketing. And if you need help with the latter, we will help you with that too, focusing on real, measurable results and sustainable growth of your dropshipping business.

Feel free to contact us via the form below and we will discuss in a casual meeting the implementation of your online store and how to start your company's growth journey.