Amazon Dropshipping Guide: How To Dropship on Amazon (2022)
It’s easy to see why an entrepreneur would want to try Amazon drop shipping. The company had more than 300 million active users and over $280 billion in sales in 2019—using Amazon store dropshipping as a sales channel for your business may result in significant earnings.
What is Amazon dropshipping, and how does it work, exactly? And how can you use it to build a successful online business?
This step-by-step tutorial will walk you through how to start selling today by dropshipping on Amazon, how to make money dropshipping on Amazon, and the best tools for beginning merchants.
Does Amazon allow dropshipping?
Yes! Amazon does allow dropshipping on its platform.
- Always be the seller of record for items.
- Identify yourself as the seller on packing slips, invoices, and other documents connected with items.
- Before sending the order, remove any references to the third-party vendor, including invoices, external packing materials, and packing slips.
- You’ll be in charge of handling and processing returns.
- Please review all of your seller terms and Amazon/dropshipping regulations.
How much does it cost to dropship on Amazon?
You’ll need to register for a Professional account to dropship on Amazon, which costs $39.99 monthly. You also may be charged additional fees for listing and selling your products.
Is Amazon dropshipping profitable?
Amazon dropshipping can be profitable for entrepreneurs willing to invest time and energy into building a successful business.
To make money dropshipping on Amazon, you’ll need to source high-quality products at competitive prices, create compelling listings, and drive traffic to your listings. You’ll also need to be prepared to invest time and money into marketing your Amazon store.
Pros and cons of Amazon and dropshipping
Pros of Amazon and dropshipping
The advantages of selling on Amazon are comparable to those of eBay—it’s simple to get started, you have immediate access to a large audience, and you don’t have to worry about marketing or SEO:
Most items are sourced through Amazon’s Vetted Amazon Drop-Shipping Partners. Amazon mainly purchases goods from European suppliers in bulk. It is then kept in an Amazon warehouse until it is ready to be sent. You may sell high-quality items to a global market, whether you’re a new vendor or an experienced pro.
There are no upfront expenses for starting an Amazon FBA store. You may also use the site to find and compare inventory from thousands of vendors and purchase items straight from their warehouses. When you handle your fulfillment, you will save money on storage and shipping costs and labor costs. Amazon also has its sort of fulfillment centers known as Amazon warehouses that will store and ship your products for you (called Amazon Fulfillment).
Increased discoverability. There are more than 30 Amazon categories to select from. You can sell in as many different dropshipping niches as you want, which, with the appropriate dropshipping vendors and goods, might help you target super-targeted consumers.
Cons of Amazon and dropshipping
Exposure of sales data. One danger you run with Amazon’s platform is that Amazon has access to all of your sales information, from which items are the most popular to how much you’re selling. Customers have complained that Amazon has used this information to optimize sales possibilities and strengthen its role in the market, eventually pushing out other businesses.
Customers won’t have as much of a long-term connection. It’s hard to imagine forming a long-term relationship with your customer base. Amazon is more interested in assisting vendors in selling their products than developing client relationships. Expect to be limited in how you can brand your business, show your items, and interact with your consumers.
There are no customizability options. You’ll be highly restricted in terms of customization. Everything involving branding, UI, marketing, and everything else is controlled by Amazon.
The upfront investment is required. You’ll need items from the supplier in your inventory to meet Amazon’s fulfillment demands. This implies you’ll have to invest money upfront in starting dropshipping on Amazon.
How to start dropshipping on Amazon in 6 steps
- Get an Amazon seller account.
- Choose your niche
- Find a supplier
- Create your product listings
- Drive traffic to your listings
- Fulfill orders and manage customer service
- Get an Amazon seller account: To start dropshipping on Amazon, you’ll need to create a Professional Seller account. To do this, go to Amazon’s seller registration page and fill out the necessary information.
- Choose your niche: Once you have a professional seller account, you’ll need to decide what products you want to sell. You can use Amazon’s Best Sellers Rank (BSR) feature to find a profitable niche. To do this, go to Amazon.com and find a product in the category that you’re interested in. Then, look at the BSR of that product. The lower the number, the more popular the product is.
- Find a supplier: Once you’ve chosen your niche, you’ll need to find a supplier who can provide you with the products you want to sell. There are a few different ways to do this:
- You can use a dropshipping directory like SaleHoo or Oberlo.
- You can use Google to search for suppliers.
- You can find suppliers on Alibaba.com.
- Create your product listings: Once you have your products from your supplier, you’ll need to create your listings on Amazon. To do this, go to Amazon’s Seller Central and click “Add a Product.” Then, follow the instructions to list your products.
- Drive traffic to your listings: The next step is to start driving traffic to your listings. There are a few different ways to do this:
- You can use Amazon’s pay-per-click (PPC) advertising platform.
- You can optimize your listings for organic search traffic.
- You can run promotional campaigns.
- Fulfill orders and manage customer service: Once you start receiving orders, you’ll need to fulfill them and provide customer service. To do this, you’ll need to:
- Communicate with your suppliers to make sure orders are fulfilled on time.
- Pack and ship products to customers.
- Provide customer service.
- Manage returns and refunds.
By following these steps, you’ll be on your way to starting a successful dropshipping business on Amazon.
Amazon store dropshipping to eBay
Dropshipping is an older model that has remained in use. Dropshipping cheap items from Amazon FBA to eBay customers is a classic dropshipping strategy. While it is legal, it is generally frowned upon by platforms and buyers, and you only earn a minimal profit margin.
Consider it from a customer’s perspective: you spend $20 on an eBay grooming brush. You wait a week, and you’re overjoyed. Then when FedEx arrives at your door, your brush comes in an Amazon box instead.
You’re still trying to figure out how you could have gone broke in such a short time. When your curiosity is piqued, you go on Amazon and discover the product for a few dollars less than what you paid.
The dropshipper benefits from this model, but no one else does. eBay also doesn’t support the Amazon-to-eBay-arbitrage business model, which allegedly banned hundreds of Israeli firms in 2017.
In conclusion, avoid Amazon dropshipping to eBay if you want to start an honest and truthful Amazon dropshipping company.
Top Amazon dropshipping software
A few software platforms can help you with your Amazon dropshipping business. They automate various processes, such as product sourcing, listing creation, order fulfillment, and customer service.
The three most popular Amazon dropshipping software platforms are Oberlo, Sellbrite, and Inventory Source.
Oberlo is the most popular dropshipping platform on the market. The Shopify app allows you to find products to sell, create listings, and fulfill orders.
Sellbrite is a software platform that helps you list and sells products on multiple eCommerce platforms, including Amazon.
Inventory Source is a supplier directory and order automation platform. It allows you to find products and automate inventory management and order fulfillment.
These are the three most popular Amazon dropshipping software platforms. However, a few other options are available, such as Mercari and Doba.
The best way to find the right platform is to try a few different ones and see which one you prefer.
Running a dropshipping business with your online store.
There are a few different ways to run a dropshipping business. One option is to create your online store. This gives you more control over your brand and allows you to build a relationship with your customers.
However, it’s important to note that running an online store requires more work than dropshipping through Amazon or other eCommerce platforms. You’ll need to handle all of the following:
- Product Sourcing
- Listing creation
- Order fulfillment
- Customer service
Another option is to dropship through an eCommerce platform like Amazon, eBay, or Shopify. This option is less work than running your online store, but you’ll have less control over your brand.
The best way to decide which option is right for you is to experiment with both and see which one you prefer.
Pros of Amazon Dropshipping
You have more control. You may create a favorable selling environment for sales of your items and, more significantly, add value to your consumers by operating an online store on your own. You can alter the appearance and layout of the site, as well as develop custom product pages tailored to provide the most incredible information about the goods to your customers.
Simple to set up. Shopify makes it simple to launch your eCommerce store. Choose a theme from hundreds of options, make any modifications you want, add your items, and connect a payment solution and you’re ready to go. Depending on the sort of online shop you want to launch, all of this can be completed in one day.
If you sell on eBay or Amazon, having a mobile-friendly website will save you time and effort in the long run. Search traffic is more difficult to find than ever before. The issue of low search engine rankings has been around for a long time; it’s just that Google hasn’t known how serious it is until recently. Google often penalizes low-ranking sites with lower page rank and landing page quality scores as well as reduced organic traffic. In short, if your site isn’t mobile-friendly now, it will be soon because so many consumers buy online regularly using their phones.
You can now manage your entire business from your smartphone with the Shopify App. This particularly appeals to dropshipping entrepreneurs who want to run their company while on vacation or on the beach.
There are no fees from a third party. You won’t have to pay 10% to 15% of each sale to eBay or Amazon, which will significantly increase your profit margins. You’ll make more money by launching your dropshipping business with an internet store.
You also get to choose between a wide range of shipping carriers. When you operate a dropshipping business on your own, you can develop connections with several wholesalers using platforms like AliExpress and Alibaba. If waiting for prolonged delivery times puts you off, look for vendors that use ePacket shipping to speed up the process and have your items delivered to customers faster.
There are many ways to get traffic for your website. You’ll have to produce traffic through your site’s marketing, social media, SEO, and paid advertising. There’s more cost involved, either money or time spent, and you’ll need to be prepared to invest in a long-term strategy to advertise your new business.