Searching for a way to become a seller on Amazon without investing a lot of money? Then dropshipping on Amazon is the best business idea for you. This unique business model is ideal for budding entrepreneurs who do not want to make a huge investment. Another advantage of dropshipping is that you will have plenty of time to focus on promotion and marketing. But how to start dropshipping on Amazon? Let’s find out everything about this interesting ecommerce solution!
Is Dropshipping Different from Other Selling Methods on Amazon?
One of the many methods of using Amazon for business is by starting a dropshipping business. You must have heard of other lucrative Amazon business options like retail arbitrage, private label, wholesale, etc. Scroll down to get some idea about these Amazon selling techniques.
- Wholesaling involves purchasing goods from a wholesaler at a bulk rate. Then you can resell those items to some other retailer or become a retailer yourself.
- Arbitrage is if someone buys discounted goods from different retail stores and then resells them by becoming a reputable dropshipping person on Amazon.
- Private label is another manufacturing method in which you can manufacture products that you will be selling on Amazon.
However, the advantages of dropshipping on places like Amazon are more compared to private label and wholesaling and that's what this Amazon dropshipping guide is all about.
Amazon FBA vs Dropshipping
Fulfillment by Amazon or Amazon FBA is a fulfilment method that Amazon runs. It deals with storing, packing, and fulfilling orders on behalf of the sellers. Handling customer service is also part of FBA's services.
So, the key difference between dropshipping business on Amazon and FBA is that with the latter, you will be buying inventory and sending it to the fulfillment centers of Amazon. But if you opt for dropshipping, you won't have to purchase inventory.
One advantage of FBA is that it gives a Prime badge to sellers, and this influences the purchase decisions of consumers. If a listing has the Prime badge, buyers find it easy to trust the seller.
Pros of Amazon Dropshipping
The reasons why dropshipping will be profitable for you are:
- Startup costs are low: Other good e-commerce methods such as wholesaling, dropshipping is simple. As a drop shipper, you won’t have to own any inventory. When a customer pays you for an item, you will use a percentage of the money to buy the product from your supplier and they will ship the product to the consumer. So, for someone with limited money, this is an affordable business idea.
- Zero storage fees: While the dropshipping fees vary by product, there is no storage expense. That’s because your supplier will be shipping out orders directly and you only have to pay FBA.
- Quick to set up: As you won’t have to set up and maintain an inventory, setting up a dropshipping business won’t be a challenging or time-consuming task. The goods are already ready to be shipped and the manufacturers are waiting for people like you. So, your job is only to sell them on Amazon.
- Automatic business: Searching for home-based businesses so that you can work from the comfort of your home? There are many plugins, dropshipping tools, and software online through which you can completely automate a dropshipping business on Amazon.
- It is legal: Another perk of being a drop shipper is that it is a legitimate business and Amazon has a flexible policy for dropshippers. Amazon allows and encourages emerging drop shippers like you to fulfill their dream of becoming a businessperson. You just need to be mindful of the dropshipping guidelines and you can operate the business smoothly.
- Researching is easy: If you are thinking of scaling your Amazon dropshipping business. You can reply on online tools to learn how other sellers like you are running their businesses and which products are performing well.
How to Start Dropshipping on Amazon?
Now that you understand the basics of dropshipping on Amazon, here’s everything you need to know about dropshipping setup for Amazon to get started.
1. Set up a seller account on Amazon
To sell products on Amazon or do dropshipping on Amazon, the first step is simple, and it involves Amazon seller account setup. You have to visit sellercentral.amazon.com where you can create one of these two types of seller accounts: professional and individual. While setting up an Amazon seller account, you have to enter details like fulfillment method, Dropshipping Model, etc.
2. Find a low-competition, high-demand product
Now comes the fun part which is deciding what you are going to sell on Amazon to generate excellent sales. You can take the help of tools such as ‘Opportunity Finder’ to explore low-competition yet high-on-demand product opportunities. These are the metrics you should take note of when in the quest for profitable dropshipping niches on Amazon:
- Sales between 100 and 300 units per month
- Competition: very low
- monthly price: $20- $70
- Niche score: 7+
Searching after applying the above-mentioned criteria will show you a list of exciting products from various categories. You should keep another thing is mind when choosing the best products to sell and that’s their maintenance costs.
3. Get in touch with dropshipping suppliers
As a dropshipper, you won’t be manufacturing the products but purchasing them from a manufacturer or supplier. So, once you have the product ideas, it is time to look for a reliable supplier. There are amazing business-to-business sites where entrepreneurs can connect with suppliers already waiting to dropship goods. You can also find local suppliers as then, the delivery will be quick. Before finalizing a supplier, you should always check the shipping cost and the product price.
4. Create a listing on Amazon
Once you have a product idea and you’ve found a supplier with whom you’d like to do business, you can go ahead with creating product listings on Amazon. Open your Seller account and you will find the option: Inventory. Click on it and you’ll be able to add a product by selecting ‘Create a new product listing’.
First, choose the category of the product and then fill out the necessary information for your target buyers. Setting the price is another important task and you must remember that you too have a pay a certain amount to Amazon as fees. Amazon takes something from the seller for every single sale of the dropshipped product and the Amazon fees vary by product. So, fix the product’s price after considering this factor. Finally, your listing is ready to be published and viewed by potential customers. As soon as your Amazon product starts selling, you will make money.
Tips to Make Amazon Dropshipping Profitable
While creating a dropshipping business won't be a hassle, how do you make yours stand out? Here are five tips to increase your chances of becoming successful:
- For maximizing sales, you have to drive traffic and make your listings reach more people. So, one of the Amazon SEO tips for dropshippers is to promote their listings. You can promote through email marketing, social media marketing, sponsorship programs, and paid advertisements.
- One of the customer service tips for Amazon dropshippers is to provide fabulous customer service. If customers are satisfied with the overall shopping experience, they will leave positive reviews and reviews are necessary to make a product sellable.
- Although you and your competitors will be selling same kinds of products, you need to try harder to establish a brand identity.
- Never be in a hurry to list products as a newbie as you cannot trust any supplier blindly. First, ask for samples and inspect them minutely to certain they are of good quality.
- Lastly, look forward to casting a wide net. This means, you should not list a single product and wait for it to get a seller. Instead, list multiple eye-catching items.
Amazon Dropshipping Policies 2024
While dropshipping is legal, following the dropshipping policy of Amazon is crucial. So, make sure you adhere to these rules:
- Your identity should be that of a seller on packing slips, invoices, and external packaging.
- You should not include suppliers, manufacturers, or wholesalers in the product descriptions or product packaging.
- You are accountable for accepting as well as processing returns.
- You must comply with the ‘Terms and Services’ of Amazon (as stated on the seller agreement)
- Buying items from online retailers or third-party sellers and getting the product shipped directly to the customer from the retailer is prohibited.
Parting Thoughts
Hopefully, after reading this article, you are excited to start your Amazon business. Remember that it is natural to face challenges at the beginning, but you must not give up. Amazon gives ample opportunities to small and big businesses to sell products to Amazon store. You can visit the Amazon to acquire more details about Amazon product page setup and Amazon dropshipping margins.
So, Happy Selling!
Frequently Asked Questions
Q. What are the initial steps to start dropshipping on Amazon?
To start an Amazon dropshipping business, the initial steps are setting up your Amazon account, deciding what products you will sell at the Amazon store, and finding a trustworthy dropship supplier who will deliver dropshipping products of high quality on time.
Q. How can I select profitable products for Amazon dropshipping?
If you want to dropship profitable products via Amazon buy box, you must sell products that are in demand. So, before you start Amazon dropshipping, choose the best product to sell on Amazon, spend some time researching as it will offer you meaningful insight regarding what products your target audience uses.
