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Is Dropshipping in Germany Profitable? a Helpful Guide!

Blog, eCommerce Insights | December 15, 2020

With the world opening up to us with more and more connectivity every day, you might have thought whether it might be profitable to get your eCommerce or dropshipping store online in Europe, and more specifically, Germany.

 

According to recent statistics, 88% of Germans, which is roughly a staggering  64,2 million, regularly use the internet. It could be that your dropshipping business could get a slice of the 165 minutes each German citizen spends every day on smartphones and other devices!

 

Before digging deaper, let’s first hit the brief for the definitive answer and find out whether dropshipping in Germany is profitable.

 

Is dropshipping in Germany profitable? Dropshipping in Germany is profitable if you follow a few steps. Make sure your store is in the German language, offer top quality goods, excellent customer service, and offer express shipping. Also, don’t forget to allow invoice payments by taking names and addresses at the point of sale. 

 

Ok so now we’ve seen the brief, let’s start yet looking at some of the best reasons you can create a great business dropshipping in Germany.

 

Why should I dropship in Germany?

With Germany polling in as a highly developed social market economy with one of the largest national economies in Europe, and also has the second-largest population after Russia, it’s a given that Germany should be on your top priority list for expanding your business.

 

Combine that with the fact that over 29 percent of Germans shopped online at least once a week in 2019, and Germany is the second largest eCommerce market in Europe, it is simply a positive option to include German dropshipping into your marketing plan.

 

Also, it’s worth noting that during the COVID 19 pandemic more and more people across the globe, including Germany are becoming increasingly familiar with the benefits of shopping online.

 

So it stands to reason that dropshipping in Germany could give your fledgling or existing dropshipping store a boost.

 

Germany’s infrastructure is well developed which includes an excellent logistics and shipping network. Its also has an extremely well-developed economy, which could be even more reason to expand your business to include German dropshipping.

 

over 29 percent of Germans shopped online at least once a week in 2019,”

 

 

What are German consumers like?

So what exactly does the profile of a German customer look like?

 

It goes without saying that quality is going to rank very highly with this European leader in the production of quality goods.

 

The types of stores they will buy from usually includes:

 

  • eBay
  • Amazon
  • Lidl

 

Although big-box superstores have arrived in Germany, many shoppers prefer a smaller Fachgeschäft, (specialty stores) where they can get good advice.

 

Whether it’s cameras, meat, or books, you may also enjoy being waited on by someone who lives and breathes their subject and is an expert in their field.

 

So if we take this into the online world, make sure you are offering your German customers more than a click and buy. Tell a story about your brand and give this discerning customer a great customer care plan.

 

“It goes without saying that quality is going to rank very highly

 with this European leader in the production of quality goods.”

 

Do German customers expect high standards of service?

As with any customer all across the globe, German customers are no different in so far as their high expectations of service.

German customers will expect express shipping

This will include such requirements as express shipping, so make sure you go with agents or others who can guarantee much shorter shipping times than the usual dropshipping suspects such as ePacket.

 

German customers expect a high standard of service. This will include:

 

  • Express shipping
  • 14-day refunds
  • Service in their own local language

 

So what other aspects will be important to get the right Marketing to your German customers?

 

  • Quality: It goes without saying that the discerning German customer will list quality as right at the top of their requirements, however, it’s also important to remember that although Germany has one of the highest English proficiency levels in the world, 50% of Germans won’t buy from a website that’s not in German.

 

  • Higher return rates: It’s worth noting that German customers’ high expectations may incur a higher than average return rate, so this is another reason to make sure you are offering the top quality goods and the fastest shipping available.

 

  • Offer payment by invoice: German customers prefer not to pay by credit or debit cards, but much prefer to pay by invoice. It’s a simple process, where your German dropshipping customer will just need to provide their name and address when placing the order. The merchant should send the product and issue an invoice.

 

Ok, so now we can see that it’s likely to be profitable welcoming European, especially German customers into your online store, let’s take a look at some winning niches that might prove popular with your German dropshipping customers.

 

Popular niches

  • Fashion
  • Electronics
  • Books

 

It’s been fairly well reported during the recent pandemic, that in terms of popular goods, there is a new wave of products showing a winning formula. This of course, holds true in all of Europe, including Germany.

More winning COVID 19 niches

  • Gardening
  • Home & kitchen
  • Auto parts
  • Personal health-related

 

Promotion strategies

So how do you make sure you’re promoting correctly to your new German clients?

 

  • Facebook advertising: Alongside any kind of drop shipping for eCommerce success story you will find store owners who will have taken full advantage of Facebook advertising.

 

Also finding German influencers who will be able to promote your unique and quality goods for you.

 

  • German influencers: From the likes of Leonie Hanne, who quit her corporate career to fulfill her dream of having her own fashion and lifestyle blog through to Sami Slimani, who is a leading male influencer in Germany and has a following worldwide for his YouTube channel filled with fun DIY videos, make the most of the up and coming influencers!

 

So now let’s get down to the detail and find out if there’s any business you will need to attend to when German dropshipping.

 

Register for a company

Registering as a German entity is a fairly simple process.

 

You can initially register German sole proprietorship or Einzelunternehmer, then as your business grows you can set up a Haftungsbeschränkt (UG) or GmbH, which can do so with as little as just 1€, but it’s recommended you to start at least with 1000€ to cover the legal costs.

 

There are also companies such as VERGO that allow residents of foreign countries to easily establish a remote Limited Liability Company in as little as 2-4 weeks after they’ve received all the documents.

 

“set up a Haftungsbeschränkt (UG) or GmbH, which can do so with as little as

just 1€, but it’s recommended you to start at least with 1000€ to cover the legal costs.”

 

Tips for profitable dropshipping in Germany

Now you’ve realized that dropshipping is German is certainly not dead and could be a very lucrative business addition for your ECommerce business.

Do let’s take a look below at some of our best tips for providing your German customers an outstanding experience.

 

  • Provide localized service: Make sure you are providing a service as localized as possible by making sure your storefront or website is in German

 

  • Provide fast delivery: although with the likes of Amazon setting the delivery bar so high, dropshipping delivery will certainly not compete, however, make sure you make it as speedy as possible by offering around 7 days as standard

 

  • High-quality products: Look for well-made and unique products

 

  • Flexible returns: Make sure you have a well-rounded flexible return and refund policy

 

  • Local payment method: As many Germans still prefer cash over plastic. However, for online shopping make sure you’re offering your European customers a choice of PayPal, electronic invoice, or credit card.

And finally…

So there it is! Everything you need to know about whether to extend your dropshipping business to one of the largest economies in Europe, Germany.

 

By making sure you understand your German drop shipping customers, you will be able to offer them unique products, a great backstory, outstanding customer service to make sure your German dropshipping store is profitable.