Dropshipping to the USA as a Non-US Citizen

Okay, let’s say you live in the UK and want to dropship using Chinese suppliers, but you want the suppliers to ship products to the US so you can sell them to American customers, plus you want to do it all from home in your PJ’s. No problem!

If you told this to someone 30 years ago before the internet, they would think you’re out of your mind! We live in an amazing time where it’s actually possible. If you’re here to get a straight answer as to whether dropshipping to the USA from outside of the US is feasible, I’ll simplify it for you:

You can dropship to the USA even if you’re living abroad and are a non-US citizen. The primary challenges you might face include currency conversion fees, navigating sales tax and duties, complying with US regulations, and managing returns and customer service. However, each of these challenges has feasible solutions.

Why Would You Want to Dropship to the USA?

So you live in the UK, Australia, Canada, New Zealand, India or Brazil, why would you want to dropship in the US when you can just dropship in your own country? It seems way simpler to focus on your own country as you already know the market, I’ll give you the one and only reason why you should……it’s very profitable! There are a number of reasons why;

• A population of over 330 million
• A large disposal income
• Big online shoppers
• Shipping from China is faster than in other countries
• Many suppliers have fulfillment centers located in the US
• Second biggest online spenders per capita in the world.

All the above reasons make it seem ideal, however, the fact it’s an ideal country to dropship to also means competition and advertising costs are higher compared to some countries. Take this into consideration before jumping in and assuming it will be easy money.

Currency Conversion Rates when Dropshipping as a Non-US Citizen

If you’re dropshipping to the US as a foreigner, you’ll still want to have your currency in USD for your store. If you’re selling to the US market but your products are being sold in GBP, good luck making any sales.

The problem with this is that your country’s bank account is connected to your payment gateway which is generally PayPal or Stripe, these companies will then charge you a fee to convert it back into your currency. Fees can be reasonably high and can significantly cut into your profits, especially if you’re scaling your business.

• PayPal currency conversion fee of 3 – 3.75%
• Stripe currency conversion fee 2%

These set fees are in addition to the standard processing fee.

Personally, I use Payoneer which I believe is a much better alternative to PayPal and Stripe. Payoneer charges a 0.5% currency conversion fee plus they are great to work with and have better support.

To avoid currency conversion fees altogether, your best option is to open a foreign currency account. This will allow you to collect, convert and transfer foreign currencies without the need to open a bank account in the respective country. You can connect this account to your PayPal or Stripe account, negating the need to pay currency conversion rates.

Do your due diligence when deciding on which foreign currency account would be best for your business. My recommendations would be World First or OFX.

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Can you Dropship to all other Countries?

You can dropship worldwide without being a citizen of the countries you’re selling to. However, you will need to consider several factors such as returns and customer service, shipping options, regulations regarding consumer protection and understanding the market demand.

Why would you want to dropship to other countries if the US is by far the most profitable country for dropshipping? Although I mentioned above all the advantages of dropshipping to the US market, there are advantages to targeting other countries. Apart from lower ad costs and less competition, another big advantage is, that you’re more likely to find gaps in the market.

I suggest reading my article on whether it’s worth dropshipping outside of the USA.

Most dropshippers will focus on the US market and other smaller countries are more of an afterthought. You can find just about anything for sale online in the US, but if you live in smaller countries like Australia or New Zealand, you just don’t have the same luxury. This provides opportunities for dropshippers to find niches that are relatively untapped.

But how do you find these gaps in the market? Well, whichever product or niche you’re looking at dropshipping, you can simply Google the product, followed by the country name and see which ads are running for that country and what the first few websites on Google are selling.

Another sneaky method is if there is an online store in the US that is showing success, you can see how profitable they are by using a Chrome extension called Similar Web. You can then see their monthly search results and how much traffic they are receiving by country. If most of their traffic is coming from the US only, it means they are only really targeting the US and there could be opportunities to replicate their business model in other countries.

Such methods are usually effective with relatively new or unique products as other countries may not be selling that specific type of product yet. It’s always worth checking Google Trends to discover if the product you’re searching for has demand in the country you want to target.

My other tip to always consider when dropshipping internationally is to make sure the products can be legally sold in that country. Just because specific items are legal in your country doesn’t mean the same product isn’t prohibited in other countries. UPS has a helpful tool to assist sellers with regulations in other countries and regions.

I have an article outlining multiple factors in various countries to determine which countries are the best and worst for dropshipping.

If you’re shipping to different countries, you’ll want to set multiple shipping zones to separate the countries or regions into groups that have the same shipping rates. To check how much it will cost to ship your products to specific countries, check out Shopify’s shipping calculator.

Which Country Do You Pay Taxes to if You’re Dropshipping Internationally?

This is one of the first questions beginners have when deciding on selling abroad. Many people assume you pay taxes to the country you’re selling to or even have to pay double the taxes to both countries.

You only pay tax on the income you have earned from your country of residence. You do not need to pay taxes to the countries you are dropshipping to.

This means you can actually have an advantage over online retailers who live in the country. Therefore, if you dropship to the US, you may have the same customer base as US citizens but you may live in a country with a lower income tax.

How to Dropship to the USA from Europe?

Dropshipping to the USA as a European citizen is a viable option. There are several things you must consider before pursuing it as a new business opportunity.

1. Choosing a US Supplier

If you’re planning to dropship to the USA from China, you will have no issues finding a supplier. However, many US-based suppliers will require you to sign a contract and may not approve you as a reseller of their goods without being a US citizen.

This will differ between suppliers and it may be worth inquiring about this beforehand. Although I am not a huge fan of suppliers such as Salehoo and Spocket, they will approve you to dropship their products to the USA as a European citizen.

2. Sales Tax and Duties

There are fees and taxes that US Customs and Border Protection (CBP) collects when shipping goods to the US. This will depend on the types of products being shipped and the state they are being shipped to.

There are several tools and platforms that can automatically track and calculate sales tax for you.

3. Regulations and Compliance

While you might not reside in the USA, you still need to comply with US regulations, especially around consumer protection. It’s worth researching regulations such as return policies, product compliance standards, and other relevant regulations to avoid any legal issues.

4. US Shipping

Learn all the expected shipping times from each supplier and clearly communicate with your customers. Provide tracking information to reduce the amount of inquiries you receive.

It’s worth learning which areas of the country may not be as accessible for shipping as others. These areas often cost more for shipping and you want to state this clearly on your shipping policy.

5. Marketing in the US

Be aware that paid advertising will often cost more in the US compared to most European countries. Facebook, TikTok and Google advertising works via an auction system and ads targeting the US will be pricier.

There are several free methods of driving traffic which I cover in this article Do you have to advertise for dropshipping?

6. Market Demand

Just because a product or niche is popular in your Country does not mean it will be popular in the USA. You have to do market research to test the demand for specific products.

There are several ways of doing this but one of the most effective is to use a keyword tool such as KeySerch. With this, you can find the search volume for keywords in specific locations to give you an accurate view of demand.

FAQ’s

Summary

If you have a successful dropshipping business and you’re considering expanding to the US market, I think you should go for it! If you’re a complete beginner and want to dropship to the US, I’d wait and gain some experience first. You can use your own country to test and validate your dropshipping business before expanding to the USA.

Dropshipping to the US as a foreigner isn’t a complicated process. As long as you can avoid the currency conversion fees, you’re no worse off dropshipping to the US as US citizens are.