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As online shopping continues to boom, more people shift to starting online businesses. Amazon dropshipping is ramped up from this. According to Statista, a total of over 80 percent of consumers globally shopped online in 2021. Among them, the Amazon marketplace reached a total GMV of US$612 billion in 2021.
Amazon dropshipping is undoubtedly a low barrier to entry into an online business, but not everyone has enough understood of it. So this post will walk you through all information you need to start dropshipping on Amazon step-by-step.
What we cover
What Is Amazon Dropshipping?
Dropshipping is a business model to sell online without pre-invest and inventory needed. You can push the product to your Amazon store from a supplier directly. When your customers have placed an order, the order will syn to your supplier platform and be fulfilled by them. A professional dropshipping supplier will handle and ship the item to your customer in one stop.
First, you need a verified Amazon seller account and then integrate it with a third-party supplier. After that, you can launch an Amazon dropshipping business whenever. It would not be much trouble if you are familiar with Amazon seller policy and find a reliable third-party supplier to support you. Then you just need to consider how to promote your product and make money.
Does Amazon Allow Dropshipping?
Generally, Amazon dropshipping is allowed as long as it is clear to the customer that you are the seller of record.
If you intend to fulfill orders using a drop shipper or third-party logistic, you must always:
- Have an agreement with your supplier that they will identify you (and no one else) As a seller of your products on all packing slips, invoices, external packaging, and other information included or provided in connection with the products;
- Remove any packing slips, invoices, external packaging, or other information identifying a third-party drop shipper before shipping the order;
- Be responsible for accepting and processing customer returns of your products ;
- Comply with all other terms of your seller agreement and applicable Amazon policies.
If you do not obey the above rules, then using Amazon’s Merchant Fulfilled Network may be restricted because of policy violations. For more details, you can check the Amazon seller dropshipping policy.
How To Start Dropshipping on Amazon?
There are two ways you can work your Amazon dropshipping business.
Way#01. Opening an Amazon store and dropshipping items to it.
It is a universal model to dropship on Amazon. In a nutshell, it requests you connect your Amazon seller account with the third-party dropshipping supplier with whom you want to cooperate. Want to know the detailed guide? Please keep reading the following steps:
1. Create an Amazon seller account
You can check Amazon Beginner’s Guide to find out what you need to pre-prepare. Before you create an Amazon seller account, it is better if you have some preliminary knowledge.
2. Find a target niche and product
After you open an Amazon store, you need to find a dropshipping niche and product you prefer to sell online. Focus on one specific product can provide you with a goal and save your energy. It can make you avoid losing in the torrent of products that make-or-break thousands.
3. Find an Amazon dropshipping supplier
An outstanding distributor for Amazon business allows you to do more with less. After you have integrated your Amazon store with a third-party supplier, they will syn the orders and items to your Amazon store. With one-stop order fulfillment and shipping service, you can pay more attention to product marketing.
4. Create an Amazon listing
All preparation has been done. You can start to choose a product from your supplier and create an Amazon listing for your store.
Way#02. Opening an independent dropshipping store and importing the items from Amazon.
If you already have a dropshipping store and want to sell Amazon best selling products. You can find a supplier which supports importing Amazon listings to your online store. It is not necessary to create an Amazon seller account in this Amazon dropshipping model.
How to Find Products to Sell on Amazon?
A private label product can be more trustworthy and profitable; A direct-source product can support a more competitive price. Finding the right product to dropship on Amazon can boost your sale easier.
What products can you dropship on Amazon?
When you start to find a product sold online, you can refer to the below point:
- Customers: Who is your target audiences? Can you fill a missing need in a specific market? Can you join aboard a niche with highly engaged customers? Deciding on a target niche and searching for trending products in this market will save more time.
- Product Cost: How much does the product usually cost? Is there a more profitable one? You can look for items that aren’t too big and expensive, but not so cheap that it is hard to make a profit.
- Shipping: Are these products great for shipping? If the product is too heavy, it will spend too much shipping fees. You don’t want to see your shipping cost over your product cost.
- Product competition: Same as cost for items, you should find a balance in the competitive market. You will not want to be involved in a highly competitive product or category. However, you also don’t want to start selling a product that no one is interested.
Tips to find a trending product
1. Use a keyword research tool
It not only tells you which related words are hot searching but also displays how many searches a term receives on Amazon. Like ahrefs, you can get the data hassle-free on the specific network through it.
The search volume, the demand higher. When you start Amazon dropshipping, a keyword research tool can give you a better idea of its demand on the platform.
2. Dig into Amazon “best sellers” pages or other Marketplaces
It is the easier way you can choose a winning product. When you go to the “best sellers” pages, it will show you the hot-selling products on Amazon.
Choose a category you are interested in, and find the product. Also, you can pay attention to other famous eCommerce marketplaces, Alibaba and eBay, to see what products sell well on their platform.
3. Focus on Social Media Trends
Nowadays, social media has infiltrated our daily life. And it has become another online marketplace that people care about.
You can focus on the social media trend and dropship a trending product on Amazon. Such as, you can use Instagram, TikTok or Pinterest hashtags to do it.
4. Use Google Trends
Google Trends is a popular research tool. You can use it to identify what ideal items can sell on Amazon.
Researching trending topics on Google can help narrow your selection of products when you do Amazon dropshipping business.
Best Amazon Dropshipping Software
1. EPROLO – all-around supply chain for the dropshipper
As a one-stop dropshipping supplier, EPROLO aims to provide professional services to not only Amazon drop shippers but also all e-commerce sellers.
No matter whether FBA or FBM you have chosen, it can handle your Amazon orders end to end as a third-party supplier. For more details, you can check the EPROLO Amazon page.
In addition, to meet the development of online business, EPROLO provides various services involving print-on-demand, branding, warehousing fulfillment, third-party logistic, etc. You can get the most comprehensive support for your global Amazon business.
2. Hustle Got Real
Cooperating with 100+ dropshipping suppliers, Hustle Got Real makes newbies dropship top-selling products on Amazon more convenient.
It provides lots of user-friendly functions to help people sell on Amazon handy-free. Such as price and stick monitoring, automatic orders, bulk lister, etc.
SkuGrid, a listing and inventory tool, tracks and reprices your products from 600+ trusted suppliers and on 10+ integrated marketplaces.
Its newbie plan costs $14.99/month to monitor and update 200 items, which is perfect for those looking to drop ship on the Amazon platform on a budget.
4. Jungle Scout suppliers database
Jungle Scout suppliers database, the first-of-its-kind feature among Amazon selling tools, allows you to find verified suppliers worldwide. It supports searching by Amazon’s ASIN which can identify the exact supplier of any product on Amazon in seconds.
5. Helium 10
Helium 10 is one of the best all-in-one software for Amazon dropshippers. It can help you search for a product supplier with its robust 450million ASIN database. And also manage your business effortlessly with an alert, update, and monitoring of your products, seller account, and markets.
Tips for Success When Dropshipping on Amazon
1. Don’t obsess with the product price.
There is universal cognition that a competitive price can make you stand out from your competitor. But it is not the only thing to attract customers.
Set yourself apart in other ways, such as compelling product titles or images, trustworthy customer reviews, and great discounts. Do not let the price limit your dropshipping on Amazon.
2. Choose the right product when selling on Amazon
Generally, many sellers will follow the trend when a product is booming. But it is also a suitable time to dropship products that other businesses are not selling to stand out from the competition.
Dropshipping allows you to sell a product without MOQ limits, so trying and testing to sell different items would not be more difficult as no inventory worry.
On the other hand, you can dropship the products you are very familiar with, so that you are able to display the unique items highlighted to attract customers.
Focusing on merchandise that is always useful and in high demand or trying to dropship with unobtrusive, non-traditional products to sell on Amazon. You also can diversify your product and target different audiences.
3. Try various pricing way
A different pricing way can make your products look more profitable. Such you can provide bundling products to improve your profit margins. Or experiment with sundry shipping rates to set the optimal price.
4. Optimize listing to get maximum visibility
A listing with an attractive title, image, and product description can benefit your Amazon selling too. It decides whether your product is suitable for the customer’s search intent.
If you have a clear target audience, a solid marketing strategy, and a favorable price, then you have a good chance of being seen. And please make sure that you sell the services and solutions to the customer, not the product itself.
Pros and Cons of Amazon Dropshipping
Pros of dropshipping on Amazon
1. You don’t need to rent a warehousing when you dropship on Amazon, because there is no MOQ limit on the dropshipping business model.
2. You can focus on product marketing and store operations, as all orders will be fulfilled automatically by a third-party Amazon supplier.
3. You can scale your dropshipping niche on Amazon whenever you want because no inventory is required.
4. Amazon dropshipping business is easy to start as long as you have an Amazon seller account and a reliable dropshipping supplier.
5. Amazon is one of the hugest marketplaces to sell online. You can find more potential target audiences.
Cons of dropshipping on Amazon
1. The delivery time has no guarantee. As the third party has different processing and shipping times, you can not ensure the exact arrival time.
2. You could not build a long-term customer relationship because of the instability of the Amazon dropshipping seller account.
3. You can scale your dropshipping niche on Amazon whenever you want because no inventory is required.
3. Communication will be more difficult. If a customer has any shipping or product problem, you need to check with the supplier first. If there is jet lag, it may cost a long time to solve your customer’s problem.
Dropshipping From Amazon to eBay
With the popularity of Amazon dropshipping, many drop shippers started dropship from Amazon on eBay to make a high profit. They look for eBay’s hot-selling products and match from Amazon at best and lower prices. And sell the product on eBay with a high margin.
Once the customers have placed an order on eBay, it is ordered from an Amazon supplier. This business model is also called online arbitrage. Though it is a lucrative method to make money online, it has violated eBay’s dropshipping policy. You can integrate with and fulfill orders directly to a dropshipping supplier.
However, listing an item on eBay and then purchasing it from another marketplace (like Amazon) for direct shipping to customers is not allowed.
What’s more, the customers will receive an Amazon package if you order from the Amazon marketplace. In this case, they will realize this is a scam and feel unhappy as they could have gotten a lower price on Amazon. Poor customer experience leads to bad reviews.
So even if it is an easy and profitable way to do Amazon drop shipping, you shouldn’t join this if you want a long-term and stable online business.
FAQ to Amazon Dropshipping Business
Q1: Is Amazon dropshipping profitable?
Of course, it is. Amazon’s marketplace business is becoming increasingly significant in the global marketplace. And its value has grown by 16% from 2020 to 2021.
According to statistics, the average Amazon drop shipping profit is between 10% to 35%. Amazon platform takes about 15% off your top-line revenue.
For example, if you set up a 30% margin to sell online, you still can receive a profit of 15% through Amazon store dropshipping.
Q2: Is Amazon FBA dropshipping?
Amazon FBA is “Fulfillment by Amazon.” This service offers warehousing and shipping for your products. Amazon will pack and ship the products to your customers from their warehouse when a customer buys from your Amazon store.
The big difference between Amazon FBA and dropshipping is that with FBA, you already have inventory and Amazon’s fulfillment center will handle your package. It can guarantee delivery time.
If you have branding or hot selling products and want to keep a bulk inventory on the Amazon FBA fulfillment center. You can use third-party fulfillment companies like EPROLO to label and ship the items to the Amazon warehouses.
Q3: What to do if your amazon dropshipping account lock?
Sometimes, your amazon dropshipping account has been locked because you may violate the Amazon policy for some reason. If you want to recover your seller account, you can contact Amazon customer service first to solve this problem. For more detailed methods, please check this post: how to fix it if your Amazon account is locked?