Hey, Today in this article we will discuss Amazon dropshipping. Our previous article discussed “What is Amazon? Its history and timeline”. So if you have not read that article. I’ll recommend you read that before start reading this article.
Are you looking for a quick and simple way to sell goods online? Dropshipping through Amazon is the way to go. You can run an online store using Amazon Dropshipping without holding stock or fulfilling orders yourself. However, In this guide, we will explain how dropshipping on Amazon works, the pros and cons, and how you can get started.
What is Amazon dropshipping?
Let’s look at dropshipping in general before starting Amazon dropshipping. Online retailers who use the dropshipping business model do not hold physical inventories or deliver goods to clients. The seller just serves as an intermediary by sending the manufacturer, supplier, or distributor the details of the buyer’s order. The manufacturer or supplier then delivers products to the buyer.
Dropshipping can either use your online store or third-party websites like Amazon. However for newcomers, we advise Amazon dropshipping.
Exactly why dropship on Amazon?
There are several benefits to dropshipping on Amazon as compared to starting your online store. Firstly, Amazon is the most popular digital marketplace in the entire world. Online sellers alone in the US handle 40% of the eCommerce market. However far does Amazon’s influence extend? The website has 2.45 billion monthly visitors and over 300 million active users.
There’s no way just too much traffic could ever go through your eCommerce site. You can gain from part of that traffic by selling through Amazon without paying as much in SEO and marketing. Amazon has a large and highly engaged customer base. Over 157.4 million people are Registered users. Majority of them start their product research on AMZN, according to eMarketer.
Keeping all of this in mind, there seems to be definitely a sizable amount of sales and profitability potential for Amazon dropshipping.
Additionally, you could now connect your Amazon account to your own Shopify or eCommerce website.
How Amazon Dropshipping Works
Dropshipping on Amazon seems to be the same as dropshipping on any other site. The seller’s advertising of the product for sale on the Amazon marketplace is the only distinction. The seller notifies their dropship supplier of the buyer’s order once a customer makes a purchase. The product is then delivered directly to the client by the supplier.
The supplier is responsible for producing the goods, managing levels of stock, and delivering customer orders. However, on the other hand, the seller supervises the operation of the online store by handling all customer-related activities, like order receipt, order forwarding to the supplier, and customer service.
Does Amazon Allow Dropshipping?
As long as you follow the conditions defined in its dropshipping policy, Amazon permits dropshipping. However, you should follow these guidelines if you want a dropshipping supplier to deliver orders on your behalf:
- You should be the seller on record. You should be identified as the seller on all packing slips, invoices, exterior packaging, and other related documents. No information about the source should be provided.
- Before the order is sent, you should give away any packing slips, invoices, external packaging, or other documentation that names a third-party drop shipper.
- You should accept and handle customer returns.
- Respect the conditions of the seller agreement and any other laws that may be relevant.
The platform explicitly bans dropshipping in the following ways:
- Buying goods from another eCommerce company and having that merchant deliver orders to clients (and the shipment does not identify you as the seller of record).
- such as packing sheets, invoices, outside packaging, or other documents containing the name or contacts of a vendor other than you.
The platform can suspend your account if you don’t follow the guidelines
Can We Use FBA For Amazon Dropshipping?
Many internet resources advise vendors to dropship
Benefits of Dropshipping on Amazon
However, successful selling strategies outside dropshipping include private label and wholesale. With a wholesale business model, you can also buy branded products in large quantities at a lower price from a supplier and resell them online. Especially when compared, private labeling refers to the practice of having things produced under your label or brand by a separate company.
Why then should dropshipping be preferred over private label or wholesale?
1. Low upfront costs
Because you need to buy products in large quantities and maintain stock, private label and wholesale need large startup capital. Because you do not retain any physical inventory or buy products directly from suppliers, dropshipping has pretty low upfront costs. The one and only thing you have to do is signup for an account, which only costs $39.99 if you select the Professional selling account.
With a part of the money received when a customer pays for the product, you purchase it from the supplier and have it delivered to the customer.
2. Fast and easy to start
Starting an Amazon dropshipping business is quick and simple, especially when you don’t need to have inventory. Your requested goods have already been produced and are prepared for dispatch. Therefore, you are freed from having to wait for your goods to be manufactured and delivered to Amazon’s warehouse. The only thing left to do is list your product and make a sale as long as you have a Seller account and a contract with dropship suppliers.
3. Easier product research
Private label and wholesale both demand comprehensive and drawn-out product research. However, while dropshipping, you market manufactured goods that are already on the market. Selecting what to offer is simpler if there is no manufacturing or branding involved. You may also use a great product search tool to see how well products are selling on Amazon, as you will see in a moment.
4. Easier marketing
You may reach a sizable customer base via Amazon dropshipping that your eCommerce store might never be able to. Dozens of people can see your products, which could lead to large revenue. Additionally, you are selling products with already known brands. Thus, marketing and selling your stuff will not need much of your time. You may easily increase traffic and sales with optimized product listings and pay-per-click (PPC) advertisements.
However, advantages cannot exist without drawbacks. So let’s look at a few drawbacks to dropshipping.
The drawbacks of Amazon dropshipping
Below are some of the cons of the dropshipping model:
1. Slow delivery
Payment clearance must be completed before you can forward a customer’s order to the supplier, which might also cause a delay. More importantly, the majority of dropshipped products come from foreign suppliers or manufacturers. This indicates that it could take weeks or even months to deliver goods to the buyer. Furthermore, lengthy shipment periods could result in unfavorable evaluations, which is harmful for business.
2. Lots of opposition
As we can set up dropshipping so quickly and easily, many other sellers use this strategy. However, many other merchants can sell the products that are absolutely like yours. This indicates that competition is tough. However, you must differentiate yourself from others in order to beat the competition, which is difficult considering that you have little authority over product customization. One popular trick that sellers use is low price, but doing so may affect your profit margins.
3. Inadequate quality assurance
Because the products are delivered directly from the supplier to the customer, you cannot verify the quality of the product. Ordering product samples or hiring a third party to carry out physical stock audits are the only options. However, there is a risk that the goods will be damaged during shipping if they are coming from a foreign country, like China.
4. Communication issues
Your company depends on your supplier’s inventory storage even though you don’t own it or keep it on hand. You won’t be able to modify your listing if your supplier has low stock levels or is out of stock on a few products and you aren’t instantly notified. When a consumer places an order, it’s possible that they won’t get their product right away or at all.
Does Amazon Dropshipping Make Sense?
On Amazon, can you drop ship? Yes. There is only one reason that can drive your interest in dropshipping or searched for guides on how to start dropshipping on Amazon, and that’s fine: you want to make money.
However, make sure you have a strong understanding of the potential of profitability before starting any business, including Amazon dropshipping. Finding out how much dropshippers make is the only method to determine the profit potential of the dropshipping model.
How much money do drop shippers make then? About 50% of AMZ’s revenue comes from third-party sellers, and a large fraction of this money is linked to drop shippers. The typical drop shipper earns between $100 and $50,000 a month. However, now is an incredible opportunity to launch your Amazon dropshipping company.
Beginners may find dropshipping difficult, especially since it appears hard to sell on Amazon without having any stock. However, a lot of “dropshipping for beginners guides” tend to focus on the issues impacting while leaving the basics up to the sellers to figure out. As a result, if you searched “How to dropship on Amazon,” you probably won’t find any clear, useful instructions that will guide you through the entire procedure. However, you can find it difficult to negotiate the market if you don’t know how to start dropshipping on Amazon.
Ending Here With
This was a brief overview of Amazon Dropshipping. I hope this article will prove meaningful for you. However, If you like my article. You can share feedback & ask any question in comment section. In our next article we will discuss “What is an Amazon Virtual Assistant?”. You can also read that article. However, if you want to learn about any specific technology. You can request in comment section. We will surely guide you about that technology. Share this article with your friends for also the seek of their acknowledgement.