Are you thinking about starting a dropshipping on Shopify? And you are confused if you need an LLC? We have the detailed answers you need!
Shopify has gained popularity in recent times as a platform of e-commerce for selling products online due to its easy-to-enter-the-market strategy with a low initial investment. This convenient platform is quite user-oriented which is why it is suitable for starting a business, especially for beginners.
However, to run the business effectively as a starter, you need to know which business structure better suits you.
This blog post is related to a question that arises in the mind of a beginner before starting a business at Shopify, does a business need to be a Limited Liability Corporation (LLC) for this venture?
The answer to this is no as it is not obligatory to have an LLC before joining Shopify as a business owner. Limited Liability Corporation (LLC) is a business structure that separates owners’ personal wealth from the business liabilities but there are benefits of LLC structure:
◈ Businesses’ with LLCs possess a positive image of trust and credibility in the eyes of stakeholders.
◈ This business structure offers various tax options so that a business can choose the one that suits the most.
▶ Pro Tips for Beginners
➜ Market Analysis
Conducting thorough research to analyze the market situation is quite significant for acquiring knowledge about potential suppliers, target audiences, demanding niches, and market tendencies.
It is required to formulate a sound business plan by using marketing tactics to gain more chances of success as a beginner.
Moreover, product selection should be based on analyzing the list of demanding products in the market. Using appropriate keywords to make them appear on search results is also very necessary.
➜ Supplier
A trustworthy third party plays an important role in the success or failure of any e-commerce business. It is crucial to find a reliable supplier who can supply high-quality goods with timely deliveries.
➜ Legal Alignment
Although dropshipping is not linked to LLC structure, even then it is important to fulfill other legal formalities and ensure compliance with business rules.
Having discussions with legal consultants about taxes, registration and licensing is beneficial in this regard.
➜ Marketing Effort
Keeping in view the competition on e-commerce platforms, it is needed to create a strong brand image with excellent marketing and advertising strategies to attract customer’s attention.
Today, social media is a great source of promoting a brand hence it should be reasonably used to achieve these targets.
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➜ Customers’ Trust
Try to gain customers’ trust by valuing their feedback and suggestions and responding timely to their problems. Positive reviews from customers for any brand play an important role in achieving success.
➜ Post Evaluation
After following and practically working on all the previously mentioned tips, it is necessary to do periodic analysis of your dropshipping business activities. Regularly monitor the activities keeping in mind the growth of business and work on customer’s suggestions.
▶ Conclusion:
In conclusion, it is not required to fall under the Limited Liability Corporation category to start a dropshipping business on Shopify however there are many benefits linked to LLC.
Beginners are suggested to do market research about trending products, potential audiences, credible suppliers, and market trends before starting the business.
Furthermore, covering legal formalities, promoting business through marketing and advertising tactics, and attaining and retaining customers is also very crucial for the growth of the business in such a competitive environment. As a beginner, if these areas are covered well then the sky’s the limit.
▶ Frequently Asked Questions.
Does a dropshipping business on Shopify need heavy upfront costs?
No! There is no need for a heavy amount of initial investment to start this business. Cost is mostly needed to make a store on Shopify and the marketing practices.
What is another prominent benefit of this business?
There is no need to maintain a physical store to maintain inventory because are only purchased from third parties only when they are ordered by customers.
How reliable suppliers for Shopify can be found?
There are some apps, which can be used to connect with Shopify suppliers. This saves time and energy in searching for good suppliers.
Is it secure to start a business on Shopify without an LLC?
It is technically possible to initiate a business but the sellers’ personal assets are at risk with other legal complications.
