Dropshipping as a Student in Germany

Health Insurance

As a (working) student in Germany, you profit from a discounted insurance price. Depending on your insurance it is around 110€ to 140€ a month. You can only stay in this insurance “class” as long as you are a student who is not working more than 20h as an employee (40h possible in semester break) or you are not Full-Time Self-Employeed. There are no concrete numbers regarding Full-Time Self-Employeed and it is up to decide by the insurance company. The advisor of my insurance told me that I can stay with the student tariff as long as I don’t work significant hours beside my working student position (e.g. only a few hours in my semester break). Seeing the calculation below shows the significant difference between being in a student tariff or a Full-Time Self Employeed Tariff (student status as leverage). Additional Insurance Costs: 0€

Filling out the form in Bavarian can be done here: https://formularserver.bayern.de/intelliform/forms/rzsued/rzsued/rzsued/gewan/gewerbemeldung-druck/index (filling out takes around 45min).

Trade Authority

Next up is the Registration with the Trade Authority. There are only two sensible options in my case: “Kleingewerbetreibener” or “Freiberufler”. Especially when starting, the differences are not that significant (generally “Freiberufler” has advantages regarding bookkeeping and tax), but as long as the dropshipping business is quite small it is not that important. Also “Freiberufler” has some specific requirements which are probably not fulfilled with my dropshipping store. With the Registration, you receive a UST-ID which is crucial for setting up the Shopify Store. The cost of Registration is 50 €.

Shopify

Most of the other Dropshipping factors can be done within Shopify when the most crucial topics are researched: health insurance & tax. I choose Shopify as my store because it is very mature with great plugins. My product should be related to my work field where I have experience and therefore I saved the domain boredaccountant.de (PW: accountant) ). The domain costs 1€ for the first year.

Store Logo

I created my logo on Canvas, where it is quite easy to create your own logo. You don’t even need a pro version. It is just important to note that I can not trademark my logo and it can be used by competitors. As I don’t expect to build a brand with my store, this is not crucial. Costs of Store Logo: 0€

Product & Supplier & Delivery

I choose my supplier to be Shirtigo as they have a very intuitive interface (safes time) and they are specialized in supplying Dropshipper. Most importantly: I don’t have to order in bulk or store something in my inventory. They will produce the product as soon as a customer orders something on my Shopify Store (Shopify Integration). The average delivery time is only 3 days. For my shop, I choose a cup. Delivery & Production per Cup is 11.1€.

Legal Texts

There is the opportunity to just copy and paste the legal texts. But this obviously leaves a big risk. The safest way is to work together with a law firm. The offer from “It-Recht Kanzlei” München also includes legal aid in case you receive dunning letters (”Abmahnungen”). The costs amount to 10€ a month.

Marketing

After creating the store it is crucial to attracting customers. Accountants, which are my target customers, are not a broad target group( even though it is possible to run ads specifically for specific professions on Facebook). I created a Facebook Business Account and assumed the Marketing Costs per Product to be 7€. Similar to the Dropshipping video here: https://www.youtube.com/watch?v=jYx6NC46TaE

Bookkeeping & Transaction Fee & Tax

The Transaction Fee depends on the Payment Method. For my business plan, I assumed it to be 2,45 % + 0,35 (Paypal Costs) which is between the maximum and minimum amount that I have seen for the different Payment Methods. The sales tax (”Mehrwehrssteuer”) is 19 %. It only has to be paid once, so it will be partly offset by the tax paid to the Supplier (”Vorsteuer”). In order to handle all this Bookkeeping, it is most efficient to use a bookkeeping system like WISO. There it is possible to create a template for invoices, include a bank integration, and make all the bookkeeping. It costs for the first year 11.20 € a month.