Start a Dropshipping Business in the US: Step by Step

Starting a dropshipping business in the US is one of the easiest ways for small business owners to enter e-commerce without buying inventory upfront. Instead of stocking products, your supplier ships orders directly to your customers. This guide explains what dropshipping is and walks you through every step to launch a fully compliant and profitable US dropshipping business.

What Is Dropshipping?

Dropshipping is a retail business model where you sell products through your online store, but you don’t keep physical inventory. Instead, when a customer places an order, you forward it to your supplier. The supplier then ships the product directly to the customer.

Key characteristics of dropshipping:

• You don’t purchase inventory in bulk

• You only pay for products after a customer orders

• Suppliers handle warehousing, packing, and shipping

• Your primary responsibilities are marketing, customer service, and managing your online store

Why many US small businesses choose dropshipping:

• Low startup costs

• No warehouse or inventory management

• Quick and easy to launch

• Flexible and scalable business model

Dropshipping is legal in the US and widely used, but you must follow business registration, tax, and consumer protection requirements.

1. Choose Your Niche and Products

A strong niche separates your store from competitors and makes marketing more effective.

How to choose:

• Research trending, in-demand products

• Look for stable long-term demand, not just fads

• Choose products with reliable shipping times

• Understand your potential customer’s budget and needs

Avoid products that have high return rates or strict safety regulations.

2. Create a Business Plan

Your plan should outline:

• Your business model and target demographic

• Product categories and pricing strategy

• Competitor research

• Marketing approach (SEO, ads, influencers, content)

• How you’ll handle customer support, returns, and refunds

A business plan keeps your operations organized and helps you avoid unnecessary costs.

3. Register Your Business

Choose your structure:

• Sole proprietorship: Simplest, but no liability protection

• LLC: Provides legal separation between you and your business

• Corporation: Suitable for larger or investment-backed operations

You may also need a DBA if you want to use a brand name.
Registration fees typically range from $50 to $500, depending on your state.

4. Apply for an EIN

An Employer Identification Number (EIN) is used for tax purposes.

Why it helps:

• Required for LLCs and corporations

• Makes opening a business bank account easier

• Keeps business and personal finances separate

• Free to apply on the IRS website

Even sole proprietors benefit from having one.

 Don’t risk costly payroll penalties. Let our experts manage your payroll compliance end-to-end. Learn about our service here.

5. Get Business Licenses and Sales Tax Permits

To operate legally in the US, you may need:

• A general business license from your city or county

• A state sales tax permit for collecting and remitting sales tax

Sales tax compliance is essential because dropshipping stores can reach customers nationwide, and states have different rules for economic nexus.

Always check your state’s specific requirements.

6. Choose an E-Commerce Platform

Your website is the core of your dropshipping business.
Common platforms:

Choose a platform that integrates with dropshipping apps to automate product imports, inventory tracking, and order forwarding.

7. Find Reliable Dropshipping Suppliers

Your business depends heavily on your suppliers.

What to evaluate:

• Product quality and consistency

• Shipping speeds to US-based customers

• Return policy

• Communication reliability

• Track record and reviews

Avoid suppliers whose shipping times or quality are inconsistent.

8. Set Up Payments and Shipping Policies

Set up the essentials before launching:

• Payment gateways (PayPal, Stripe, Apple Pay, etc.)

• Shipping policy

• Estimated delivery times

• Return and refund policies

• Customer service response standards

Clear communication builds trust and reduces disputes.

9. Launch Marketing Campaigns

Drive traffic through:

• SEO-focused product pages

• Social media ads

• Influencer collaborations

• Content marketing

• Email marketing

Consistency and brand trust matter more than aggressive selling.

10. Comply with Legal and Ethical Practices

Important guidelines for US dropshipping businesses:

• Use your own branding on invoices, communications, and packaging

• Avoid reselling products from retailers (violates many marketplace rules)

• Follow consumer protection and data privacy laws

• Avoid restricted or banned products

• Ensure product descriptions and images are accurate

Ethical compliance protects your business long-term.

Official Requirements to Remember

• Business registration fees vary by state ($50–$500)

• EIN is free via the IRS

• Sales tax permits must be obtained through your state’s tax department

• Follow copyright and advertising laws

• Maintain clear and fair customer policies

How Counto Helps Dropshipping Business Owners

Dropshipping involves managing suppliers, orders, payments, and tax compliance—all while running marketing and customer service. Counto supports US dropshippers with:

• Automated bookkeeping

• Sales tax tracking and compliance

• Supplier payment management

• Clean financial reports that show profit margins

• Year-end tax filing

• Payroll services if you scale your team

Counto blends smart automation with expert accountants, helping small businesses stay compliant and profitable.

Summary

Dropshipping offers a low-cost, low-risk path to starting an online business in the US. With the right niche, proper registration, reliable suppliers, and strong marketing, you can build a profitable store. Following the steps above—and partnering with professional accounting support like Counto—helps ensure your business grows sustainably and stays compliant.

Expert Payroll Services, Zero Hassle

Running payroll shouldn’t keep you up at night. Our in-house payroll team handles all the complexities—from withholding calculations to tax deposits. We ensure compliance, manage deadlines, and keep your books updated automatically.

Get comprehensive payroll support without the need for multiple providers. Your dedicated Customer Success Manager is just a message away for any questions.

Ready to get started? Chat with us now, email [email protected], or use our contact form.

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