Have you ever thought about opening your own online store in Dubai? With more people shopping on the internet every year, ecommerce is growing very fast across the UAE.
But there are many costs to think about before you start selling products online. This article will explain the main expenses so you can make a smart budget.
Ecommerce Business License
The first thing you need is a license from the Department of Economic Development (DED) in Dubai. This allows you to legally run an ecommerce business.
- License fees start from around 15,000 AED for 1 year
- You may need to pay for business setup consultants
- It can take 1-2 months to get DED approval
So be prepared to spend at least 20,000 AED on licenses and permissions before you make any sales.
Building Your Ecommerce Website
Obviously you need a website for your online store. There are a few options to get one:
- Pay web developers to custom build it – this costs 15,000 AED or more
- Use cheaper DIY ecommerce platforms like Shopify
- Register a domain name and hosting – budget 500-1000 AED per year
For a small startup site, Shopify is the most affordable at under 3,000 AED yearly.
Payment Gateway and Bank Fees
To accept payments online, you need to connect payment gateways like PayPal or Stripe to your site. These charge per transaction fees:
- PayPal charges around 3.5% + 0.5 AED per transaction
- Banks also deduct fees for transfers and deposits
So remember to account for these ongoing costs of doing business.
Buying and Shipping Inventory
As an online seller, you have to buy or make products wholesale and ship items to customers.
- Find good suppliers and negotiate bulk deals
- Local couriers charge 10-30 AED per small parcel
- International shipping can cost 100-500 AED
- Rent storage space for extra stock
Manage inventory wisely to maximize profits.
Marketing and Advertising
You need to promote your online store for people to find and buy from it.
- Pay for Google and Facebook ads – budget 100-500 AED daily
- Offer discounts and deals to first-time buyers
- Active social media marketing takes time or paid staff
Factor in continuous advertising costs in your business plan.
Staff and Expert Services
At first it may be just you running the entire business. But over time, you may need to hire help:
- Website updates and tech support
- Social media and content managers
- Accountants help with finances and tax
- Legal help with contracts and paperwork
These experts and employees cost money, so allow for it.
Total Cost for Ecommerce Startup in Dubai
So in total, here are the main startup costs:
- DED license and setup = 20,000+ AED
- Ecommerce website = 3,000+ AED yearly
- Payment gateway fees = Ongoing percentage
- Inventory and shipping = Variable
- Marketing expenses = 100+ AED daily
- Staff and experts = Optional later
Be prepared to invest 50,000+ AED in your first year, not counting inventory. But many successful online stores start small in Dubai and grow.
Conclusion
Opening an online shop has expenses, but done right it can be very profitable in the UAE. Try starting small and reinvest earnings to expand over time.
Most importantly, offer an amazing buying experience and great customer service. That is the key to ecommerce success in a competitive market!
FAQ’S
Use an affordable ecommerce platform like Shopify instead of paying web developers to build a custom website. Start with a small inventory and low-cost shipping options.
In the beginning you can probably handle everything yourself. Hire staff incrementally as the business grows. Start with temporary freelancers.
Plan for continual expenses like yearly website hosting fees, payment gateway transaction fees, advertising costs for customer acquisition, shipping charges, and restocking your inventory.
