KSA عربي
KSA عربي
Global عربي
The e-commerce market in Saudi Arabia is experiencing drastic growth. By 2025, the Saudi E-Commerce Council predicts that it will cross over $20 billion in sales and about 13% annual growth will be achieved.
More than 80% of the population makes online purchases, with one of the highest smartphone usage rates in the Middle East and the internet penetration of over 99%.
Along with the Kingdom’s strong logistics and its tech-hungry young population, the country is perfect ground for online ventures. For many investors and entrepreneurs, dropshipping, which involves selling goods without holding any inventory, has been an attractive way to venture into this market with little or no overhead and with high scalability.
However, opportunity comes with challenges. At first, when I completed my research, I found that dropshipping in Saudi Arabia could be as easy as opening a shop and getting suppliers.
The reality is that the licensing process was far lengthier and more complex, involving all the regulations, sourcing trustworthy suppliers. A single registration took me weeks and I soon realized that in this market, compliance is not simply a formality; it is the source of trust.
This guide will provide you with what I hoped to have in the beginning: a road map. You will find out about the various types of dropshipping, how to register step by step in Saudi Arabia, an approximate estimate of the cost and any seller should fulfill legal requirements.
Read more about: Best Investments For Expats in Saudi Arabia
Dropshipping is a unique business where you sell something online without any inventory. The flow is like this:
i) You list items in an online store.
ii) A consumer pays you after ordering it.
iii) You send your customer and order details to your supplier.
v) The vendor ships the item directly to your customer.
vi) The difference between what a customer will pay and the wholesale price paid by a supplier is your profit in the dropshipping business.
You will be solely involved in determining the prices, selling, receiving the payment along with the VAT, processing the returns, customer service, storefront and marketing online; the supplier maintains inventory and delivery.
This means you didn’t need a warehouse or stock and could launch anywhere. This model suits the KSA because of the high internet penetration and the increasing demand for e-commerce.
Roughly, there are different ways to operate a dropshipping business. They all vary in their operation depending on what you want to do with the products, suppliers, and orders:
You work with one vendor and market their products on your webstore. Once someone places the order, the vendor sends it directly to the consumer. This model is convenient to work with since you do not deal with many partners.
You collaborate with several suppliers simultaneously. That's a broader variety of products but it comes with inconsistent shipping, return policies and product inventory.
The products you sell, like T-shirts, mugs, or phone cases, are then printed on request by a customer and shipped by the supplier.
You use a product kit to make a product of your own by taking units of one or more suppliers and bundling them together.
This model targets importing high-quality products into the first world and selling them into countries like the KSA where consumers are demanding high-quality imports.
A branded niche offers specialized products, like fitness accessories, that are environmentally friendly to satisfy a specific category. Having a centered brand presence, marketing will be simple, and the customer will have trust.
Your whole store is constructed around one item. This is because most of the time, it is either a trending or standout item. It streamlines your catalogue and your marketing but it depends on the product remaining popular.
B2B dropshipping is the aspect of selling goods to other businesses without having to keep inventory. Once a business buys, you pass the order to a supplier or manufacturer and they ship it to them.
Here’s the version where physical stores, or local warehouses, serve to deliver goods ordered online through partner sites. The online seller will list the products and when an order is received, the store will ship directly from its inventory. It supports an established retailer to grow online without new logistics.
This model is based on collaboration with other brands, creators, or suppliers to co-manage the sales, stock management, or promotion.
There is no need to invest in a single-brand store because you can serve as a reseller or work in a shared platform with others. It has very little to do with brand-building as much as it does with cooperation and shared distribution or marketing channels.
Every model has pros and cons but it all depends on what you want to achieve, how much time you have and the type of customers you want to deal with.
To begin dropshipping in Saudi Arabia is not merely to open a shop. You need to build a business that is sustainable, legal, and trusted. Below, you can follow the steps to set up a dropshipping business in Saudi Arabia.
Before you start, choose a business legal structure. This could be a proprietorship, LLC, or a subsidiary of an overseas company. As a foreign investor, you will be required to acquire an investment license issued by the Ministry of Investment of Saudi Arabia (MISA), upon which you can register the business.
This license will prove that you are permitted to run your business operation in Saudi Arabia, and is a fundamental process for any non-resident investor.
Read more about: Saudi Arabia Residency Options in 2026
Then select a trade name in both Arabic and English. Be sure that it is under Saudi naming regulations and describes your business activities.
You will also need to select the relevant business activity code, which must include words such as e-commerce or online shopping. You can do this through the Ministry of Commerce (MoC) portal or the Saudi Business Center, both of which will reserve your name and operation.
With your application, ensure you have all the documents. This usually consists of your passport or national ID, Iqama as a resident, any national address registration, and any company formation documents, such as the Articles of Association for an LLC.
In case you are a foreign-based firm, your corporate documentation should be certified by the Saudi embassy in your own country.
Now that you have all your documentation at hand, you can submit your Commercial Registration (CR) application through the MoC e-services.
This encompasses completing company details, attaching documents, and paying the government fees via SADAD or bank card. After having the permit, your CR will be electronically issued.
It is your formal business license in Saudi Arabia, which is connected automatically to various government authorities.
List your store on the Maroof initiative of e-commerce, which will enable you to build customer trust. Not all businesses are required to register,
but it is strongly recommended because it provides your store with credibility in the eyes of customers,
indicating that you are running a business under the regulations of Saudi Arabia. Ensure that your CR contains the phrase of “e-commerce" and includes some of the activities before you register with Maroof.
You must register with VAT with the Zakat, Tax and Customs Authority (ZATCA) if your annual taxable turnover exceeds SAR 375,000.
If you want to make your business look more professional, even when your sales are lower, you can do voluntary registration. But the company should have a bank account in its name and proper financial records under the conditions mentioned in the VAT process.
Read more about: 2025 VAT Rate in Saudi Arabia
Companies in Saudi Arabia follow quite strict laws on e-invoices that operate under the FATOORAH system.
Based on the size and activity of your business, you will either be required to issue and store e-invoices in Phase 1 or integrate your system with ZATCA in Phase 2. Get your invoicing system before you make your first sale, to avoid any penalties.
As soon as your CR is issued, its information is shared with other government authorities such as the Ministry of Human Resources, ZATCA, GOSI, Saudi Post, and you’re local Chamber of Commerce. Although this will be automated, you need to make sure every registration is active and correct.
With your CR, you can open a corporate bank account in the Kingdom of Saudi Arabia. Most banks will need your CR, company documents, and in case of foreign investors, your MISA license.
Once your account is activated, generate payment gateways that accept Mada, SADAD, and international cards. This will be essential for smooth business operation in the KSA market.
Dropshipping is associated with the shipping of goods outside the Kingdom. Being a direct importer will mean that you must apply to Saudi Customs through the FASAH platform to obtain an importer number.
Some items will need special authority permits to sell, such as the Saudi Food and Drug Authority (SFDA), so check before you list any item for sale.
When going to recruit employees, you are obligated to register with the Ministry of Human Resources and the General Organization for Social Insurance (GOSI). Also, remember there is an SPD called Saudization, and it requires you to employ a certain percentage of your staff by Saudi nationals, depending on your industry.
Before you start selling, check whether your CR includes e-commerce in your activities, check that your VAT registration is up to date if required, and see if your invoicing system is compliant with FATOORAH standards.
Be certain that you list terms and conditions, a return policy, and Arabic contact information on your website. These details build trust and cover you legally.
Looked up the hottest-selling products in the Kingdom and found a category that can be sold legally and can be easily shipped.
The ones that require special licensing, like food, cosmetics, or pharmaceuticals, should be avoided at all, unless you want to deal with those laws. The Saudi e-commerce market is projected to hit more than $20 billion by 2025; hence, there is still space to expand, but it is not free of competition.
You should find suppliers capable of delivering on time, providing quality goods, and giving tracking information.
In case of a KSA-based company, you may seek local and regional suppliers on platforms like AliExpress, Spocket, or even local wholesale suppliers who usually can integrate with Shopify or WooCommerce.
You should also order some sample products and test your manufacturer before launching. This prevents possible late deliveries or low-quality products.
Even though your supplier will handle the shipment, you still have a responsibility to set expectations.
On the websites, clearly state when the goods will be shipped, by whom, and what the product's return policy is. It may be more sensible to use the local courier services like Aramex or Fetcher to deliver to the last mile in case of selling in the KSA.
For overseas shipment, just make sure your distributor has tracking and that their delivery dates are realistic. If you import stocks occasionally, you should also utilize a customs broker and forwarder to prevent detention of stocks at Customs.
Build your website or have your business in the marketplaces through Amazon or Noon. Now you’re ready to integrate your platform with your suppliers, configure the VAT-inclusive prices, and test orders.
When everything is working, find time to launch and start marketing your store with ads and social media.
When the CR is prepared, open your business bank account. Connect to both local payment rails, Mada and SADAD, as well as one international gateway for cards. Negotiate with your bank and payment provider on fees and settlement time.
When your store is ready, you will have to drive traffic to it. To reach the potential audience, you can use advertising via Google, Facebook, Instagram, SEO, and collaboration with influencers. The same can be done with content and e-mail marketing to produce lifetime customers.
Whatever gives better results, you will need to measure it and adjust the data that produces good results. In the KSA, social media plays a core role in a purchasing decision; make sure your brand is present.
Test your store before going live in terms of product listing, payment processing and shipping times. Since success in dropshipping in Saudi Arabia relies on fast delivery and customer trust, ensure that you establish good procedures right from the start.
Read more about: SME Tax Incentives and Regulatory Relief in Saudi Arabia
Disclamer:
This post is for educational purposes only, and does not constitute investment advice or a solicitation to take any financial action. It should not be relied upon when making investment or financing decisions.
