Do I Need an ABN for Dropshipping in Australia?

Dropshipping is a relatively new concept in eCommerce that has changed the traditional supply chain, buying, and selling processes.

It can be confusing to know whether you need an ABN to start dropshipping in Australia or not.

In traditional e-commerce, you fulfill orders from pre-purchased stocks or make-to-order stocks.

In dropshipping, you don’t manage inventory. A third-party supplier fulfills orders.

In this article, we will explore the concept of dropshipping, what an ABN is, who needs one, and whether Australian drop shippers should obtain one.

What is dropshipping?

Dropshipping is an innovative e-commerce business model that allows online retailers to sell products without keeping any inventory.

how drop shipping works

Dropshipping works by connecting retailers with manufacturers and suppliers who will store, package, and ship orders directly to customers. 

In this way, retailers don’t need to purchase and store large quantities of products in their warehouses. 

This saves retailers inventory management time so they can focus on marketing, and customer relationships while drop ship suppliers handle the rest of the order fulfillment process.

What is an ABN?

ABN stands for “Australian Business Number”.

An ABN is an eleven-digit number provided by the Australian Business Register (ABR).

The ABN identifies your business to the government, other businesses, and the public.

Who needs an ABN?

Unless your business generates A$75,000 or more in yearly revenues, you don’t have to get an ABN.

Getting one is compulsory if you surpass this annual turnover threshold.

ABN is an essential tool for businesses operating in Australia.

It is used to identify a business and its related transactions with the Australian Taxation Office.

An ABN is also required to register for GST, access government grants and concessions, and open a business bank account.

Any entity providing goods or services in Australia needs an ABN, including sole traders, partnerships, companies, and trusts.

Businesses need to obtain an ABN as soon as possible to ensure they are compliant with the relevant legislation.

Do I Need an ABN for Dropshipping in Australia?

Not everyone needs an ABN for dropshipping. If you are starting a new dropshipping for learning or as a hobby project you don’t need an ABN.

But, when you set up a dropshipping site with a registered Australian domain name, and start paid advertising and marketing for making a profit, you should consider it a business and likely to need an ABN.

In short

  • You don’t need ABN if you are trying dropshipping as a hobby.
  • You need ABN when you are running dropshipping as a profit-making business.

Do you need an ABN for Shopify?

If you want to start a business with your Shopify store, you will have to get an ABN.

But, if you are just selling things on Shopify as a hobby, you might not need to get an ABN.

Do you need an ABN for Redbubble?

Redbubble is a print-on-demand site that allows independent artists to sell their designs on various products like clothing, stickers, phone cases, etc.

Whether you need an Australian Business Number (ABN) to sell on Redbubble depends on your specific circumstances.

If you’re selling as an individual and you’re not registered for GST (Goods and Services Tax), you generally don’t need an ABN to sell on Redbubble.

However, if you’re selling as a business entity or if you expect your income to exceed a certain threshold, you may need to register for an ABN.

Also Read: Do you need an ABN to sell on Etsy?

The benefits of having an ABN

Having an Australian Business Number (ABN) is a great way to identify yourself and your business with the government.

However, there are several other advantages of having an ABN beyond simply being identified.

An ABN can help you save money on taxes, access certain government grants & benefits, and ensure that your business remains compliant with the Australian Tax Office.

Starting a business in Australia is an exciting prospect, but it also requires proper preparation.

One of the important steps in this process is to secure an Australian domain name.

With an ABN, you can register your business name and purchase a .au domain name.

This will allow customers and suppliers to identify you more easily, increasing your trustworthiness and credibility online.

Having a registered business can open more doors for you.

Many suppliers only work with companies that are legally incorporated, as this reduces their risk.

Additionally, to open a business account with financial institutions, you may need an Australian Business Number (ABN).

How to apply for an ABN

Applying for an ABN is a simple and cost-free process that can be completed in just a few steps.

Whether you are starting a business or already running one, having an ABN is essential for making sales and connecting with Australian dropshipping suppliers.

Visit the Australian Government’s Business Registration Service website and follow the steps.