How to Start a Dropshipping Business in the Philippines in 2024

Gone are the days when starting a business meant scouting for locations to set up shop or for staff members to handle your store. In this digital age, you can start a business alone and from home. You just need a strong internet connection and a trusty supplier.

However, budding online businesspeople are often put off by product inventory. Ultimately, you still need to find ample space to store your supplies.

Fortunately, you can solve such inventory problems with dropshipping. Read on to learn how to start a dropshipping business in the Philippines, its pros and cons, and more.

What is a Dropshipping Business?

Online businesses usually have products on hand to sell. But that’s not the case with dropshipping. 

Dropshipping is an order fulfillment method, meaning you work as the intermediary between your customer and your supplier of products.

How Does a Dropshipping Business in the Philippines Work?

To start a dropshipping business, you must first set up your online shop and post your products there. Customers will then place their orders.

After you see your customers’ orders, relay them to your supplier. Your supplier then accepts the orders and delivers the products to your customers’ addresses.^[1]

The business model seems pretty straightforward, but don’t get too excited yet. Understand that this trade comes with pros and cons. Look into these to fine-tune your decisions and minimize certain risks.

Related:

• What Businesses are Pandemic-Proof in the Philippines?
• What is a Buy and Sell Business and How to Get Started?

Is Dropshipping Profitable in the Philippines?

There’s a lot of earning potential in this particular business model. Still, there are no guarantees on exactly how much you can make and how successful your dropshipping business will be. 

However, getting the right products for your e-commerce store, choosing a profitable niche, and employing the right marketing strategies can bring more customers to your website and boost your sales.  

In short, how much you can earn varies. It can range anywhere from a few thousand pesos to as much as US$100,000 in one year, according to Shopify.^[2] 

Advantages of Dropshipping

There are many significant benefits to running a dropshipping business in the Philippines, like the following: 

👍 Easy and Hassle-Free Logistics

The number one advantage of dropshipping is that it eliminates the need for a complicated logistical system. You don’t need to rent a warehouse since you won’t have to develop and produce the products.

Because your supplier will deliver the products to your customers, you don’t need to bother finding a shipping company.

👍 Lower Startup Costs and Risks

Since you don’t have to build a logistics infrastructure, you don’t need to shell out a great deal of money. Costs associated with inventory, staffing, warehousing, security, and shipping will not be a big concern.

Since all your products will come from your supplier, you don’t need a product development team, which typically requires a big budget.

👍 More Efficient Business Operations

Dropshipping streamlines cash flow and invoicing, which can help make your business operations efficient.^[3] You just need to think about the linear flow of your customers’ money toward the supplier. As soon as the customers pay you, you can pay the supplier and expedite the delivery.

👍 Scalable and Flexible Business 

Want to offer new products? You can do so without eating away at your budget. Just look for a new supplier that provides products your customers want or try a new product line from your existing supplier.

Disadvantages of Dropshipping

For every advantage of dropshipping, there’s also a disadvantage. In short, the flexibility and convenience, unfortunately, come with a few shortcomings. Here are some downsides you need to consider:

👎 Very Competitive Market 

Entering the dropshipping business is easy—so much so that even non-business owners can do it! However, it also means you face plenty of competition. 

When the market is saturated, finding customers can be a challenge. This is especially true when your competitors sell the same products sourced from the same supplier. To stand out, improve your marketing game or find a niche where competition is low.

👎 No Control Over Quality Issues

Because the products are shipped straight to the customer, you won’t be able to perform quality control procedures on your end. Without quality control, your customers run the risk of receiving faulty products.

You’ll also need to tackle errors in deliveries. Customers are very sensitive about this matter—if you don’t solve these issues or prepare countermeasures, your reputation will be damaged. Your sales leads might not even convert.^[4]

👎 Low Margins 

One of the most significant disadvantages of running a dropshipping business is the low margins. It’s quick and easy at a minimal cost―but because of the competition and low prices, your potential profit margins can also be relatively low and thin.  

👎 Limited Branding and Customization

Since you’re not selling products you made or manufactured yourself, you also don’t get a lot of control over them. Aside from logistics, the supplier takes charge of branding and customization. 

While some dropshipping suppliers can accommodate product customizations, you usually need to meet a minimum number of orders first to make it more affordable for the manufacturer. 

Read more: How to Deal with the Toughest Challenges Facing a Startup Business

How Much Do You Need to Start a Dropshipping Business?

There’s no exact figure for dropshipping startup costs because it will depend on a few things, such as the products you plan to sell and the costs to run your online store. 

Do you want to put more money into building your e-commerce website and offering more helpful online features? Or do you want to use it to pay for membership or subscription fees to dropshipping supplier directories and platforms? 

In general, you’ll need to prepare for these estimated startup costs: 

• E-commerce website (subscription plans ranging from US$26 to US$29 per month)
• Supplier directory or platform (either a one-time annual fee or monthly subscription fees)
• Business permits, registration fees, and other fees 

Want to know how to start dropshipping for free in the Philippines? It’s possible to start a dropshipping business for free if you can build a professional and fully functional e-commerce website or get reliable dropshipping suppliers for free.  

But if you’re serious about earning from your business, invest in your startup costs. The more you put into your business, the more customers you’ll attract and the more products you can sell online. 

Remember that in business, you usually have to spend money to make money. Compared to the startup costs of other types of businesses, dropshipping has lower or more affordable upfront costs. 

Related article: Financing a Business: 8 Funding Options to Look Into

How to Start a Dropshipping Business in the Philippines

Let’s say you already know the conditions and consequences of dropshipping, and you want to get into it. So how to do dropshipping in the Philippines?

The next step is to come up with a plan, which can be pretty straightforward:

Step 1: Decide Which Products You Want to Sell

With dropshipping, you can sell a wide range of goods, from Bluetooth speakers to organic feeds and security cameras. If you have a specific interest or passion, such as collectible toys and action figures, you can also integrate it into your dropshipping business.

👉 Most Profitable Dropshipping Niches

To increase your chances of success in your dropshipping business, choose niche products that are proven popular and profitable with the mass market. 

According to Shopify, here are some of the most profitable dropshipping niches for 2024.^[5] If you’re looking for dropshipping business ideas in the Philippines, consider the following: 

• Apparel and footwear
• Beauty and personal care
• Kitchen and dining supplies
• Baby supplies
• Pet supplies
• Home interiors
• Office products
• Tools and home improvement
• Phone accessories
• Car accessories

Step 2: Choose a Dropshipping Platform

Once you decide what to sell, pick a supplier for your dropshipping business. There are plenty to choose from, but you need to select one that suits your business size, budget, and product type.

👉 Dropshipping Platforms in the Philippines

Picking the right dropshipping supplier is crucial because what you sell will depend on their product listing. You can find your supplier on popular platforms for dropshipping in the Philippines:

• Alibaba
• Aliexpress
• Dropify
• Lazada
• Oberlo
• Shopee
• Shopify
• WooCommerce

Related: 

• Get Started as a Lazada or Shopee Seller: Which is the Better Platform?
• How to Make a Business Plan Like a Pro: Step-by-Step Guide and Samples

💳 Use a Credit Card to Buy Your Supplies

Ready to launch your dropshipping business? Buy your supplies with a credit card to earn points, get rebates, and more. Compare the best credit cards for business owners and apply via Moneymax: 

Credit Card	Perks for Business Owners
UnionBank Rewards Credit Card	1 point per ₱30 spend 3x points for shopping locally and abroad
UnionBank Lazada Credit Card	₱6 Lazada Wallet Credits per ₱200 spend at Lazada ₱1 Lazada Credit per ₱200 spend at other merchants ₱50 monthly shipping vouchers at Lazada ₱500 discount vouchers for 5 Lazada Sales all year round Priority access to Lazada Sales Discounts from selected Lazada merchants
Metrobank Platinum Mastercard®	1 rewards point for every ₱20 spend eCommerce purchase protection of up to US$200 0% installment at partner merchants
HSBC Red Mastercard	1 point for every ₱20 spend 4x points on shopping, online, and overseas transactions

Where Can I Get My Products?

Overwhelmed by the choices of dropshipping suppliers in the Philippines? Since you’re just starting, go for tried-and-tested ones. Note that many dropshipping platforms also double as product suppliers.

Check out this list of dropshipping suppliers in the Philippines:

📦 Alibaba

Alibaba is usually at the top of the list of every dropshipper in the Philippines. This is because it has almost everything―from smartphone cases to food and beverage machinery.

📦 AliExpress

AliExpress, a company owned by Alibaba, also has a wide range of affordable products. It also provides free shipping services worldwide. It even has warehouses in the Philippines for faster deliveries and higher customer satisfaction rates. This makes it one of the top suppliers for dropshipping in the Philippines.

📦 Lazada

If you want to target the local market, look no further. Lazada, another Alibaba-owned company, is very well-known and widely used by dropshippers and end customers alike. It’s a great choice, especially if you want to focus on selling in the Philippines, Singapore, Indonesia, Malaysia, Thailand, and Vietnam.  

📦 Oberlo

If you’re using Shopify as an e-commerce platform, you can integrate Oberlo, which has a comprehensive directory of products that you can easily import for dropshipping in the Philippines.

📦 Dropship

Dropship is the first COD dropshipping company in the Philippines via Lazada, Shopee, and TikTok. You can register, choose a catalog (which offers premium sneakers, clothing, baby items, and lifestyle products), and start selling.  

📦 Banggood 

With this dropshipping supplier with no upfront costs, you don’t need to pay any membership fee. Moreover, Banggood offers powerful dropship tools to help you attract more customers and sell more products.  

Regardless of your supplier choice, do your due diligence. Check if signing up with these suppliers comes with a fee. For instance, a pro plan with Oberlo may cost US$80 per month.

Don’t forget the cut the dropshipping company in the Philippines will get from your profits. If you’re dropshipping with Lazada Philippines, you may have to pay the online platform a commission from your sales.

Dropshipping Philippines Tutorial

Here's a simple guide about dropshipping in the Philippines through Shopify and AliExpress:

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Final Thoughts

Starting a business can be nerve-racking, mainly because it requires you to invest heavily in the setup and operations. If you want to try your hand at it without spending a lot of money, you can start with a dropshipping business in the Philippines. 

But before you do anything, always start your business plan with clear and specific goals. Make it a habit to list down your priorities.

If you don’t have enough savings to start a dropshipping business, you can get a personal loan for more funds. Compare and apply for personal loans easily through Moneymax.

Sources:

• ^[1] Dropshipping Definition (Entrepreneur)
• ^[2] How To Start Dropshipping: A 9 Step Guide (2024) (Shopify, 2024)
• ^[3] Make or Break: Seven Ways to Improve your Business Cash Flow (BBC)
• ^[4] Calculating The Cost Of Negative Reviews On Business Revenue (Forbes, 2023)
• ^[5] 150+ Dropshipping Products To Sell for Profit (2024) (Shopify, 2024)