One of the most lucrative online ventures is Amazon dropshipping, and this book explains everything you need to know to get started.
E-commerce experts have been trying to establish a connection between dropshipping and Amazon since the concept first emerged.
This is why we have brought you a comprehensive guide that will walk you through the process of dropshipping on Amazon.
This manual will show you how to dropship on Amazon, the dos and don’ts of Amazon dropshipping, and other helpful hints for doing so in a way that is both legal and efficient.
Therefore, if you work in the field of dropshipping, you should stick around as we delve into the rabbit hole of investigating strategies for selling dropship items on Amazon.
The time has come to get going.
What Is Amazon Dropshipping?
When compared to traditional online retailing, dropshipping saves both time and money by eliminating the need to stock and ship individual items to customers.
In this model, customers place orders on your e-commerce site and those items are shipped to them from other stores, which are primarily product sourcing platforms.
Dropshippers set up their own online shops to rake in orders at a premium, then send those orders, along with the customer’s shipping information, to the original supplier for fulfillment.
In this way, they are able to keep the profits from their dropshipping business.
Having your own store is exciting, but it comes with the risk of having no customers because nobody knows about it.
“Amazon Dropshipping”
And that’s why some brilliant dropshippers came up with the concept of selling goods on Amazon through their business. In other words, you can use Amazon to conduct dropshipping operations.
How Does Amazon Dropshipping Work?
Just like with regular dropshipping, Amazon dropshipping operates on the same principle. The only difference is that you would use Amazon to do the selling.
You sign up for an Amazon seller account and list your goods for sale. Orders placed on Amazon are sent to other sellers to be fulfilled.
Just like that, you’ve successfully dropped shipped from Amazon.
Despite appearances, there are a few rules to follow when using the dropshipping model to sell on Amazon. These restrictions and methods will be covered in more detail later in the article.
Is Amazon Dropshipping Legal?
Yes. Dropshipping through Amazon is perfectly legitimate and does not fall under any commercial or financial black markets.
Inquiries like “Is dropshipping allowed on Amazon?” are common from prospective newcomers in this business model.
In a word, yes. Amazon facilitates dropshipping directly on its website.
However, unlike some other dropshipping platforms, Amazon’s is not child’s play. You must abide by Amazon’s guidelines if you plan to engage in dropshipping.
You need to be familiar with Amazon’s preferences to get the full, nuanced answer to this question.
Unless you put yourself in Amazon’s position, it’s impossible to understand why dropshipping on Amazon should be legal or illegal.
Imagine for a second that you are the CEO of Amazon. Is there anything you’d change if you could influence Amazon’s future success?
Would you accept vendors who set up shop on Amazon under one name but ship their customers products under another?
Is it acceptable to dropship from Amazon?
Also, don’t you think your customers would be insulted if they received their orders 45-60 days after they paid?
Doesn’t that make you worry about your massive online store’s reputation being damaged by these kinds of things?
However, since increasing profits is the primary goal of your online store, you don’t want to risk losing customers to competitors’ websites just because their products aren’t featured on yours.
Your customers should not receive an invoice, a tag, or any other evidence from another vendor that they have purchased the product from you.
You’d also need to establish a rule mandating that all orders be fulfilled within a certain number of days.
Amazon has created dropshipping guidelines for its sellers to follow in order to avoid these types of problems. We refer to these regulations as the Amazon Dropshipping Policy.
This Amazon dropshipping policy may seem obvious, but we’ve restated the key points in plain English for your convenience.
Demonstrate that you are the genuine article when it comes to the products you’re peddling.
You must be identified as the seller on all product packaging and paperwork.
There must be no indication of a middleman or reseller on the delivered package.
You’ll need to demonstrate your reliability by handling customer concerns, returns, etc.
Follow all other Amazon guidelines that don’t specifically pertain to dropshipping.
You should now realize that, provided you follow the aforementioned guidelines, dropshipping on Amazon is entirely feasible.
How Do I Start a Dropshipping Business on Amazon?
Let’s take it slow and get the hang of dropshipping on Amazon.
Dropshipping on Amazon can be accomplished in two primary ways.
The Dropshipping Advantage of Shopify for Selling on Amazon
Using Amazon FBA for Dropshipping
Discuss it both ways.
Amazon Dropshipping via Shopify
It’s likely common knowledge among Shopify dropshippers that Shopify now offers Amazon as a sales channel.
Here, we’ll walk you through the six-step process of dropshipping on Amazon from a Shopify store.
Register Yourself on Amazon as a Seller
Try to find the “sell” button on Amazon.com’s main page and click it, as shown in the screenshot below.
Participate in the Amazon Marketplace as a vendor.
If you click that link, a new page will open with the words “Become an Amazon seller” and a registration form.
If you’re ready to register as a vendor, click the “Sign Up” button.
We need the following details from you on the following pages:
Data on the Business and its Vendors
In-Store Purchase Verification
Where Sellers Go to Sell on Amazon
Note that once you’ve updated your profile, you won’t be able to make any changes to the information you’ve provided, so please be as accurate as possible.
Warning: When signing up to sell on Amazon, never use your personal email address. The reason for this is that selling your Amazon store in the future may necessitate disclosing your email login and password to a potential buyer.
Choose from the following packages when creating your Amazon seller account:
Insurance Coverage for Individuals Insurance Coverage for Professionals
While there are no regular dues associated with the individual plan, there are also fewer options to pick from in terms of products, services, etc. In addition, Amazon will take $0.99 from each sale.
There is no limit to the number of categories you can select from in the professional plan, but Amazon will charge you $39.99 per month.
If you sign up for an Amazon business account, you won’t have to pay per item.
Choose the Right and Profitable Products to Sell on Amazon
The next step is to decide which products have the best shot at selling well on Amazon. Given that you’ll soon be selling on a new platform, you’ll need to adopt a new method of conducting thorough product research.
You’ll need to search for and sign up for products that have low levels of competition but high profit margins on Amazon.
At first, it might seem like everything you could possibly want to sell is already available on Amazon. However, if you put in the time and effort, you will find some fantastic product ideas that could launch your Amazon dropshipping business.
Check Amazon for the availability of any products you find on AliExpress that are novel to the online market. If you find a potentially successful product that is not widely available on Amazon, you should still pursue it.
But remember, that timing to launch a product is everything in e-commerce.
Integrate Your Amazon Store with Shopify
Login to your Shopify account and try to locate the option of Sales Channels. To add Amazon to your other channels of distribution, click the “+” button.
If the “+” button doesn’t bring up Amazon, try searching for “Amazon” in the Shopify Marketplace.
Shopify and Amazon should be integrated.
The end result looks like the one in the screenshot below.
You can start making Amazon listings as soon as you install the Amazon Channel app on your Shopify account.
Create Your Amazon Product Listing
Developing a listing for your product on Amazon is the next logical step. There are two ways to gain access to this feature:
Amazon Listings for Products
Click “Inventory” in the menu bar at the top left of your Amazon account, and then select “Add a Product” to begin adding products for sale.
Using Your Shopify Account to List Products
Look for “Create Listing” on the left side of your Amazon sales channel. In order to upload products to Amazon from your Shopify account, just follow the steps in the video below.
Sync Your Amazon Shop with Shopify
It is crucial that you link your Amazon store with your Shopify store. Among the advantages you’d reap is that Shopify would keep Amazon informed of your stock.
That’s a huge development toward fully automated dropshipping. It might not be fully automated, but it would be the right direction to head in.
Promote Your Amazon Store
Not all stores that have a presence on the largest online marketplace in the world end up making a lot of money, even if those businesses are doing everything possible to attract customers. That’s because a flood of competitors from all over the world will soon flood Amazon’s marketplace.
That being said, if you want to stand out, you need to market your Amazon store the same way you market your Shopify dropshipping store.
More foot traffic should be the primary goal of any advertising campaign for your store. Your chances of being successful on Amazon, or any other dropshipping platform, increase as more people visit your site.
In this article, we will discuss some of the most widely used forms of advertising:
Sponsored Content from Amazon
SEO (Search Engine Optimization) that focuses on optimizing for keywords
employing strategies like Social Media Marketing, Influencer Promotion, and Email Ads
Remember that dropshipping on Amazon is distinct from dropshipping on Shopify. The only reason people will visit your Shopify store is to look at what you have to sell. There won’t be any rivalry among employees.
Dropshipping on Amazon
On Amazon, however, there’s always a chance that a shopper will end up purchasing the identical item from someone other than you. That’s because Amazon recommends other stores’ equivalent products to every visitor.
Therefore, you would need to outdo the competition on Amazon in terms of pricing, services, reviews, etc. if you want to attract and retain customers.
Amazon Dropshipping via Amazon FBA
The alternative approach is a little more advanced than regular dropshipping. Drop shipping with Fulfillment by Amazon (FBA) describes this practice.
Fulfillment by Amazon, or FBA for short. This method requires you to ship your goods to Amazon, which will then be responsible for storing them and sending them out to customers as orders come in.
Below, we outline the 7-step process involved in implementing the FBA dropshipping model.
Those items you buy are sold to you by an outside vendor.
Those goods are on their way to Amazon from you.
Amazon keeps charging you even though it stores your goods in its own warehouses.
You’ve just finished uploading new product information to your Amazon store.
Your products are being ordered by Amazon customers.
Products are selected from Amazon’s warehouse, packed, and shipped to the specified location.
Following Amazon’s customary deductions, you receive the net amount from those sales.
Because you become the legal owner and custodian of the products you purchase and ship to Amazon under the FBA model, it is no longer dropshipping in its purest form.
The thing is, even if you had a warehouse, you still wouldn’t be able to store, pack, and ship products to your customers. It would be Amazon taking care of that for you.
Is It Better to Dropship on Amazon or Shopify?
This is a common concern among dropshippers who are just starting out or are having difficulty expanding their business. The correct response to this inquiry is highly contextual.
If you’ve decided to enter the world of dropshipping, there’s only one rule you should live by: don’t forget to check everything twice.
Dropshipping on one platform versus another is a topic of debate, but ultimately, you should do what’s best for your business.
It is recommended that those new to drop shipping begin their endeavors on Shopify, where they will enjoy greater flexibility and convenience.
Dropshipping on Amazon requires extra caution due to the site’s stringent policies, which can result in a permanent suspension of your seller account.
Can You Dropship on Amazon from AliExpress?
Yes. Dropshipping on Amazon from AliExpress is possible, but requires careful execution.
In this case, the question becomes how to dropship on Amazon from AliExpress without risking suspension of your Amazon seller account.
Here are some of our best practices for dropshipping on Amazon from AliExpress. If you want to be successful at dropshipping from AliExpress to Amazon, you should consider implementing the advice provided below.
Choose Trustable Suppliers on AliExpress
The key to running a profitable dropshipping business on Amazon is finding reliable suppliers on AliExpress. Your supplier should ideally be familiar with dropshipping on Amazon.
In that case, your supplier likely knows what they’re doing when it comes to dropshipping on Amazon.
If your supplier has any questions or concerns about complying with Amazon’s regulations, you should have a lengthy discussion with him to ensure that you both understand and agree with the information presented in the Amazon Dropshipping Policy.
It would be great if you could inform your supplier of other Amazon rules to ensure that they do not send any products that are not on Amazon’s approved list.
Before choosing a supplier for Amazon dropshipping, you should pay close attention to the supplier’s rating and the number of years the supplier has been present on AliExpress.
Suppliers Should Have Warehouses in Your Customers’ Countries
Many AliExpress vendors maintain warehouses in developed Western nations like the United States, the United Kingdom, Spain, France, etc.
The selection of these vendors would give you a leg up in terms of receiving your goods in the shortest possible time, which is a priority for Amazon.
Ask Your Suppliers Not to Include Anything in the Package That Shows Him as the Seller
The information about Amazon’s dropshipping policy that was presented earlier in this article must now be fresh in your mind.
You should insist that your supplier not include any information that could be used to determine that you are not the legitimate seller of the goods in question.
This is something every dropshipper, whether he does so through Amazon or Shopify, must remember.
Even if your AliExpress vendor is a seasoned pro, it never hurts to double check with them and make sure they understand not including a receipt, promotional materials, or the AliExpress logo in the package.
How Much Money Do You Need to Start Dropshipping on Amazon?
It is dependent on your goals for your Amazon dropshipping business.
Below, we’ve outlined some of the more fundamental costs you can expect to encounter as you launch your Amazon dropshipping business. After factoring in the following Amazon drop shipping fees, your final price will be determined.
Selling Plan
The Individual Plan and the Professional Plan are Amazon’s two options for sellers.
You’ll be charged $0.99 per unit under the Individual Plan, but only $39.99 per month under the Professional Plan, so there’s no need to worry about additional fees.
Referral Fees
Amazon refers to its sales commission rate, also known as a referral fee, as the Amazon Commission. Fees for making referrals change from product to product.
Most Amazon referral fees sit somewhere between 8% and 15%.
Amazon’s referral fee ranges from 8% for consumer electronics to 45% for Amazon device accessories, and from 15% for Home and Garden products to Pet supplies.
Fulfillment Fees
Because Amazon handles everything from warehousing and shipping to customer service and returns for the FBA program, you will be charged a fulfillment fee.
Promotional Charges
Amazon’s storage fees are calculated on a per-cubic-foot basis. Read on to get an idea of how much it costs to keep inventory on Amazon.
Between the months of January and September, Amazon’s pricing per cubic foot is $0.75.
From October through December, storage costs average $2.40 per cubic foot. The reason for this is the seasonal increase in product demand.
If a seller decides to promote his products on Amazon, he will incur promotional costs.
Similarly to other platforms like Google and Facebook, etc., advertising on Amazon functions in much the same way.
Your decisions will affect how much money you spend on advertisements. Limits on ad spending are something you determine. Advertisements from your competitor will be prioritized over Amazon’s if he is able to offer a better price.
Be wary that the peak season of Amazon sales, i.e., when inventory storage costs are highest, is also when advertising costs are highest.
Costs for Amazon advertising campaigns
This is due to the intense competition among retailers caused by the close proximity of Halloween, Black Friday, Christmas, and New Year’s.
If you want to make a profit from Amazon dropshipping, you’ll need to factor in these expenses when setting prices for your products.
Is Amazon Dropshipping Profitable?
Yes. Those who approach Amazon drop shipping strategically over the long term stand to make a good profit.
Over 215 million Americans use Amazon each and every month. Because of this, dropshippers and other online merchants have a huge window of opportunity to capitalize on.
What’s the catch, though, if you really want to succeed at selling on Amazon? Building up your Amazon seller profile is the key to expanding your business and attracting new, repeat customers.
Is there money to be made dropshipping on Amazon?
Amazon shopping has become so commonplace in the West, especially with the rise of mobile online shopping, that this is essential to maintaining customer loyalty.
A successful seller on a marketplace like Amazon is one who remains constant in their service of customers and dedication to the delivery of high-quality goods, even as other sellers rise and fall.
Given Amazon’s vast user base, you need to attract as many buyers as possible by showcasing high-quality, one-of-a-kind products and providing first-rate service.
That’s why many suppliers avoid doing business with Amazon’s marketplace.
An increased number of volumes and lightning-fast shipping times are the keys to success in Amazon dropshipping.
If you want to make $5,000 per month, for example, you shouldn’t aim to sell 500 items at a profit of $10 each, but rather 1,000 items at a profit of $5 each.
Do You Need a Business License to Dropship on Amazon?
No. Dropshipping on Amazon does not necessitate a business license.
To begin selling on Amazon, you need not even have a legitimate company.
Actually, Amazon is the one who actively promotes new sellers to its marketplaces. Because of this, Amazon encourages customers who have purchased a similar product to list it for sale on the site. Me-too listing is Amazon jargon for this type of selling.
Having a valid business license is helpful for establishing trust with Amazon, but it is not required for regular selling or dropshipping on the site.
What Are the Dos and Don’ts of Amazon Dropshipping?
When embarking on an Amazon dropship business, there are a few things you should remember.
By adhering to these safety measures and recommendations, you will have a much easier time making rapid progress as a dropshipper. Following is a rundown of some of the more common mistakes that can be made when dropshipping on Amazon.
Dos of Amazon Dropshipping:
Deliver items as quickly as possible.
Make an effort to be featured in the Amazon Buy Box. This will increase your sales, but only if you have a professional seller account and a stellar track record.
Provide accurate information about yourself and your business on Amazon and to your customers.
In order to sell your Amazon store for a high price in the future, it is recommended that you create a brand-new or custom email address specifically for your store.
Don’ts of Amazon Dropshipping
Conducting business on Amazon requires an exceptionally high level of professionalism.
Here are some common pitfalls to avoid when dropshipping on Amazon. You can find this information in Amazon’s Seller Central.
Don’t try to circumvent Amazon by communicating with your customers elsewhere.
Try to stay away from suspicious deals and reviews.
Keep your dropshipping method a secret from your customers.
What Are the Pros and Cons of Amazon Dropshipping?
Though there are many positives to starting an Amazon dropship business, there are also some drawbacks to consider.
The benefits and drawbacks of becoming an Amazon dropshipper are outlined below.
Pros of Amazon Dropshipping
Large Customer Base
When it comes to online marketplaces, Amazon is unquestionably among the best. Millions of people every month come here specifically to do their online shopping.
If you sell on Amazon, you’ll have access to their massive customer base.
Customer Trust
Amazon is now widely regarded as the best online retailer, especially in the West. This means you can also criticize its high standing.
Your products will be well-received by consumers, and they will consider you a reliable vendor.
Hassle-free Sales
When working with Amazon, you won’t have to worry about handling or customer service because the company takes care of those details on its own. Because of this, you can expect to pay a hefty sum for Amazon’s services.
Just do your best and take advantage of Amazon’s regular sales.
Long-term Business
If you can earn Amazon’s trust as a supplier, you will be able to capitalize on a sustainable business model that features a steadily expanding clientele.
Adding more items to your Amazon store is another way to broaden your reach. One more thing: Amazon is a great place to launch a private label dropshipping business.
The Benefit of Amazon SEO
In the same way that other megastores have their own search engines, so does Amazon. Using effective search engine optimization strategies, you can harness the potential of keywords and rise to the top of Amazon’s search results pages.
Advantage of Amazon Affiliates
When you promote and sell Amazon products, you can earn a commission through Amazon’s affiliate programs. Online marketers can promote anything they like from Amazon’s catalog.
As a result, it’s not out of the question that a third-party affiliate marketer will choose to promote your goods. It would benefit you both equally.
Opportunity to Flip Your Amazon Store
If you have an established Amazon store with consistent sales, you may be able to sell your business for a substantial sum. It’s a surefire way to make money right away.
Dropshipping on Amazon
You can make a huge profit by selling your Amazon store for a lump sum on marketplaces like Empire Flippers.
Cons of Amazon Dropshipping
There is no such thing as a business that has no flaws. The same holds true for the Amazon dropshipping business model. A few of the drawbacks of dropshipping on Amazon are outlined below.
Easy Customer Distraction
It’s possible you’re thinking that if you could sell to more people, you’d have more success. It’s true, but it could just as easily be the other way around.
As customers browse your store, Amazon will recommend other items that might interest them. Buyers may switch to a different vendor if they discover a superior product or the same product at a lower price.
Squeezed Margins
With the ever-increasing level of competition on Amazon, you’ll need to lower your profit margins to survive.
The already-mentioned high price that Amazon charges is another contributor to a tight margin. A small profit margin would be left over after adding all of those costs to the selling price of your products.
Extra Cost of Storage
This refers specifically to dropshipping on Amazon through FBA. Even if your products aren’t selling, you’ll still be responsible for covering the costs of Amazon’s storage and shipping infrastructure.
Higher Returns & Refunds
Amazon puts its customers’ needs ahead of those of its sellers. Amazon shoppers are aware of this.
Thus, you may experience more chargebacks and returns on Amazon than with other dropshipping platforms.
Summary
Congratulations, you have just finished reading the world’s most comprehensive dropshipping guide for Amazon. We hope that we’ve been able to provide you with the information you need to get started with Amazon dropshipping.
Comment below to let us know if you found this article helpful, and if you have any future plans to enter the Amazon dropshipping market. Please don’t hesitate to get in touch with us if you have any questions or concerns about starting an Amazon dropshipping business.
One of our top priorities is reaching out to our readers and providing assistance with your dropshipping enterprise.
Check back with us from time to time, as we will be updating this article as the landscape of online commerce evolves.
