Can You Start Dropshipping at 14, 15, 16 or 17?

Can You Dropship If You Are Under 18? The Complete Guide to Starting a Dropshipping Business as a Teenager.

Hey there. Have you ever thought of starting your own online business and being your own boss? If so, you’re not alone – tons of teenagers these days are looking for ways to make money outside of traditional part-time jobs.

One increasingly popular business model for aspiring teen entrepreneurs is dropshipping. Dropshipping allows you to sell products online without actually stocking any inventory.

When a customer places an order, you forward their order info to your supplier, who then ships the product directly to the customer. Cool right?

In this comprehensive guide, we’ll walk through everything you need to know about starting a dropshipping business as a teenager. The guide will include the following:

  • Is it even legal for teens to start this type of business?
  • How to set up the proper business structure and get your parents on board?
  • Building your slick online dropshipping store.
  • Finding reliable suppliers and sourcing great products.
  • Marketing your business on social media.
  • Managing your new business operations.

So if you’re a teen looking to start an online dropshipping business, you’re in the right place.

Let’s get started.

Can You Start Dropshipping at 14, 15, 16 or 17? | Can You Dropship If You Are Under 18? – The Quick Answer

Alright, let’s kick things off by answering the biggest question on every teenager’s mind – is it even legal for me to start a dropshipping business?

The quick answer is YES – with some conditions, or limitations.

While there are no laws that outright ban teenagers from starting their own businesses, there are some legal age requirements you need to be aware of.

Can You Start Dropshipping at 14, 15, 16 or 17?

Conditions, or Limitations for Starting a Dropshipping Business as a Teenager

Contract Law Basics

In most countries, the legal age of majority – the age at which you can enter into legal contracts – is 18. Some actions taken by minors (anyone under 18) can be voided.

This means if you want to register a business, open a business bank account, or sign contracts with suppliers as a teenager, you may not be able to do so directly yourself.

Getting an Adult to Co-Sign

The good news is, that you can get around these restrictions by partnering with a trusted adult like a parent, guardian, or mentor to co-sign documents and agreements for you.

For example, your parents can:

  • Register your business entity for you.
  • Open a business bank account in their name that you can use.
  • Sign contracts with suppliers on your behalf.

Having an adult cosignatory adds a layer of legal legitimacy to your business.

Forming an LLC

Another option is forming an LLC (Limited Liability Company) with your parents as the officers. An LLC protects your personal assets if your business runs into legal or financial issues.

To form an LLC, you’ll need:

  • A designated registered agent.
  • To file articles of organization.
  • An operating agreement.

There are some costs involved in forming an LLC, like state filing fees. But it’s a safer and more flexible structure for a teen dropshipping business.

Paying Taxes

One unavoidable part of running a business is paying taxes on your income, no matter your age. You’ll need to report earnings from your dropshipping business on tax returns.

Some key points:

  • You must pay income tax if you earn over $400 (approx).
  • Your parents may be able to claim you as a dependent still.
  • Keep detailed records of income and expenses.

We’ll cover more tax tips later in this guide.

Setting Up the Business Structure

Alright, we’ve covered the legalities. Now it’s time to actually set up your teen dropshipping business structure.

Properly establishing your business will make you look more legitimate to suppliers, payment processors, and even customers. It also ensures you comply with important state and federal regulations.

While it may sound difficult, having your parents assist you with the business formation process makes things much more straightforward.

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Let’s break it down step-by-step.

Registering Your Business Entity

The first step is choosing a business entity type and registering it with your state.

Some common options include:

  • Sole proprietorship – Simplest option. No separate business entity was created. The business owner (your parents in this case) and the business are legally the same.
  • Partnership – Two or more people (like you and a parent) share ownership. Partners file taxes separately and share profits.
  • LLC (Limited Liability Company) – More complex but provides liability protection. Would be formed in a parent’s name with you as a member.
  • Corporation – Separate legal entity owned by shareholders. More complex and expensive to set up.

For most teen dropshipping businesses, a sole proprietorship or LLC formed by a parent provides the best balance of simplicity and protection. LLCs do come with state filing fees.

Whichever entity you choose, you’ll need to register it with your state by filing the appropriate documents. Most states allow you to complete registration online in under an hour.

Opening a Business Bank Account

Next, you’ll need a separate business bank account in your parents’ name that you can use for dropshipping. This keeps your business finances organized.

A business bank account allows you to:

  • Accept payments from customers.
  • Pay suppliers and other vendors.
  • Keep track of transactions.
  • Build business credit.

Be sure to open an account at a bank your parents already use. This makes linking accounts and transferring funds easier. Many banks have special options for teen business banking too.

Obtaining Licenses and Permits

Depending on your state, you may need to obtain certain licenses and permits, such as:

  • Reseller’s Permit – Required in some states to purchase wholesale goods tax-free.
  • Sales Tax Permit – Needed if you collect sales tax from customers.
  • Food Handlers Permit – For selling edible products.

This can be a bit confusing, so don’t hesitate to ask your state’s business services office for help. They can tell you exactly which licenses or permits your dropshipping business needs.

Finalizing Your Legal Paperwork

Here are a few other legal loose ends to tie up:

  • EIN: Obtain an Employer Identification Number from the IRS for tax purposes.
  • Business Address: Set up a registered agent service for receiving important documents.
  • Contracts: Review contracts carefully and have your parents sign. Don’t forget supplier and payment processor agreements.

Gosh, that covers a lot of ground when it comes to structuring your business properly. It may seem like a lot of steps, but following them helps ensure your exciting new teen dropshipping venture is built on a stable legal foundation.

Building an Online Store

Now for the really fun part – building your slick new online dropshipping store.

Your dropshipping store will be the virtual hub where customers can browse and purchase your products. This is what will make you money, so setting it up right is critical.

You’ve got two options when it comes to building your store.

Option 1: Creating Your Own Website

Building your own custom website from scratch offers maximum control and customization. However, it also requires more technical skill.

Here’s what’s involved in making your own dropshipping site:

  • Register a domain name – Choose a catchy, brandable domain name not already taken. Good domain registrars include GoDaddy, Bluehost, and Namecheap.
  • Get web hosting – Web hosting provides the server space to store your site files. Popular affordable hosts are HostGator, SiteGround, and A2 Hosting.
  • Install e-commerce software – Self-hosted e-commerce platforms like WooCommerce or Magento let you build online stores. You’ll need to integrate payment gateways and shipping yourself.
  • Design your site – Using WordPress themes and page builders, customize the design, layout, and features of your store.

Building your own custom website offers maximum control but requires more technical expertise. If you’re up for the challenge, it can be very rewarding.

Option 2: Using a Dropshipping Platform

For beginners, starting with an established dropshipping platform is often easier. These tools allow you to create a store and start selling quickly.

Here are some top options:

  • Shopify – The leading dropshipping platform. Easy to use with tons of apps and themes.
  • Wix – Drag and drop website builder with built-in e-commerce features. Free and premium plans are available.
  • BigCommerce – Scalable SaaS solution (Software as a service).
  • Squarespace – Beautiful templates and responsive designs.

Dropshipping platforms handle all the technical aspects like payments and shipping for you out of the box. Just focus on setting up your products, customizing your branding, and driving traffic.

Signing Up with a Payment Gateway

To accept online payments, you’ll need to integrate a payment gateway. This securely processes customer transactions.

Top payment gateway options include:

  • Stripe – Code-friendly with great developer tools.
  • PayPal – the most widely used processor.
  • Authorize.net – Reliable with top compliance.
  • 2Checkout – Optimized for global payments.

Whichever platform you choose, take your time setting up your store. This virtual space will be the heart of your dropshipping business, so get it right.

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Getting Support and Mentorship

Starting any business as a teenager can feel threatening. Who can you turn to for help and advice? This is where finding good mentors and support systems becomes vital.

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Having an experienced mentor guiding you makes the process of launching a teen dropshipping business much smoother. Here are some great ways to get support:

  • Enlist your parents – Who better to mentor you than your own parents? If they have business experience, leverage their expertise. Even if not, they can still provide moral support.
  • Talk to business teachers – A business or marketing teacher from school can be a valuable mentor. Reach out and see if they’d be open to advising you.
  • Hire a dropshipping agent – Dropshipping agents are like virtual assistants focused specifically on managing your store’s operations. The right agent can guide you through everything from supplier relations to ad campaigns.
  • Join online communities – Reddit, Quora, Facebook Groups, and forums like Shopify’s e-commerce community are filled with experienced e-commerce entrepreneurs willing to give advice.
  • Find a business mentor – Check sites like SCORE and MicroMentor that connect entrepreneurs with skilled business mentors for guidance.
  • Take online courses – Take dropshipping or general e-commerce courses on Udemy or Skillshare to build your knowledge.

Don’t try to figure everything out alone. Having an experienced mentor to provide tips, feedback, and encouragement makes a huge difference. Surround yourself with people who want to see you succeed.

Sourcing Products and Suppliers

One of the best parts of running a dropshipping business is getting to pick cool products to sell. But finding high-quality, reliable suppliers is crucial.

Start by brainstorming a list of potential products based on current trends and your interests. Avoid saturated markets like phone cases or fidget spinners. Instead look for niche, unique items people will get excited about.

Here are some great places to find suppliers:

  • Alibaba – Massive B2B platform connected to factories, wholesalers, and trading companies in China. Make sure to examine suppliers carefully.
  • AliExpress – Retail arm of Alibaba. Dropship directly from Chinese manufacturers. Smaller inventory but ships quickly.
  • US Dropshipping Suppliers – Connect with US-based suppliers on Oberlo, Spocket, and Dropified to ship faster. Prices are higher but deliveries are quicker.
  • Niche Supplier Sites – For specific types of products like printed apparel, home goods, or jewelry, specialized wholesale marketplaces have deep supplier pools.
  • Trade Shows – Attend a trade show like Canton Fair virtually or in-person to meet potential new suppliers and manufacturers.

Evaluating Suppliers

Don’t just choose the first supplier you find – examine them thoroughly first. Here are some key things to look for:

  • Reliability – Check reviews to ensure they have a solid track record of good service and quality.
  • Quality Inspections – Do they inspect products before shipping? Request photos and samples to verify product quality.
  • Order Fulfillment – How fast do they process and ship orders? Look for 1-4 day processing and shipping under 7 days.
  • Return Policy – Do they allow returns/refunds if customers are dissatisfied? Good suppliers stand behind their products.

Finding suppliers with top-notch products, services, and shipping will make your customers happy and your dropshipping business a success.

Financial Planning and Forecasting

Running a profitable dropshipping business requires financial planning and number crunching, even for teens. By forecasting sales and expenses accurately, you can set growth goals and avoid shocks down the road.

Here are some tips for planning the financial side of your teen dropshipping business:

  • Make a budget – Track estimated startup costs and ongoing operational expenses. Factor in web hosting, software, advertising, and more. Every business has costs.
  • Understand profit margins – Research typical margins for your products. Price competitively but high enough to cover costs and turn a profit.
  • Forecast sales – Using market research and competitive data, estimate your monthly and yearly sales. Account for seasonality too. This helps inform your goals.
  • Review payment processor fees – Add up transaction fees, monthly charges, and payment gateway costs so you know how much you’re paying.
  • Plan for taxes – Remember, you have tax obligations as a business owner. Set aside at least 20-30% of profits for taxes to avoid issues.
  • Build an emergency fund – Financial surprises happen. Set aside 3-6 months of costs in a savings account in case you need quick access to cash.

While not the most glamorous part of the job, getting a grip on the numbers makes it far easier to manage the financial side of your budding teen dropshipping empire.

Marketing Your Business

Alright, your teen dropshipping business is set up and ready to go. Now it’s time for the fun part – getting the word out.

Marketing is critical for bringing in traffic and making sales. The internet provides a ton of affordable promotion options for teen entrepreneurs on a budget.

Here are some effective marketing strategies to try:

  • Leverage social media – As a teen, you likely already know how to use Instagram, TikTok, Facebook, and Snapchat. Create fun, engaging content showcasing your products tailored to each platform’s audience. Run contests and hashtag campaigns to promote your brand.
  • Influencer marketing – Partner with relevant influencers in your niche to have them feature your products. Start small with micro-influencers which are cheaper to work with. Offer free products in exchange for posts.
  • SEO – Research keywords potential customers are searching for and optimize your site and the content around them. This helps people find your store through search engines like Google.
  • Email marketing – Collect customer emails and nurture leads with discounts and helpful content. Email is one of the most cost-effective marketing channels. Just don’t spam.
  • Retargeting ads – Remarket to people who already visited your site through ads following them around the web. This brings back ‘lost’ customers.
  • Guest blogging – Reach new audiences by contributing posts to niche blogs related to your products. Include a bio with a link back to your store.
  • Pinterest marketing – Create eye-catching product Pins suited to the Pinterest audience. Link them back to your store for traffic and sales.
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Don’t try to master all of these at once. Start with 1-3 marketing channels and expand from there. Consistency and high-quality content tailored to your ideal customers is key.

The awesome part about marketing a dropshipping business is everything is trackable. You can see which tactics deliver the most traffic, leads, and sales. Analyze the data and double down on what works.

Operational Considerations

You’ve built and marketed your dropshipping store – now it’s time for the less glamorous but equally important tasks involved in operating your business. Managing day-to-day logistics is crucial for success.

Here are some key operational areas for teen dropshippers to stay on top of:

  • Managing inventory – Keep track of product quantities and availability with suppliers. Restock low inventory items quickly to avoid losing sales.
  • Order fulfillment – Confirm new orders are shipped promptly and customers are updated with tracking info. Follow up if issues arise.
  • Customer service – Provide fast, helpful support via live chat, email, or social media. Aim for same-day replies during business hours.
  • Returns and refunds – Accept returns gracefully and process refunds quickly. This helps build a trustworthy reputation.
  • Supplier relations – Check in regularly with your key suppliers. Share feedback and address problems directly. Strong supplier relationships are invaluable.
  • Accounting – Stay organized with bookkeeping software like QuickBooks. Log all income, expenses, profit, and loss. Having clean books makes tax time easier.
  • Legal compliance – File quarterly taxes, renew business licenses and comply with regulations. Don’t forget sales tax obligations.
  • Data tracking – Use analytics software to monitor website traffic, sales, lead conversion rates, top products, profit margins, and more. Data guides business decisions.
  • Payment processing – Ensure the payment process is seamless. Follow up on any declined cards, disputed charges, or errors.

Dropshipping automates fulfillment but you’re still responsible for managing the backend. Set aside a few hours each week to plug away at these operational tasks. It’ll pay off with smoother day-to-day operations.

Key Takeaways – Can You Start Dropshipping at 14, 15, 16 or 17

Starting and running an online dropshipping business as a teenager is an ambitious but rewarding endeavor. By following the steps outlined in this guide, your chances of success are high.

Here are some key tips to remember:

  • Partner with a parent or trusted adult to handle legal matters like forming a business entity and signing contracts.
  • Build your slick online store on Shopify or another dropshipping platform for easy setup.
  • Find high-quality suppliers that meet your requirements for products, fulfillment speed, and service.
  • Leverage low-cost marketing like social media and influencers to raise awareness for your dropshipping business.
  • Stay on top of operational tasks like inventory, customer service, and accounting for smooth day-to-day management.
  • Reach out to an experienced mentor whenever you need advice or support. You don’t have to do this alone.

Starting a dropshipping business as a teenager is challenging but immensely worthwhile. With consistent hard work and dedication, your entrepreneurial aspirations can become a reality.

I hope you enjoyed the article “Can You Start Dropshipping at 14, 15, 16 or 17?”. If yes, please share.

FAQs – Can You Start Dropshipping at 14, 15, 16 or 17? | Can You Dropship If You Are Under 18?

Do I need a business license to start dropshipping as a teen?

In most cases, yes you will need some type of business license or tax registration, even as a teen. Have a parent register your business and obtain the necessary licenses and permits.

What is the minimum age to open a Shopify account?

Shopify requires users to be at least 18 years old. Teens will need to have a parent open an account for them until they turn 18.

Do I have to pay taxes on income from my dropshipping business?

Yes, you are required to pay income tax on earnings, even as a teenager. Keep detailed records and set aside at least 20-30% of profits for taxes.

What are the best payment gateway options for teens?

Stripe and PayPal are two popular payment gateways suitable for teens, as long as the account is set up by a parent or legal guardian.

Hello, I’m Samuel, and I’ve been in the dropshipping business for the past 9 years. Over the years, I’ve had the privilege of helping many novice dropshippers grow their businesses. Based on my experience, I’ve launched this blog to share my insights and knowledge with the dropshipper community.

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