We’d venture by guessing that you’ve heard about Amazon and the retail empire built by Jeff Bezos at least once. But do you know that customers are spending up to $280,000 every minute on Amazon?
What an impressive number! That’s why we believe you’ll have a great chance to start making money by selling on Amazon!
However, you might not want to spend a lot of money or time on doing it? Enter: Dropshipping on Amazon!
If you ask any experienced E-commerce seller for a good way to get started selling products online without spending a ton of time or breaking the bank, chances are they will tell you that dropshipping is the way to go!
This article exists for this reason! We’ll share a quick guide on how to dropship on Amazon! Let’s explore!
What is Amazon Dropshipping & How Does It Work?
Amazon dropshipping is a business model where you list and sell products on Amazon without owning inventory or handling shipping. When you receive an order, you forward the order details to a manufacturer, distributor, or third-party supplier, who then fulfills the order and ships the product to the customer.
Amazon dropshipping works through straightforward steps:
- Dropshipping agreement establishment
- Customer order placement
- Seller order receipt
- Order confirmation transmission
- Order forwarding to dropshipper
- Order shipment by dropshipper
- Customer product receipt
However, sellers must comply strictly with Amazon’s dropshipping policy. This policy includes a set of rules for dropshipping, as shown in the screenshot below.
How Much Does It Cost To Dropship on Amazon?
Amazon dropshipping fees vary by product type but are often in the 8% to 15% range. If you are working with relatively small dropshipping Amazon products, it’ll take a hefty chunk out of your profits.
However, because Amazon charges fees a percentage of total price, the actual fee amount varies depending on an item’s overall cost. For all types of product, Amazon takes a minimum of 30¢ fee.
You also have to choose a selling plan. The Individual plan costs $0.99/ unit sold, and the Professional Plan costs $39.99/ month, no matter how many products you sell.
Pros & Cons of Amazon Dropshipping
Dropshipping on Amazon incurs both advantages and disadvantages. This section will explain the key details to make the right choice for your business.
| Pros |
Cons |
- Zero warehouse costs
- Large and loyal customer base
- Diverse product categories
- Faster deliveries and better customer service with FBA
- Lower operating costs
- No need for external marketing or SEO
|
- Increased competition
- Reduced profit margins
- Slower delivery times without FBA
- Lack of quality control
- Strict platform rules
- Fewer connections with customers
|
With pros and cons available, you would ask:
Is Amazon Dropshipping Profitable?
Yes, according to Jungle Scout’s State of the Amazon Seller Report, 94% of sellers who dropship on Amazon are profitable. However, profitability depends on several factors, including product sourcing costs, selling prices, and Amazon fees.
Therefore, to be profitable, you need to conduct thorough product research and find reliable suppliers offering competitive products.
So, we’d conclude that if you correctly price lever, dropshipping on Amazon can be a very profitable business.
How to Dropship on Amazon in Six Steps
Below is a complete walkthrough on how to start dropshipping Amazon business.
Step 1: Create an Amazon Seller Account
Before you can start dropshipping on Amazon, you need to create a seller account. You can access the Amazon Seller Central site and sign up for an Amazon seller account. You will fill in details about your business:
- Business email address
- Internationally chargeable credit card
- Government ID
- Tax information
- Phone number
- Bank account for receiving sales
Once you’ve provided this information, you can complete your registration to become a registered seller on Amazon. Congrats!
Step 2: Find Potential Products to Sell
Next, you will find the top money-making products on Amazon, check out several tools like Google Trends, Helium 10 Black Box, or Jungle Scout to find product ideas. In particular, explore Jungle Scout to receive free 10,000 Amazon best sellers and trending products. Additionally, you can try to use Jungle Scout’s Opportunity Finder to find high-demand or low-competition product opportunities. Begin your search with the following criteria:
- 100-300 unit sales per month
- Set competition to “very low” to “low”
- Fix the average monthly price from $20-$70
- Set niche score to 7+
However, please keep in mind that there are several requirements and restrictions for merchants to sell their products on Amazon. For beginners, categories like housewares, sports & outdoors, patio, and home & garden are recommended due to their lower maintenance requirements.
Read our following topics for more information:
Step 3: Find an Appropriate Supplier
Next, you need to find a supplier to fulfill orders on your behalf. And by a supplier, we mean a legitimate, honest one who understands the concept of dropshipping and isn’t out there to take your money.
However, dropshipping suppliers don’t spend much money on marketing to provide you with products at low cost, so it’s unlikely for them to appear in the top SERPs, as they don’t heavily invest in SEO.
Plus, even if you find authentic dropshipping suppliers , there is always a chance you can:
- Get overcharged
- Buy poorly designed products and incur customer wrath
- Get sued if your dropshipping supplier doesn’t ship what the customer was promised
The AutoDS Warehouse is a valuable resource that offers exclusive products from private suppliers and provides a competitive edge. Additionally, it offers various deals to increase profits or attract customers.
We know, these problems make dropshipping on Amazon look very risky, but there’s always a way to avoid all these troubles while still finding yourself an appropriate supplier that will help you rake in the profits.
Step 4: Create Amazon Listings & Import Products
Your product listing is the first thing that customers will read when visiting your store on Amazon.
Firstly, you go to the “Inventory” tab, scroll down to “Add Product,” then choose “Create New Product Listing.” Complete all the required information fields, click publish, and voilá!
Remember that customers make their decision to purchase, based on the information and content you provide there. So, it needs to be creative, innovative, compelling, and carry all your product’s top keywords.
In short, for your dropshipping business to be successful, you need to draw prospects to your listing and convince them to buy your item.
Therefore, get ready the tones and content you’d want to showcase on your store. We’ll mention what you should write to sell well in the next step.
Step 5: Write compelling product titles and description
Below are several tips and tricks to outperform your competitors in the Amazon search engine and create a compelling copy:
- Use long and descriptive titles with well-ranked keywords, as seen in top products.
- Craft detailed product descriptions with the same goal in mind.
- Clearly display your refund policy to enhance the trustworthiness of your listing.
- Request customer reviews through convincing email marketing campaigns.
You’re almost there. The final step is to launch your product on Amazon. You should implement this by formulating a strategy that focuses on social media promotion, giveaways, as well as Amazon Sponsored Products campaign.
- Make your newly launched product visible in Amazon search results.
- Start with PPC campaigns to promote visibility.
- Promote your product on social media platforms like Facebook, Twitter, and Instagram.
- Generate market hype by organizing giveaways.
6 Useful Tips for Dropshipping on Amazon
Now that you know how to dropship with Amazon, let’s have a look at some tips to entice prospective customers.
Get reviews
Up to 88% of customers say that they trust online reviews as much as personal recommendations. That’s why you should get reviews for your online business. A review that includes images or videos means a lot to someone considering to purchase your products.
You can email customers who have bought your products. Thank them and request them to give you a review if they are satisfied with the purchase. Also, include a link to the listing page in the email to make it convenient for them.
In case you get a negative review, take the time to find its root cause, offer an apology, and provide a solution.
Offer merchandise bundles
Another effective strategy is bundling related products and offering them as a package deal. If your products all come from the same place and suppliers, this can considerably reduce shipping costs.
If you realize that a specific item is selling well, but you don’t have a great margin on it, look around at what customers might need with that product.
Don’t sell the same products as everyone else
The fastest way to fail in business is to attempt selling the same hot products as every other seller. When a high number of businesses and individual sellers sell the same merchandise, competition will drive prices down.
As you’ll see in the next tip, choosing a niche market is a sustainable strategy.
Cash in on niche products
One of the greatest things about dropshipping is the freedom it offers you to experiment with selling assorted merchandise. You can see in a traditional retail operation where items are bought upfront and in bulk, retailers aren’t going to risk buying inventory unless they’re certain they’ll be able to sell it in a short time period.
What about online sellers who dropship? They don’t inventory upfront and only pay for the products after selling, so the risk of trying something new is minimal. If it doesn’t sell, the only thing they lose is a little time spent listing it. As a result, online sellers that dropship can offer various products that big-box retailers aren’t trying to sell.
Pay attention to seasonal objects/ goods
Seasonal items can be a significant cash cow for online merchants who dropship on Amazon, because typical retailers don’t generally carry enough of it for fear of overstocking.
Therefore, there’s a huge opportunity for sellers like you. Amazon often offers seasonal promotions for sellers to join, which is when stores offer deals for flash sales and related items to be promoted right on the front page.
Don’t attempt to compete on price only
The most common error of beginners is competing only for cost. If low pricing is your only selling point, someone can easily beat you when their products have more to offer.
So, try to offer more and justify a higher cost. Keep in mind that you’re doing dropshipping because you know you can promote better than your competitors. Think of promotions, deals, free shipping, services, and more, to command a higher price and not cost yourself the risk of losing sales.
In this section, we include some tools that will help you get started with Amazon dropshipping:
- Shopify. You can use Shopify to add Amazon as a sales channel to your online store. Shopify can also be used to track your own inventory and alert you if you have Amazon sales that need fulfilling. To take advantage of Shopify, ensure that you haven’t chosen FBA for shipping your products.
- Merchant Words. You can use this tool to check search volume and data for keywords. Its paid plans start at $29.99/ month
- FeedCheck. This software helps you monitor and respond to customer reviews to create connections with customers across all your sales channels. You can easily access Amazon reviews and provide better customer service for people. Additionally, it allows you to track competitors’ product reviews and questions so you can analyze and improve your own products.
- Sellery. This real-time Amazon repricing tool helps you create repricing strategies to win the Buy Box, while increasing sales and profits automatically. You can use its trial version for free, then commit to the paid plan, which works out to 1% of your gross monthly sales. Minimum starts at $50/ month.
- Seller.Tools. This software helps automate your Amazon dropshipping store. You can access a robust PPC management tool, keywork manager, product research tools, and marketing automation tools built using ManyChat. You can download its Messenger marketing workflows for promotion counters, rebate distribution, automated review captures, and more to grow your business fast.
- Feedback Express. This software helps you get more reviews on your Amazon store. It can also remove negative reviews, so you’ll keep a high rating on your products and online store. You can even blacklist consumers that are notorious for leaving negative reviews. Its paid plan starts at $20/ month.
- Amazon Volume Listing Tools. Amazon provides multiple tools to simplify your seller experience. You can quickly download spreadsheets for order and inventory information. It’s also possible to modify your pricing and product quantity with ease.
Final verdict
Whether you are a newbie or veteran, dropshipping on Amazon can be a great way to boost sales for your business. Try to find yourself partners like reliable, trustworthy, and quality suppliers, while you focus your resources on promotion, listing creation, getting reviews, and improving your store’s visibility.
So, would you like to try this journey? Share your thoughts with us, and we’ll be ready to accompany you!
