Amazon and dropshipping are both great ways to start an online business, and many entrepreneurs, both new and old, can take advantage of them. But have you ever thought about starting an Amazon dropshipping business that does both? Since Amazon is one of the biggest e-commerce sites in the world, it makes sense to use it as a marketplace to get sales, since it already has a lot of loyal customers.
People already shop on Amazon every day, and many of them are very loyal to the ecommerce site, always going there first when they want to buy just about anything. So, if you sell on Amazon, you can reach this huge audience and put your products in front of a huge number of people who might buy them. Amazon is one of the most trusted ecommerce platforms in the world, and customers are already used to shopping there. This means that you can start your business on a platform that already has a lot of credibility, which can help your business as well.
Another great thing about Amazon dropshipping is that they take care of a lot of the customer service and shipping for you, so you don’t have to worry as much about those parts of your business. This makes sure that the business is easy to run, has a lot of automation, and can be started with less money than other ecommerce models.
Now that we’ve talked about some of the basics of dropshipping on Amazon, let’s talk about how you can start your own Amazon dropshipping business. This guide will answer the most common questions about Amazon dropshipping and show you how to get started, from finding the right products to putting your own on Amazon.
Amazon dropshipping is a great way to grow your business and reach more people, whether you’re new to ecommerce or an experienced business owner looking for a new platform. So, if you want to learn how to start dropshipping on Amazon, this article will help you get started.
What Is Amazon Dropshipping and Frequently Asked Questions
Even though dropshipping on Amazon sounds great, you might still have some questions about how it all works. In this section, we’ll answer some of the most frequently asked questions about Amazon dropshipping so you can get a feel for the idea.
How does dropshipping work?
Dropshipping is a way for online business owners to sell products without having to keep any stock on hand. When a customer places an order, the store owner just contacts the supplier, who sends the goods right to the customer’s door. Dropshipping businesses are easy and cheap to start because they can be run entirely online. Dropshipping on Amazon works in a similar way, and the next question will explain what the main differences are.
What is “drop shipping” on Amazon?
Dropshipping on Amazon is very similar to dropshipping in general, but there are a few key differences. The first is that your customers won’t order from your website. Instead, they’ll order directly from Amazon.
The other big difference is that instead of your suppliers sending products to your customers, you (or your suppliers) will send all of your inventory to Amazon, and Amazon will then fulfill orders as they come in. This program is called Fulfilled By Amazon (FBA), and it’s a great way to start selling on Amazon without having to worry about carrying inventory yourself.
Is dropshipping on Amazon legal?
Dropshipping on Amazon is completely legal. In fact, their FBA (Fulfilled By Amazon) program is designed to do just that.
But there are some things you need to think about, like:
- All of your products must list you as the seller.
- On packing slips and other information provided, you must say that you are the seller of the goods.
- You have to be in charge of customer returns (accepting and handling them).
- You have to follow everything in your seller agreement and all Amazon rules.
Methods of dropshipping that Amazon doesn’t allow:
- Buying goods from a different store and having that store ship them directly to customers
- Ship orders with packing slips and invoices that have the name of another seller or their contact information.
In the end, you can dropship on Amazon using their FBA program as long as you are the only named seller and no other retailers are named or involved in the process between the buyer buying a product on Amazon and receiving it in the mail. As long as you follow these rules, dropshipping on Amazon is completely legal and allowed.
How much does it cost to start selling on Amazon through dropshipping?
The Fulfilled By Amazon program, which is their dropshipping program, has its own fees that you’ll need to keep in mind when you’re getting started. As a seller, you can choose between two plans when you sign up:
- Individual plan: $0.99 per unit sold
- Plan for professionals: $39.99 to sell as many items as you want
Aside from the plan fees, there are also variable dropshipping fees that are usually between 10% and 15%. When thinking about what to sell on Amazon, it’s important to keep these fees in mind so that you can make enough money after the cost of the product and all fees.
Can you make a lot of money by selling things on Amazon?
Dropshipping on Amazon can be very profitable if you find the right products at the right prices. The key to making money with Amazon dropshipping is to do the work up front to find the right, profitable products. For instance, if you sell an item that gives you a 25% profit margin and Amazon takes 15% of that item, you’re left with a 10% profit. Depending on how much you can sell, how much the item actually costs, etc., this may or may not be enough of a profit margin for you.
To make sure that you’re making money, you need to run the numbers on every product you want to sell on Amazon. Many Amazon dropshippers only sell a few products that do well and bring in a lot of money. Once you find products that make money, you can sell more of them and move on to find the next product that will make money to dropship on Amazon.
To sum up, Amazon dropshipping can be profitable, but you need to be very strategic about the products you choose to sell and always do the math before buying from your supplier.
What are the Pros of Dropshipping on Amazon?
When you choose Amazon dropshipping for your business, you get a number of benefits, such as:
- Access to a huge customer base with millions of buyers
- You can quickly and easily grow your business by taking advantage of FBA’s fulfillment services.
- You don’t have to worry about carrying and shipping items yourself because Amazon does that for you.
- No extra costs for shipping products, like renting a warehouse or hiring people.
Overall, Amazon dropshipping may be the best way to get started in ecommerce and reach a huge number of buyers. Just make sure to do your research before you start, run the numbers on any possible products, and make sure you can control your business costs so that you can make money. If you know how to do it right, Amazon dropshipping can be a great way for aspiring entrepreneurs to get into ecommerce.
The Pros and Cons of Dropshipping on Amazon
Now that you know the answers to some of the most frequently asked questions about Amazon dropshipping, it might be helpful to make a quick list of the pros and cons to see if Amazon dropshipping is the right choice for you. Like anything else, this business model has some great pros and some possible cons that you should think about before getting started.
Amazon Dropshipping Pros
- With millions of buyers from all over the world, Amazon dropshipping can give you a big audience for your products.
- Low costs up front: You don’t have to rent a warehouse or hire people to ship items, so your costs up front are low.
- Easy to start: Compared to other ecommerce businesses, setting up an Amazon dropshipping business is quick and easy.
- You don’t have to ship the items yourself because Amazon will do it for you. This saves you time and money.
- Ability to grow quickly: Amazon FBA makes it easy to grow your business by taking advantage of their fulfillment services.
- When you dropship through Amazon, you don’t have to put a lot of money into a lot of inventory to try out different products.
- Location independence: With an Amazon dropshipping business, you don’t have to be tied to a specific location or storefront. If you can connect to the internet, you can run your business from anywhere in the world.
Amazon Dropshipping Cons
- Low margins: Because you outsource a lot of the work with Amazon dropshipping, margins can be quite low. This just means that you need to choose the products you sell with care.
- Fees: There are several fees that come with Amazon dropshipping that can cut into your profits. These include Amazon seller fees, FBA fees, and supplier costs. These are important things to think about when choosing what products to sell to make sure you make enough money.
- Competition: Because Amazon is so popular, there are a lot of other businesses that sell the same kinds of things.
- No control over supply: When you dropship items through Amazon, you have to rely on your suppliers to keep their stock up to date. If they run out of one of your products and you can’t send more to Amazon, you won’t make as much money.
- Lack of quality control: Since you don’t hold the product and ship it directly to your customers, you’re at the mercy of your dropshipping suppliers, who could send low-quality items that hurt your brand. You can avoid this by working with a dropshipping supplier you trust and testing products yourself often.
- Some dropshipping suppliers are starting to sell on Amazon themselves. When they do this, they can offer the product at a lower price, which makes them a competitor to other sellers. If a dropshipping supplier jumps on a listing, it usually means you’ll have to find a new product to sell.
How to Dropship on Amazon: Step by Step
Now that you know some of the pros and cons of Amazon dropshipping, here are the steps you’ll take to get started if it sounds like the right business model for you.
Create a seller account on Amazon.
Sign up for an Amazon seller account through Amazon Seller Central as the first step. You can choose between a personal seller account and a business seller account when you sign up. How the fees are set up is the main difference. With a personal account, you pay $.99 per item sold. With a professional account, you pay $39.99 per month and can sell as many items as you want.
If you’re just starting out and might only sell a few items a month while you get your business going, the individual seller plan is probably the best choice. You can choose the professional plan if you’re sure you’ll sell at least 40 items per month from the start. Remember that you can always move up once you start making more sales.
When you sign up, you’ll need to give your personal information, billing and tax information, etc., so make sure you have all of this information ready.
Find out about products to sell
The next thing to do is to look for things to sell on Amazon. This can take a lot of time, so you should start with a few product ideas and use tools to help you do the right research. Later in this article, we’ll list some of our favorite tools and software for Amazon dropshipping so you know where to start.
When looking into what you want to sell on Amazon, you should think about the following:
- There is usually less competition for niche products than for more general ones.
- Finding products that are popular all year will lead to more steady sales than selling seasonal items.
- Some products that are easy to show in a short video do well on social media when they go viral.
- If an item is already being sold on Amazon Prime, it’s best to avoid it because someone else is already selling it, making it hard to compete.
- Try to think of products that are either unusual or useful (or both!)
It’s best to have a good-sized list of ideas because once you start looking for suppliers, checking unit prices, and researching the demand for items, you may find that many of them aren’t worth selling. Finding the right things to sell on Amazon does take time. So it’s smart to take the time to do research and come up with a long list of product ideas to look into further.
Find a provider
Once you’ve done your research and found some products that might sell well on Amazon, it’s time to find a supplier. There are many ways to find dropshipping suppliers, and we’ll talk about some of them below.
- Searching on Google seems easy, but it’s still one of the best ways to start your research. For example, searching Google for “stainless steel straws supplier” can help you find possible dropshipping suppliers. Remember to look through many pages of results and try different keywords because it often takes a little digging to find the right supplier. The best options aren’t always the first ones that come up in a search.
- Look for trade shows to go to. Another great way to find dropshipping suppliers is to go to trade shows. There are many different kinds of trade shows. Some focus on a certain industry, while others are open to all kinds of businesses. For example, you could look for local trade shows in your area or even travel to larger national trade shows that cover a wide range of products. This can be expensive and take some time because you have to wait until the event, but it makes sure that you can talk directly to the dropshipping supplier and that you’re working with a reputable company.
- Dropshipping directories: You can find a lot of dropshipping directories online, which can be a great way to find possible suppliers. In these directories, you can find suppliers you can use or directly contact.
Always find out as much as you can about any supplier you want to work with. This means reading reviews, asking for references, and even ordering samples of products to test their quality. It’s also a good idea to contact the supplier several times as you have questions to see how helpful and responsive they are. This can give you a good idea of what it will be like to work with them.
Put your items up for sale on Amazon.
Now that you’ve found a supplier and have products ready to sell, it’s time to put them on Amazon. When you make your listings, you’ll want to do so with a plan, as this is what will help you turn visitors into buyers. You’ll use Amazon Seller Central to make, change, and keep track of your listings.
Make sure you take your time when making your listings so that they are well written, have good photos, and look professional. It’s a good idea to include clear, high-quality photos of the product from different angles when choosing photos for your listing. This will make it clearer to buyers what they are getting when they buy.
Software for Dropshipping on Amazon
One of the best things about Amazon dropshipping is that you can do as little as possible yourself. Using software and tools can help automate many of the tasks involved in running an Amazon dropshipping business, making it easier to manage orders, keep track of inventory, and more.
The Jungle Scout
Jungle Scout is a popular tool that helps you find things to sell on Amazon. It gives you product data from the past, information about keywords, and the ability to track products. You can also make it easier to plan your inventory, automate requests for reviews, and keep track of sales analytics.
- Prices: start at $49 per month or $29 per month if you pay for a year.
Oberlo
The dropshipping tool Oberlo helps you find things to sell on Amazon. You can use Oberlo to find products and get in touch with suppliers. It also works with Shopify if you want to use that ecommerce platform to send your products to Amazon.
- Pricing: Explorer accounts are free to use. Accounts that cost money start at $7.90/month.
Shopify
Shopify is a popular ecommerce platform that you can use to set up your own Amazon dropshipping store. Shopify is already connected to Amazon, so you can easily and automatically add your products, manage your inventory, fill orders, and do other things. When it comes to running an Amazon dropshipping business, this can help you a lot. Shopify also gives you your own storefront, so you can market your dropshipping store and sell directly to customers. If you do this, you can avoid paying Amazon fees for those orders.
- Pricing: is free for 14 days, and then the basic plan costs $29 per month.
Spocket
Spocket is a dropshipping tool that helps you find suppliers and products to sell on Amazon. Spocket is unique in that it lets you work with suppliers who ship directly from their warehouses in the US or Europe. This means that you can get your products to the Amazon warehouse quickly, unlike many dropshipping suppliers who ship from China and take a long time to arrive.
- Prices: There is a free plan, and paid plans start at $24 per month for up to 25 different products.
Conclusion
Dropshipping on Amazon can be a great way to get started in ecommerce with little money up front. It can also be a good way to add to an online store that you already have. Whether you want to make some extra money on the side or start your own business, this article should have given you all the information you need about how to dropship on Amazon. With the tools and resources available today, starting your own Amazon dropshipping business has never been easier.
