Amazon is the biggest online store in the United States, and people from all over Europe and Canada shop there. In 2022, it had more than 150 million users, and in 2023, it made 125 billion dollars in sales. Amazon’s numbers seem to be going up, as 89% of customers are sure they can buy from Amazon. The number of sales made by dropshippers on Amazon is a number that many people don’t pay attention to. A survey from 2011 said that dropshippers made up at least 34% of all Amazon sales. If the numbers are correct, a piece of the pie that drop shippers take home from selling on Amazon is worth more than $40 billion.
Things to think about before selling through Amazon
If such impressive numbers can be made dropshipping on Amazon, then there is definitely a lot of money to be made on Amazon if everything is done right. Before you decide on Amazon dropshipping, you should think about a few challenges and questions along the way. Amazon dropshipping is not completely free. If you have an individual account, you have to pay $0.99 per unit sold on Amazon. If you have a professional account, you have to pay a flat fee of $39.99, no matter how many units you sell.
When you’re done with the cut above, you have to deal with a referral fee. Based on the type of product, the fee can be anywhere from 8% to 15%. Because of the fee, if you want to make a lot of money on Amazon, you need to aim for good seller margins. If your margins are too low, the cost of sales will put you out of business.
Amazon lets merchants dropship items on their site as long as they follow a few rules that may be hard for dropshippers who are just starting out. The following must be true of the Merchants:
- always be on record as the seller
- Identify themselves on all invoices, packing slips, outside packaging, and any other information that comes with or is given with the product. The supplier or manufacturer must never be mentioned. Are responsible for accepting and processing all customer returns. Must follow all of Amazon’s Terms of Service.
How to make sure you make money on Amazon
Dropshipping on Amazon can be hard to make money with because of the fees and rules that you have to follow. But it is possible and common to make money dropshipping on Amazon if you do what you need to do to stay competitive and keep going. You can make sure your Amazon business does well by:
Get the “Buy Box.”
82% of all Amazon sales happen at the “buy box,” and even more of those sales happen on mobile devices. If there was only one way to make money selling on Amazon, it would be to win the “buy box.” Unfortunately, not all sellers can win the “buy box.” The Buy Box is a white box on the right side of the product detail page on Amazon. This is where customers can add items they want to buy to their shopping cart.
To get into the buy box, the seller must first have a high seller rating. The best grade is one that is above 95%. Second, you need to show that you are efficient by making sure that the things you sell ship quickly, preferably in less than two weeks. Lastly, your shipping costs should be lower than most other sellers’, your response time should be quick, and you should have a high feedback score.
Make your name known.
Dropshipping has a fatal flaw in that you are not in charge of making and designing the products in the end. To make matters worse, the same product you sell on Amazon may also be sold by other sellers who get it from the same source. If you don’t have a real advantage over your competitors, you can spend time building your brand to make yourself seem better. People often use stainless steel tumblers as an example. Even though YETI sells theirs for $40 and RTIC sells theirs for $20, YETI is still able to beat RTIC because many people are willing to buy brands and don’t notice how similar the products are.
Pay attention to the customer and get good reviews.
Your customer is the most important part of a dropshipping business on Amazon that makes it successful. You can build good relationships with people through good customer service and branding. Try to get good reviews, as they may not only help you get into the buyer box but also get people to buy from you.
If you have good product reviews, you are more likely to show up in organic searches, which could lower your advertising costs. A good rating on Amazon can help you make more money and also make customers trust your products more, which leads to more sales.
Do Keyword Research That Looks at Competitors
When talking about organic search, it’s important to make sure your keywords are in order. If your customers can’t find you online, you won’t be able to make any sales. Make sure that search engines can find your pages. There are many tools like Merchant Words, Jungle Scout, and Amazon’s Helium 10 that can help you find keywords. Good keyword research helps you get to the top of search results and find the right customers who need your products. Optimize titles so that they focus on what the user wants and use the most relevant keyword instead of using too many keywords.
Put your listing out there.
Dropshipping is basically selling products and getting a cut of the sale price. If you want people to look at your Amazon listing, you still have to follow the rules of dropshipping. You can choose Amazon Pay-per-click (PPC), which is a paid ad that helps your product rank higher on Amazon for certain keywords.
If you don’t have enough money to spend on Amazon, you might want to think about promoting your product somewhere else. Blogging, social media marketing, and email marketing are the most common ways to do this, and some of them are very cheap. You can also offer discounts and coupons to bring people to your listing. The more you tell people about your product, the more it will stand out on Amazon.
Take a methodical approach to pricing
Dropshipping on Amazon is in a league of its own. If your prices are wrong, you are out of the game for good. If your prices are too low and you don’t take Amazon’s fees into account, you’ll lose money. If your prices are too high, another seller will sell for less. Try to find a dropship supplier that offers free or cheap shipping to keep your costs low and keep your prices competitive.
With so many people shopping on Amazon, dropshipping is a gold mine. To stay ahead of the competition, you have to learn how to stay relevant. You can always order samples ahead of time to see what kind of deal your customers will get from your dropshipper. You can also expand your dropshipping business beyond Amazon to make money from both Amazon and your own dropshipping store.
