7 Tips for Starting a Dropshipping Business on the East Coast  

Learn how to start a successful dropshipping business on the East Coast with these 7 essential tips. From choosing the right niche to understanding legal requirements and taxes, this guide will help you navigate the lucrative dropshipping landscape.

Entrepreneurs with a keen sense of organization equipped with marketing tools continue to take advantage of the online global marketplace through dropshipping. These largely internet-based retail operations sidestep many of the expenses that weigh startups down, such as storage space, storefronts, and staffing. Streamlined dropshipping companies field orders and relay the revenue to a fulfillment center or supplier, who completes the delivery. The dropshipping sector hovered at $128.6 billion in 2020. By 2026, the industry’s market share is expected to exceed $476 billion.

While starting a dropshipping business on the East Coast can prove to be a lucrative endeavor, business professionals need to have a viable plan. The U.S. Chamber of Commerce reports that 18 percent of new businesses falter in the first year, and roughly half close up shop within five years. The good news is that e-commerce entities such as dropshipping minimize the costs that typically burden a new venture. With minimal overhead, prospective business owners have an opportunity to effectively market a successful brand. If you are thinking about launching a dropshipping organization, these are 7 tips worth considering.

1. Choose the Right Niche

The importance of selecting the right niche cannot be underestimated. Amazon, for instance, started as an online bookseller that essentially followed the dropshipping model. It expanded to onboard wide-reaching products after it emerged as a reliable household name brand. These are questions to consider when choosing an East Coast dropshipping niche.

• Is the product line underserved or under marketed?
• What level of competition would your dropshipping business encounter?
• Are you knowledgeable about the product line?
• Does sufficient demand exist to make a dropshipping business worthwhile?

It’s also critical to select products that resonate with consumers along the Eastern Seaboard. These may involve popular or trendy items such as lighthouse memorabilia and pro sports fan accessories related to the Jacksonville Jaguars, New York Yankees, or New England Patriots, among others. On the other hand, you may decide to focus on products that are not found in East Coast retail outlets and fill a void.

2. Identify Reliable Suppliers

The pandemic serves as a teachable moment in terms of trustworthy supply chains. Companies that were able to move products and materials with the fewest hiccups won over new customers. Those that failed to maintain inventories or couldn’t fulfill orders lost ground.

A dropshipping operation relies on reliable suppliers to stock and deliver the products or materials. In many ways, your e-commerce retail business can only succeed if you partner with companies with the bandwidth to warehouse the inventory and move orders quickly. Consider vetting each potential supplier to determine whether the company has a proven order fulfillment track record. Establishing business relationships within each East Coast state may be in your best interest. This approach helps expedite shipments and gives you a backup if one supplier cannot get the job done.

3. Set Up Your Online Store

At this juncture, you’ve decided on the niche products or materials and have identified state or regional suppliers. The next step involves creating a user-friendly e-commerce store. You’ll also need to decide whether to work with an online giant or an upstart platform. These rank among the popular choices.

• Shopify
• WooCommerce
• BigCommerce
• Wix
• Squarespace
• Weebly

As you review these and other platforms, consider whether they provide a user-friendly experience and enjoy mobile optimization. These facets heavily influence your ability to roll out an effective marketing campaign.

4. Develop a Strong Marketing Strategy

A robust marketing strategy helps attract and retain customers. When deftly orchestrated, it generates word-of-mouth referrals and positive social media traction. Although your dropshipping operation may be entirely online, your marketing and branding efforts are not necessarily restricted.

You can add physical marketing assets such as a billboard along Interstate 95 or print advertisements in niche publications. That being said, the majority of your initial marketing efforts will likely be digitally-based. These are ways to drive traffic to your ecommerce store.

• SEO Marketing: Search Engine Optimization marketing involves crafting persuasive articles and blog posts that highlight products and materials. You can outsource SEO marketing efforts to freelance writers and post the narratives on social media platforms and consumer websites.
• Social Media Marketing: With the right toolkit and basic design skills, entrepreneurs can create enjoyable memes, short videos, and digital advertisements. Sharing these and other items on Facebook, Instagram, X, and other social media platforms puts your organization in the online public eye. Social media marketing ranks among the least expensive ways to get the word out.
• Email Marketing: Building an email list is a vital marketing asset that allows you to reach out to customers. Consider setting up a reasonable email schedule that promotes discounts, select items, and new products. One of the keys to email marketing success involves not oversaturating consumers with promotions.

Social media influencers have emerged as a way to reach hundreds of thousands, even millions, of niche product consumers. Keep in mind that influencers can become the face of your brand. That’s why it’s crucial to familiarize yourself with their online presence before committing to a business relationship.

5. Choose a Business Structure

While your business may be almost entirely virtual and, perhaps, mobile, startups generally need to select a business structure and file the appropriate documents with a given state. You will need to take a deep dive into the economic impact of positioning your operation in a state.

For the purposes of brainstorming through the business structure decision, consider filing for business in South Carolina. This state is a business hub that holds a big number of international corporations and big companies.  These are business entity options the Palmetto State accepts.

• Sole Proprietorship: Entrepreneurs typically select a sole proprietorship when they want official recognition of a small business, often a side hustle. These one-person entities provide individuals with a way to pass the revenue through to their personal income taxes. A sole proprietorship avoids corporate taxes but provides few safeguards. People who file a sole proprietorship are usually held accountable for business-related mishaps and company debts.
• Limited Liability Company (LLC): A South Carolina LLC can have more than one owner. Like the sole proprietorship, this business entity allows owners to flow business revenue to their personal IRS filings. Limited Liability Companies avoid corporate taxes and provide protection against business-related liability and debts. Those are among the many reasons a South Carolina LLC is a darling among dropshipping owners.
• Corporations: Startups select the corporation structure when they anticipate onboarding a number of shareholders. This type of legal entity provides significant debt and civil liability protections. The negatives include onerous document filings and the fact that the revenue does not flow through to personal IRS returns. Corporations pay what some refer to as a “double tax,” one on the company and another on the income owners and shareholders receive.

Forming a South Carolina LLC remains the more popular and well-used option. You will also need to know the legal requirements and taxes before deciding whether South Carolina or another East Coast state serves your interests. Another example of a great state to form your LLC in is Georgia, which is known for its pro-business ecosystem, offering various incentives for small businesses, a growing economy and a skilled workforce.

6. Understanding Legal Requirements and Taxes

South Carolina has a graduated personal income tax ranging between zero and 6.40 percent. The East Coast state also includes a 6 percent sales tax on transactions that may involve additional local sales taxes. Companies pay a flat tax of 5 percent, which is why dropshipping companies and others choose LLCs. In terms of legal requirements, these are items you’ll need to handle to launch.

• Employer Identification Number (EIN): You can apply for an EIN by visiting the federal IRS platform, determining eligibility, and following the steps.
• Incorporate in South Carolina: To register an LLC in South Carolina, you will need to file Articles of Organization using the §33-44-203 form. Corporations register by filing Articles of Incorporation using the§33-2-102 form. The state charges the same nominal fee to register either entity.

Each of South Carolina’s nine counties requires entities to secure a general business license. Because dropshipping involves retail transactions, you will likely need to obtain a sales and use tax license from the South Carolina Department of Revenue. If you decide to assemble a team, South Carolina requires employers to carry workers’ compensation insurance.

7. General Dropshipping Business Considerations

Newly-minted business owners would be well-served to acquire specific protections. If you plan to operate out of a brick-and-mortar facility, it may be prudent to purchase premises liability insurance.

Dropshipping operations rely almost exclusively on e-commerce. That means the company will have access to customer credit, debit, and checking account information. These and other confidential and sensitive pieces of information must be secured. Your dropshipping system will need enterprise-level cybersecurity defenses as well as cyber liability insurance.

Launch An East Coast Dropshipping Business

Dropshipping businesses generally keep 20 to 30 percent of each transaction. The average operation pulls down about $100,000 annually by marketing the company, processing orders, and maintaining logistical arrangements with fulfillment centers and suppliers. Proactive business professionals are not restricted to launching one online store or limiting their selections. Given the fact that dropshippers do not necessarily lift, store, or deliver the products and can expand their offerings, there is no limit to how much you can earn in the dropshipping sector.