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What is Amazon Dropshipping?

Amazon Dropshipping is a business model that allows merchants to list products without maintaining inventory.

After an order has been placed, the merchant purchases the product from a third party supplier who then ships it to the customer.

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Is it legal to dropship on Amazon?

Amazon does allow dropshipping on their platform, as long as the merchants follow a few rules.

Always remember:

Register your products as sellers
Indicate that you are the seller on all packing slips, and any other information provided or included in connection with your products
You are responsible for the return of products by customers
Complying with the terms of your Seller Agreement applicable Amazon policies

Examples that dropshipping is not allowed:

Purchase products from an online retailer, and have that retailer ship the product directly to customers.
Orders with packing slips or invoices that indicate a different seller’s name or contact details.

Read more about dropshipping with Amazon at its website .

What is the cost of dropshipping on Amazon?

Amazon Dropshipping requires that everyone sign up on the website as a seller. The Individual plan is 99C/per unit sold. However, the Professional plan is $39.99 regardless of how many products you sell.

Dropshipping fees on Amazon vary depending on the product, but they are usually between 8% and 15%. It may not be possible for those with margins that are relatively low.

Find out more about Amazon commission fees

Is Amazon dropshipping profitable?

It is possible. Dropshippers sell their products with a margin of 10% to 30%. Dropshipping via Amazon will reduce their revenue by around 15%.

If you sell at a margin of 30%, your net profit after selling on Amazon is 15%. This is a good deal, especially considering the large audience you can reach.

Note that your Amazon dropshipping margins could be higher if the Buy Box is won, but this is a highly competitive area and it shouldn’t be the focus of your efforts at first.

Pros and cons of Amazon dropshipping

This part of our guide will teach you about the advantages and disadvantages of operating an Amazon dropshipping business.

No Warehouse Cost

Dropshipping on Amazon is a great way to save money. You don’t have to pay the costs of a warehousespan size=”font weight: 400 ;”>. Some Amazon sellers decide to have their products FBA-fulfilled by Amazon. FBA allows sellers to ship their products directly to Amazon, and Amazon will then send them out.

Vetted dropshipping suppliers

Amazon buys in bulk from European suppliers. Amazon has strict quality standards for suppliers. Products must be durable, authentic, and safe. Amazon will only accept their products if they meet Amazon’s strict quality checks. This ensures that new sellers only offer the best of their products.

Large audience base

Amazon boasts <a href="https://amzscout.net/blog/amazon-statistics/#:~:text=Number%20of%20Amazon%20Users&text=It%20is%20estimated%20that%20the,on%20this%20in%20a%20bit). More than 310 millions active users are estimated to be in the world. Amazon can be a great sales channel for your company. You could get a flood of new customers if you offer the right product and price.

A bonus? This is a great way to expand your audience. Your target audience is widened. You may even discover a whole new market segment that is eager to buy what you have to offer.

Target multiple categories

Amazon offers more than 30 categories that you can choose from. You can choose to sell in as few as two niches, as many as five or as many as you want. You can sell in as many categories or niches as you want with the right products from reliable suppliers.

You can, for example, sell products simultaneously in Electronics and Tools and Home Improvement. You can serve multiple audiences.

The Cons of Amazon Dropshipping

Dropshipping can be attractive because of the low marketing costs, and greater discoverability. You should weigh the advantages and disadvantages of dropshipping. Amazon dropshipping has three major disadvantages:

Visible sales data

You must provide Amazon with your sales data in order to be able to sell. It can therefore see your entire sales history, from the bestselling products you sell to how well they are selling. Amazon has been rumored to use such insights in order to beat out its competitors.

Fewer branding opportunities

How do you make your customers loyal to Amazon’s brand? It’s hard. Amazon’s primary goal is to assist merchants in selling products, and not to build brand loyalties. You may find it difficult to build a brand, display your products and speak to customers.

Limited Customization

Dropshipping in general, including Amazon, has another drawback: the dependence on external packaging. The packaging of the supplier can be a hindrance to a personal brand experience. Private labeling may seem like an affordable solution but it will only increase the costs.

Difference between Amazon Dropshipping and Retail Arbitrage

Dropshipping on Amazon is when you work with a supplier that ships directly to the customer. Retail arbitrage is when you purchase discounted products and store them. Then you resell them at higher prices. Dropshipping is a way to avoid inventory issues, but retail arbitrage is about finding and reselling deals.

How to dropship on Amazon: An 8-step checklist

1. Select an ecommerce platform

Shopify is the best ecommerce platform to use, as it integrates directly with Amazon. Shopify lets users create an online shop and integrate Amazon as a channel for sales, simplifying the order management between both platforms.

2. Select the right product

Store owners who wish to sell on Amazon face several restrictions and requirements.

According Amazon’s list, you can open an Amazon store even without approval if your niche is in books, computers and video games. Electronics, office supplies, and so on.

Check Amazon’s restricted product list to ensure you are not selling anything on it. This list includes items like hoverboards or dangerous goods.

3. Create an Amazon Seller Account

It’s better to open a professional account if you intend on selling large volumes of products. You’re charged 99C/per item sold in the individual selling plan. This can reduce your profit margins. You pay a monthly subscription and a few extra fees for a professional seller account.

To register an account, visit sellercentral.amazon.com. Fill out all the information Amazon needs about your business.

Professional Email Address
Phone Number
Government Identification
Tax information
International Credit Card
Bank Account for Receiving Payments

4. Approve your product category

You need Amazon’s permission to sell certain items. If you wish to sell music, watches, or collectibles you will need permission. Learn more by checking out the categories of products.

Even if the category is open for business, some products may still require a green signal. Browse this list, and then select “Show Limitations” to check an item. ”

5. Shopify allows you to connect your Amazon account.

Link your Amazon account to your Shopify ecommerce site after you’ve set up your Amazon Account and secured the necessary approvals. How? Shopify App Store offers an Amazon Integration App.

These apps are the link between Amazon and Shopify. You can:

Automated orders
Track customers in real time
Maintain product inventory in sync

The best Amazon fulfillment apps on Shopify include:

After installing your app, you can easily create product listings on both platforms and manage sales.

6. Create an Amazon Product Listing

Dropshipping products won’t appear on Amazon until you integrate the app. Shopify offers three options to streamline Amazon dropshipping.

Integrate Shopify with your Amazon listings using the integration app.
Link an Amazon listing to your product.
Create an Amazon listing for a brand-new item .

You may not be able create multiple product listings immediately if you are a dropshipper new to Amazon. The reason for this is that Amazon has a limit on how many new listings you can post each week. As your sales increase, Amazon will raise the cap.

7. Track your inventory with Shopify

Shopify should track your inventory. It will ensure that the product is available when customers order on Amazon.

Do not allow customers to place orders for products that aren’t in stock. This can result in negative reviews, and extra time spent on customer service.

8. Promote your Amazon products

Amazon has limitations when it comes to promoting your product. There are still ways to stand out.

Do you have some marketing budget? Consider using Sponsored Product Ads. Amazon charges you if someone clicks on your ad. This will help you reach more people.
Amazon products are all the same. Make your listings stand out. Use clear images and good titles for your products. In the About This item section, write simple details. Customers will quickly scan many products.
Share Amazon links via social media. Create a video for Instagram. Create a TikTok with your item.

How do you choose a dropshipping provider

The right dropshipping provider can give you a competitive edge on Amazon. The right supplier partnership will help you stand out. You can compete with price but the right partner is what makes a difference. Prioritize the following:

Location Your supplier should be able to support Amazon Dropshipping in your area.
Product Quality They should offer you products that are at least as good, if they’re not better, than your competitors.
Be aware of the fees per order. Your profits shouldn’t be affected too much.
Dashboards that provide information : A dropshipping dashboard provides valuable insights into the sales and order value.
Reputation : If successful dropshippers have faith in them, it’s a positive sign.
Shipping efficiency Your supplier should keep up with the typical shipping times for your niche.

Bonus Strategies for Success on Amazon

This part of our Amazon dropshipping guide will teach you a few tips and tricks for success on Amazon.

Win the Buy Box

The Buy Box is where Amazon makes the majority of its sales. Dropshippers should aim to get the Buy Box in order to maximize their sales.

You’ll first need a high seller score. Most people find that a rating of over 95% is ideal for them.

You need to get your products out quickly. Ideally, within 14 days.

Third, you should have a lower cost (shipping cost and total product cost) than the majority of other offers. A low refund rate, a quick customer response and a high feedback score will also help you to win the Buy Box.

Do not rely on Amazon HTML0

Do not rely solely on Amazon. Also, explore other platforms. Amazon is one of the many channels you can use to increase your chances for sales and minimize risk.

Shopify allows you to add additional sales channels such as Instagram Messenger, Facebook Shops, and Facebook Shops in order to expand your brand’s audience.

You should also note that customers who recognize your brand are more likely to purchase from you via Amazon. Be where your clients are.

Aim to achieve a seller rating of 95%

A seller rating of 95% or more has increased the chances that you will win the Buy Box. This is also good because you’re more likely to show up in organic search results.

A high seller rating is important, as it gives you a big boost in gaining the trust of potential customers. This gives you an advantage over other Amazon stores with lower ratings.

Keyword research

When you learn how to dropship Amazon, you can optimize the Amazon product pages just as you would your store’s pages for search engines.

Keyword.io is a great tool to use for finding popular keywords. You can also use Amazon ads to find keywords to optimize product pages.

This will improve your organic ranking. You can better target your customers if you run ads.

Be sure to price your products appropriately

There are several factors to take into consideration when pricing products on Amazon. The first thing to consider is the price of Amazon’s fees. Make sure that your margins will allow you to afford Amazon’s monthly fees and any other associated costs.

Better coupon discounts than the competition

Create an Amazon coupon to encourage your customers to purchase from you. Promoting the coupon on coupon sites can increase traffic.

Remember that the coupon price must be set so that it allows you to cover your costs and still remain profitable.

Optimize your product titles for user intent

Amazon prefers listings that are relevant to the buyer’s search term, instead of being stuffed full of keywords.

Titles that are focused on the user’s intent will grab people’s attention. It’s important to spend some time considering what users are looking for when they search for your product.

The information that buyers care about includes product attributes like model, size and color.

The best Amazon dropshipping tools

This list will be useful when you are learning about dropshipping.

MerchantWords

MerchantWords allows you to see the data and search volume of keywords. The pro plan is $30 per month.

WebFeedCheck

You can view all of your product reviews on one page with FeedCheck. This is a useful tool if your store has a lot of Amazon products. Pricing starts at just $19 per monthly.

Sellery

This tool will help you to win the Amazon Buy Box. You can run price experiments to maximize profits while staying competitive. This one is free to try.

FeedbackExpress

FeedbackExpress can help you increase the number of reviews in your Amazon store. It can also help remove negative reviews, so that you maintain a high rating for your store and products. Pricing starts at just $20 per month.

Dropshipping Amazon to eBay

Dropshipping is the practice of buying items at a lower price from Amazon and then selling them on eBay for a higher cost.

There’s one catch, however: the end-user, who purchases the item on eBay, will often receive the item in Amazon packaging. This can cause confusion or lead to dissatisfaction.

Although this method is not illegal, manufacturers don’t like it. Dropshippers are not happy with it, as they increase their profit without manufacturers knowing.

If you want to create a dropshipping company that is reputable, it’s better to avoid this method.

Dropshipping through your online store

Dropshipping Amazon items through your own online shop is a great alternative to using third-party marketplaces. It allows you to have more control over your customer service and marketing, and can lead to long-term success.

Dropshipping: Benefits for your online store

You can control the environment of your store. Customize the layout, design and product pages so that they resonate with your target market.
Design that is easy to use: Platforms such as Shopify eliminate technical obstacles, making it possible for anyone to create a store. You can also quickly add features that improve the buyer’s experience.
Cost efficiency: Avoid Amazon’s referral fee by owning your platform and boosting your profits.
Mobile optimization is important. Navigating mobile marketplaces can be difficult. Hosted ecommerce platforms, on the other hand, ensure that your store is responsive to all devices.
Building a brand: Owning an independent shop allows you to cultivate your own unique brand, encouraging customer loyalty and repeat business.
You can expand your options with your platform. This allows you to include giants such as AliExpress and AliBaba. ePackets and other strategies can help streamline the delivery of products, improving customer satisfaction.

Are you still unsure if it’s better to dropship through Amazon’s Marketplace or your own shop? This video will help you to make an informed decision.

How to get started with Amazon Dropshipping

Amazon dropshipping is a promising business model for both new and experienced entrepreneurs. Shopify can be used as a control center to help you with sourcing, marketing, fulfillment and pricing. You can use these tools and strategies to streamline the Amazon dropshipping process. Be sure to check out top automated dropshipping software.

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Author: Nicole Martins Ferreira

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