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Are you looking for a guide on how to start dropshipping on Amazon? Dropshipping is an eCommerce store that does not require huge startup capital.
Besides Amazon, you can also run a dropshipping store on eBay. What you need to start is a computer, a website, and the products to sell. However, identifying the products is not always that easy.
So, if you’re in for a dropshipping business on Amazon, there’s a lot you need to know beforehand. Lucky for you, that’s why we have this guide. We’ll take through how to go about dropshipping and how to make a profit from it. It’s time to roll up your sleeves.
So, let’s get started!
What Is Dropshipping?
Dropshipping is an online business that does not require an inventory or startup free to begin selling. Instead, the drop shipper identifies the products to sell and markets them online to attract buyers.
Dropshipping is easy to start and manage as compared to having a physical store. However, for a beginner, you may consider starting small before you finally get the hack of it.
That is, start by selling a single product before you proceed to add more products to your online store. Amazon is the leading online eCommerce store, and it allows dropshipping. As of 2020, it had a net sale of 386 billion US dollars.
With dropshipping, the drop shipper is the link between the supplier and the customer. Here’s an example. You list a vacuum cleaner at $400 on your online store, while the supplier sells it at a wholesale price of $350. The customer views the product and places an order for it.
As the drop shipper, you forward the product description and customer information to the supplier. On the other side, the supplier accepts the order and ships it to the buyer.
How To Dropship On Amazon
As earlier mentioned, Amazon allows dropshipping. It is easier to identify the products to sell from the millions of products listed in the online store.
However, before you get started, you need to go through Amazon’s policy, or otherwise, they may end up withholding your store. Below are the guidelines from the Amazon dropshipping policy for all drop shippers:
- You have to be the record seller of your products.
- Identify yourself as the product’s seller. That is on all packing slips and other information in connection with products.
- Eliminate any information that recognizes a third-party drop shipper before you ship the order.
- You are responsible for accepting and processing product returns.
- Observe the seller agreement terms and other policies applicable on Amazon.
Pros And Cons Of Amazon Dropshipping
With dropshipping, the client does not have to know that the product does not ship directly from your shop. It is a form of eCommerce selling that varies from a physical store.
However, there are benefits and drawbacks of running this type of eCommerce store. As you plan on running a dropshipping store, here what you need to know:
- You do not need a product inventory. Unlike other stores where you need a warehouse to store the products, dropshipping is the complete opposite. You list the products, but you do not have contact with them.
- Dropshipping is profitable. On your eCommerce store, you list the products at a higher selling price different from the supplier/ Amazon.
- Amazon eCommerce store has millions of products to drop ship. With the right software, it is easy for you to identify profitable products to start selling.
- Amazon drop shipping is scalable. With so many product categories, you can sell products from various niches.
- Increased visibility. Since Amazon is the largest eCommerce platform, you can easily attract potential buyers to your store. It is also easy to discover product suppliers to collaborate with.
However, despite the benefits that come with Amazon dropshipping, there are also a few drawbacks. These are:
- For a beginner, it can be time-consuming to identify suppliers. Therefore, this may take you a long time to get started with the business.
- Competition from other drop shippers. With the digital revolution, most sellers are using online platforms to market products.
- The suppliers can take time to deliver a product and thereby affect the credibility of the business. In addition, the supplier may also ship the product to the wrong shipping address.
- Amazon can withhold your dropshipping store if you do not uphold the policies put in place.
Is Amazon Dropshipping Profitable
If you’re reluctant to start a dropshipping business on Amazon, it is very profitable. First, you do not need a warehouse to store the products or a shipping plan to deliver the products.
Amazon takes 15% of your dropshipping revenue. To make the best from your store, consider selling on-demand products.
How To Start Selling With Amazon Dropshipping
1. Identify products to sell
The initial step for any drop shipper is to identify products to sell. You may need to start with a single product before you proceed to multiple items.
2. Select an Ecommerce platform
It is easier to set up an online store without the technical web design experience. The most popular eCommerce store builder is Shopify.
3. Set up a seller account on Amazon
Source: Amazon Seller Central
Since you’re dropshipping on Amazon, you need to have an Amazon seller account. To begin selling, set up your account profile on Amazon Seller Central and add details about your business.
A professional account comes with a monthly subscription fee. As you list your products to sell, you need to have competitive prices to earn a profit.
4. Request the approval of your product listing
Amazon requires you to get product approval for various products. Examples of restricted products are beauty, fashion, food & beverage, gambling & lottery, and jewelry.
5. Connect Amazon to your Shopify account
Once Amazon approves your account, you need to connect it to your Shopify account. Here’s how to go about it. On your Shopify profile, scroll down to the sales channel section. Click to select the add ‘+’ button.
From the pop-up, select Amazon and click add channel. Finally, click connect to Amazon to complete the process.
6. Create product listing on Amazon
After connecting your Amazon account to Shopify, the products do not automatically appear on your listing. Import the products to your Shopify eCommerce store.
Besides, if you do not have as many products, you can manually add each. Click on create listings from your Shopify store. Next, click on select product. From the available options, select this product is made by another brand. The reason being, you have a dropshipping account.
7. Keep track and promote your products
One of the reasons why drop shippers fail in the dropshipping business is the failure to keep track. That is, a client places an order for an item, but it is out of stock.
As the drop shipper, you need to keep track and check if the listed products are available from the suppliers. If they are not in stock, make sure you update the product details accordingly.
In addition, promote your products to attract potential buyers. Remember, dropshipping is a competitive business. You have to be on top of your competition and attract as many buyers as you can.
Amazon Dropshipping Tips
With the information above, you can now start Amazon dropshipping. However, this is an initial step to setting up your dropshipping profile.
1. Optimize the product information for SEO
While running your dropshipping store on Amazon may be a bonus, you have to invest in SEO. Make sure that you research words or phrases that prospects use when looking for products.
2. Win the Amazon’s Buy Box
Amazon’s buy box contributes to over 80% of the sales on the platform. As a drop shipper, if you manage to win the buy box, it can increase profit to your business.
3. Have more product reviews
One of the reasons why you should have product reviews is to earn credibility. A review is one of the factors a buyer will consider before buying a product.
However, they need to be positive. To get a review, you can follow up on a customer and request them to leave feedback on the product. In case a client leaves a negative review, you can engage them to resolve the issue.
4. Promote your Amazon Dropshipping Store
As earlier mentioned, promoting your dropshipping store is necessary to drive traffic and increase conversion. There are multiple techniques to use to advertise your products online.
You can use paid promotions like Google ads and Facebook ads. Also, you may consider using an influencer who may have information about a product within your store.
5. Improve Customer Experience
Customer experience is crucial to the retention and conversion of clients to a business. So, how do you improve customer experience?
First, make sure that your dropshipping store is accessible from all devices. That is, it should be mobile responsive. Most shoppers make online purchases using their mobile devices.
Dropshipping on Amazon FBA
FBA is an abbreviation for Fulfillment by Amazon. It means that Amazon handles the packing, shipping, storing, exchange, and returns on your behalf.
The Fulfillment by Amazon improves your possibilities of winning the buy box. However, the FBA service is not free. The cost depends on the business, shipping, and the size of the operation.
Is Amazon Dropshipping Worth It?
If you want to start an eCommerce store with limited resources, Amazon dropshipping is worth considering. It does not require startup costs and is easy to manage.
However, to run a dropshipping store, you need to work with reliable suppliers and profitable products. It is time-consuming, but using software can ease the burden for you.
Designing a Shopify store is easy. With Shopify, you can create your Amazon dropshipping store within minutes. With this guide, you can successfully run an Amazon dropshipping store and start selling.