Overview
Dropshipping has become a popular business model in recent years due to its low startup costs and potential for high profits. And many consider using this model on the Amazon marketplace.
However, there are several factors to consider before diving into this business, such as the risks involved and the competition in the Amazon marketplace.
This blog post will provide a comprehensive guide on dropshipping on Amazon, including how to get started, source products from AliExpress and Amazon suppliers, and make money through effective marketing and customer service.
We will also discuss the potential earnings of Amazon dropshippers, the risks involved, and the legality of dropshipping on Amazon.
What Is Dropshipping?
Dropshipping Busines Model
Dropshipping refers to a method of online retail where a seller can offer products to customers without needing to maintain an inventory.
The products are shipped directly from the supplier or warehouse to the customer. This means that the seller does not have to handle the product physically.
In the following sections, we will discuss the advantages and disadvantages of dropshipping and the factors to consider before starting a business on Amazon.
We will also provide a comprehensive guide on starting dropshipping with little upfront costs and becoming successful.
What Is Dropshipping On Amazon?
Dropshipping on Amazon is different from other forms of dropshipping because Amazon has strict policies and guidelines that sellers must follow.
Amazon’s policies prohibit the use of certain practices in dropshipping, such as shipping directly from suppliers or using third-party accounts to fulfill orders.
Amazon Dropshipping Policy
Following Amazon’s dropshipping policy is vital to prevent losing your selling privileges on the Amazon platform.
The policy guidelines include the following:
- Clearly identify yourself as the seller on all relevant documents and materials, such as invoices, packing slips, and external packaging.
- Avoid including information about wholesalers, suppliers, or manufacturers in your product packaging or Amazon store product descriptions.
- Ensure that you are responsible for accepting and processing returns from customers.
- Comply with the Amazon Terms of Service as outlined in the seller agreement.
Explanation Of Amazon’s Dropshipping Policy
To succeed in dropshipping on Amazon, it is important to follow some guidelines:
- Firstly, you must be the seller of record in order to avoid penalties. This means that you should own the products before they are shipped to the customers. Secondly, avoid using eCommerce or retail sites as they are unable to list you as the seller of record and can cause confusion for customers.
- It’s crucial to make the customer experience seamless and take accountability for it as you are selling as your own brand, not as Amazon. Include your contact information with the product packaging to prevent customers from wondering who to contact for support. It is also important to ensure that the manufacturers, suppliers, and dropshipping companies are okay with you being the seller of record.
- It is prohibited to create an Amazon product listing for an item already on another retailer’s site, take the order through Amazon, and then enter the order into the third-party retailer’s system so they can ship it. By following these guidelines, you can avoid mistakes and increase your chances of success in dropshipping on Amazon.
- To find good Amazon dropshipping suppliers, ensure that they do not ask for control of your Amazon account, have proof of authorization to sell products from specific brands, have experience dropshipping with Amazon sellers, and offer customer service support. Also, ensure that they have the ability to handle returns accurately within Amazon’s returns policies.
Other Considerations When Dropshipping On Amazon
In addition, Amazon is highly competitive, with millions of sellers offering similar products. Staying out and attracting customers can be challenging, especially without a unique value proposition or marketing strategy.
However, dropshipping on Amazon also has several advantages. Amazon has a large and loyal customer base, making it easier to reach potential customers. Additionally, Amazon offers various tools and resources to help sellers optimize their listings and increase sales.
Overall, dropshipping on Amazon requires careful attention to Amazon’s policies and guidelines, as well as a unique value proposition and marketing strategy to stand out in a highly competitive marketplace.
How To Start Dropshipping On Amazon
To start dropshipping on Amazon, you must create a seller account on the platform. This involves registering your business, providing your tax information, and verifying your identity.
Amazon offers several seller programs, including Individual and Professional plans, each with its own benefits and fees.
Selling On Amazon Pricing:
- Individual Plan – $0.99 per item
- Professional Plan – $39.99 per month
Once your seller account is set up, you can start sourcing products from suppliers and listing them on Amazon.
However, adhering to Amazon’s dropshipping policy and guidelines is essential to avoid account suspension. This includes ensuring that your suppliers are reliable and that your products are of high quality and comply with Amazon’s product listing guidelines.
How To Do Dropshipping On Amazon From AliExpress
Is it possible to use AliExpress as a dropshipping source for Amazon? The answer is yes. But we don’t recommend it.
AliExpress is a popular platform for sourcing products for dropshipping on Amazon due to its vast selection of products and low prices.
It is possible to use AliExpress on Amazon through Shopify. Create an online store using Shopify, and connect it to DSers, which sources inventory from AliExpress. And this is how to dropship on Amazon from AliExpress (More on Shopify below).
To start dropshipping on Amazon from AliExpress, you must find a reliable supplier to provide high-quality products at a competitive price.
One of the main differences between AliExpress and other suppliers used by Amazon sellers is that AliExpress suppliers often have longer shipping times, which can impact customer satisfaction.
To find and work with reliable AliExpress suppliers, you should look for suppliers with high ratings and positive reviews. It’s also important to communicate clearly with your supplier and establish a good working relationship.
This is how to dropship on Amazon from AliExpress. Or you can use other suppliers like CJdropshipping to automate the order fulfillment process and simplify inventory management.
How To Dropship On Amazon Without Money
Dropshipping on Amazon without money upfront is possible by finding a dropshipping supplier who allows you to pay for products after the customer has paid you. This means that you only order the product from the supplier after you have received payment from the customer.
To do this successfully, you will need to have good communication with your supplier and ensure that they have enough inventory to fulfill orders promptly.
It’s also important to set competitive prices that allow you to make a profit while covering the cost of the product and any fees associated with selling on Amazon.
By using this method, you can start a dropshipping business on Amazon without needing to invest upfront capital.
Approved Suppliers
When dropshipping on Amazon, it is essential to use approved suppliers to avoid violating Amazon’s policies and guidelines.
Amazon requires sellers to use suppliers that meet their criteria for reliable and high-quality products. Using unapproved suppliers can result in account suspension or termination.
Sellers can also research and contact approved suppliers directly to establish relationships and negotiate better prices and shipping terms. It is essential to vet suppliers thoroughly before working with them to ensure they meet Amazon’s requirements and provide high-quality products and services.
Using approved suppliers not only ensures compliance with Amazon’s policies but also helps sellers provide a better customer experience by offering reliable and high-quality products.
It can also help sellers build a positive reputation on Amazon and increase their chances of success in the competitive marketplace.
For example, CJdropshipping is one of the suppliers that are allowed on Amazon.
Is It Legal To Dropship From Amazon To Shopify?
Dropshipping from Amazon to Shopify is technically allowed. It is possible to connect your Amazon account to your Shopify store as a sales channel by logging into your Shopify account and adding Amazon from the user panel.
According to Shopify, linking your Amazon account to Shopify is straightforward. To do that, you can use a Multi-channel Fulfillment app available on the Shopify app store.
First, after setting up an Amazon account and being approved, you can connect it to Shopify through one of the Amazon fulfillment apps. These apps serve as a mediator between Amazon and Shopify and can simplify the fulfillment process by automating order fulfillment, syncing your inventory, and updating tracking information for your customers.
Several apps are available for this purpose:
- Amazon by Codisto
- Amazon by CedCommerce
- FBA Shipping by ByteStand
- Amazon Integration Plus by Common-Services
Once you choose and install the app of your choice, you can start creating listings for your products.
Linking accounts makes tracking orders and customer information on both platforms easier. It can also help to build brand recognition and encourage repeat purchases.
To learn more about opening a Shopify store, check out our What Is Shopify? A Beginner’s Guide 2023.
Is Dropshipping On Amazon Worth It?
Pros And Cons Of Dropshipping On Amazon
Dropshipping on Amazon offers several benefits, including low startup costs, no inventory management, and access to a large customer base. However, there are also some drawbacks to consider.
One of the main disadvantages is the high level of competition in the Amazon marketplace, which can make it difficult to stand out and drive sales.
Additionally, Amazon’s strict policies can make it harder to succeed. One mistake can cause an account suspension.
Calculation Of Potential Profits And Risks
Calculate the potential profits and risks involved to determine whether dropshipping on Amazon is worth it. That includes factoring in the costs of sourcing products, Amazon fees, shipping expenses, and other expenses associated with running your business.
You should also consider the level of demand for the products you plan to sell and the level of competition in your niche.
Before starting a dropshipping business on Amazon, several factors must be considered.
Firstly, you need to identify a profitable niche with sufficient demand but isn’t oversaturated with competitors.
You must also research and source reliable suppliers who can provide high-quality products at competitive prices. Additionally, you should develop a marketing strategy to attract customers and drive sales.
How To Make Money Dropshipping On Amazon
To make money through dropshipping on Amazon, you need to optimize your product listings and pricing to attract customers and drive sales. This includes using effective keywords and product descriptions to improve visibility and conversion rates.
You should also price your products competitively while still leaving room for a profit margin.
Marketing and customer service are also crucial to the success of your dropshipping business on Amazon.
You can use various marketing channels like social media, email marketing, and Amazon Advertising to reach your target audience and promote your products.
Providing excellent customer service can help build trust and loyalty with your customers and lead to positive reviews and word-of-mouth referrals.
Finally, you can use automation tools and Amazon dropshipping app if you also use Shopify to streamline your operations and save time. These tools can help automate tasks like order fulfillment, inventory management, and customer service, allowing you to focus on growing your business and increasing your profits.
Dropshipping on Amazon from AliExpress or other suppliers can be a profitable business if you follow best practices and implement effective strategies for product listing optimization, marketing, and customer service. By using automation tools and reliable suppliers, you can build a successful and sustainable dropshipping business on Amazon.
To calculate your Amazon Seller (FBA) fees and store profits, use our Free Amazon FBA Calculator.
Amazon Dropshipping Salary
Is dropshipping on Amazon profitable? Dropshipping on Amazon can be a lucrative business, with some sellers earning up to six figures a year.
However, the actual earnings of Amazon dropshippers depend on various factors such as the product niche, competition, pricing strategy, and marketing efforts.
According to a survey by Jungle Scout, most Amazon sellers make at least $1,000 per month in revenue, and a quarter of sellers make at least $25,000.
Real-life examples of successful Amazon dropshipping businesses include individuals who have found profitable niches and established a strong brand presence on Amazon.
By providing excellent customer service and using effective marketing strategies, these sellers have scaled their businesses and increased their profits significantly.
Is Dropshipping With Amazon Risky?
Like any business venture, dropshipping on Amazon comes with some risks that sellers should be aware of.
These include issues like counterfeit products, intellectual property violations, account suspension, and competition from other sellers.
Additionally, dropshippers may face challenges with shipping times and customer service due to their reliance on third-party suppliers.
However, there are ways to minimize these risks and protect your business on Amazon. This includes working with reliable suppliers, monitoring your inventory closely, responding promptly to customer inquiries, and adhering to Amazon’s policies and guidelines.
It’s also essential to stay up-to-date with changes in Amazon’s policies and adjust your business strategy accordingly.
Dropshipping on Amazon can be a profitable business if you’re willing to put in the time and effort to research and implement effective strategies.
While risks are involved, taking steps to minimize these risks and following Amazon’s policies can help you build a successful and sustainable dropshipping business on Amazon.
Is Dropshipping From Amazon Actually Legit?
Dropshipping on Amazon is a legitimate business model that can be profitable for selling products online.
While there are some misconceptions and myths about Amazon dropshipping, such as the belief that it’s a get-rich-quick scheme, the reality is that it requires hard work and dedication to build a successful business.
To ensure the legitimacy of your Amazon dropshipping business, it’s essential to comply with Amazon’s policies and guidelines, work with reliable suppliers, and provide excellent customer service.
By focusing on building a sustainable business and providing value to your customers, you can establish a legitimate and profitable dropshipping business on Amazon.
Alternatives To Dropshipping On Amazon (FBA)
Fulfillment by Amazon (FBA) is a service offered to sellers, which involves storing their products in Amazon’s warehouses. This means that sellers do not have to handle their products’ shipping to customers.
FBA provides various advantages, including the ability to sell multiple types of products at once, avoiding the hassle of returns and refunds, and not having to worry about limited storage space.
Additionally, FBA enables sellers to customize their products through a manufacturer and sell them under their own brand name on an Amazon storefront.
The disadvantages to FBA are additional costs involving fees and upfront inventory payments.
Alternative Dropshipping Platforms
While dropshipping on Amazon can be lucrative, it’s important to remember that success is not guaranteed. With millions of sellers competing for attention, standing out and attracting customers can be challenging.
However, with the right strategies in place, it is possible to succeed on Amazon. This includes finding profitable niches, using effective marketing techniques, and providing exceptional customer service.
That being said, some entrepreneurs prefer to use alternative platforms like Shopify to have more freedom and control over their business.
With Shopify, sellers have more flexibility in terms of choosing their own suppliers and pricing. Additionally, Shopify offers a variety of tools and resources to help sellers optimize their online store and attract customers.
Ultimately, the decision to use Amazon or an alternative platform like Shopify depends on individual preferences and business goals.
While Amazon may offer a larger audience and greater visibility, it also comes with more regulations and limitations. Shopify, on the other hand, may offer more creative freedom and control but may require more effort to attract customers and build a brand.
Regardless of the platform chosen, it’s important for dropshippers to remain adaptable and willing to adjust their strategies as needed.
By staying up-to-date on market trends, focusing on customer satisfaction, and continuously seeking opportunities for growth and improvement, dropshippers can increase their chances of success in the competitive world of e-commerce.
Tips To Become Successful Dropshipping On Amazon
Finding a product that you are interested in is essential for success in dropshipping on Amazon. When you are passionate about a product, you are more likely to put in the time and effort required to make it successful.
Once you have identified a product, the next step is to find a supplier that can provide it. This is where you will need to do some research to find the best supplier that meets your requirements.
When working with a supplier, you should communicate your expectations and any custom modifications you would like to make to the product. This will ensure that the supplier understands your needs and can provide products that meet your specifications.
Once you have received the product, you can brand it with your logo and any other customizations to make it stand out in the marketplace.
Using a local warehouse, either Amazon’s or another, can help you provide faster shipping and better customer service.
Amazon’s Fulfillment by Amazon (FBA) program is a popular option that provides storage, packing, and shipping services for your products. Alternatively, you can also use third-party fulfillment services that can provide similar services.
Providing exceptional customer service is crucial for success in dropshipping on Amazon.
Responding to customer inquiries promptly and resolving any issues fast can help you build a positive reputation on Amazon and encourage repeat business.
It is also important to provide accurate product descriptions, pricing, and shipping information to avoid any misunderstandings or complaints from customers.
Most importantly, setting your prices to cover expenses like inventory and marketing is vital to ensure your ventures’ profitability.
What We Recommend If You Are Just Starting Out
If you’re considering starting a dropshipping business, one recommended approach is to begin with Shopify and then expand to Amazon, including utilizing the Fulfillment by Amazon (FBA) service.
By starting with Shopify, you can begin testing and refining your product offerings, marketing strategies, and customer service processes in a low-risk environment.
Once you’ve established a successful dropshipping business on Shopify, you can expand to Amazon and take advantage of its massive customer base and FBA service.
By using FBA, you can leverage Amazon’s fulfillment and shipping capabilities, freeing up your time to focus on growing your business. Additionally, selling on multiple platforms can help diversify your revenue streams and increase your overall sales volume.
Conclusion
If done correctly, dropshipping on Amazon can be a lucrative business venture, but it also requires careful planning and execution.
Following the tips and strategies outlined in this guide can increase your chances of success and avoid common pitfalls.
Remember to keep in mind the potential risks and legal issues involved, and always prioritize customer satisfaction to build a sustainable and profitable dropshipping business on Amazon.
Is dropshipping worth it? For more about useful dropshipping strategies, check out How To Start Dropshipping For Free.
