Are you planning to start selling on Amazon but don’t have much to invest in it? If you ask sellers with experience, about ways of getting started to sell online without taking a huge hit on your saving, chances are that you get recommended to Dropship. Have you wondered How to Dropship on Amazon?
How does Dropshipping on Amazon work?
As you all know, Dropshipping is a method where a seller takes orders and fulfill them through their supplier when a customer buys the product. The sold products are often positioned as their own and the customer will never be aware that the products come directly from the manufacturer. Amazon, Shopify and eBay are famous platforms that you can find this practice at.
At the beginning, all this may sound complex to you. We are going to help you get a better idea of how you can start to dropship using Amazon.
- The customer on Amazon purchases a product that you listed on Amazon.
- You receive the funds from the purchase once the transaction is finalized. Next, you purchase the product directly from your supplier. You have to provide them the customer’s information for order fulfillment.
- Finally, with the customer information, the supplier ships the products directly to the customer on behalf of you.
Dropshipping using Print on Demand
Print on Demand is one of the most popular forms of dropshipping. This method lets you advertise customized mugs, masks, tshirts without having to purchase any inventory. Once the sale is made, the supplier manufactures the product and ship it to your customer.
Drop shipping vs Traditional Amazon Selling
Drop shipping is only one of many methods of starting to sell on Amazon. Other methods such as wholesaling and Private Label selling are very popular on Amazon.
Purchasing a bulk of goods from your suppliers with the intention of reselling them to another retailer or to sell them as a retailer by yourself is wholesaling. Private Label selling is where you create your own branded products which are to be sold on Amazon.
Advantages of Drop shipping over Private Label and Wholesaling
There are many advantages to starting to dropship on Amazon more than using the traditional methods of wholesaling or private labels. The list can be found below;
Low start-up cost
Just like popular methods of selling on Amazon such as Private Labels or Wholesaling, you do not require to own inventory to start Dropshipping. You make the listing and wait for the customer to pay for the sale. Simply, a portion of this money is used to purchase the product from the supplier and have them ship it to your customer.
Ability to set up Quick
Since you do not have to own any inventory to Dropship on Amazon, it is very quick and easy to have it set up. You are not waiting for your inventory to arrive at your warehouse or to be manufactured and released from the factories. Moreover, they do not have to be even shipping to the fulfillment facility. All you are waiting for is a sale and then it is ready to go.
Automate the Business
With the daily changing technology, there are many apps which allows you to Automate your dropshipping business on Amazon. With the use of these, you can have more time on your hands to focus on other opportunities.
Does Amazon allow Dropshipping?
Based on Amazon’s dropshipping policy, it is acceptable. When you begin to dropship on Amazon, you have to purchase directly from the manufacturer or supplier. Purchasing from other retailers and having them fulfill the orders are prohibited on this platform.
Research made easy
As it involves selling many products which are already existing in the market, you can use tools like Jungle Scout. This helps you to identify other sellers with similar products and how they perform on Amazon. You can easily get the upper hand in starting your dropshipping business on Amazon.
Disadvantages of Drop shipping on Amazon
As good as Dropshipping sounds and what people speak of in terms of its advantages, it also have a few disadvantages which comes along.
There is severe competition in the market for Dropshipping because the barrier to entry is very low. You can begin to sell products that are different from others, but there is nothing stopping other sellers to start selling similar or identical products. When many sellers have the similar items, they tend to reduce the price by a few Cents or Dollars to capture the market. Noticing this, the competition also keeps doing so and this will bring the price to the rock bottom.
Slow delivery times
As the products that are dropshipped on Amazon are coming from suppliers and manufacturers who are overseas mainly from countries like China and India. Shipping times from these countries can take a few weeks or even months if the products are shipping using cheaper carriers. Hence, there could be many slow delivery times to be expected when dropshipping on Amazon.
Not being able to conduct Quality Control
The items are being shipped directly from the suppliers to the customer, hence the seller has no way of doing quality control for the products. The products will have to travel thousands of miles to reach the end user whereas, the item could easily get damaged in the process.
Start Dropshipping on Amazon
After the reading the above, I hope you understand a bit more about dropshipping on Amazon and here is how you can start to sell on Amazon.
Set up an Amazon seller account
You have to create an Amazon Seller Account in order to sell on Amazon. Visit sellercentral.amazon.com to create your own Amazon seller account. Amazon will offer you two types of accounts which is Individual and Professional.
Research and Find a product with Low Competition
Now that you have your Amazon Seller Account set up, you will need to research a product with low competition to sell on the platform. Using Jungle Scout tools, you are able to conduct product research and new opportunities in various categories.
At the beginning its advisable to always keep things simple and manageable while sticking with categories of low maintenance.
Search for the Products Found on Ali Express or DHGate
After conducting relevant research on specific Niches, you get a few product ideas. Then you begin looking for a supplier. One of the largest sites that support dropshipping products is Aliexpress. It helps anyone find a seller and come into agreement to dropship items on behalf of them easily unlike other websites. Many entrepreneurs use AliExpress as their goto dropshipping site due to the service and ease they offer.
Type in the products that you are interested in selling and many varieties of products will be available. You are shown with many details regarding the product starting from the Cost, Shipping Cost, Colours etc. There is a bonus 60-Day Protection on the product which you get when you purchase from AliExpress.
Create a listing on Amazon
When you have the perfect product idea and supplier to fulfill your dropshipping orders, you have to list the product on Amazon. First login to your Amazon Seller Central account, click on Inventory and then select Add a Product. Select the “Create a new product listing” from the screen.
You have to choose your product category first. Next, you can fill out the required information on the listing itself. Pricing is key for any listing on Amazon as well. Make sure to always keep in mind the Amazon fees. Individual Seller account have to pay an additional 1$ per sale whereas in the Professional Seller account you will have to pay a fee of 8-15% based on the category. More information about Amazon’s fees per category can be found on their Fee Schedule.
Finally, all that is left to do is to publish your listing and start making new sales.
Tips for success when Dropshipping on Amazon
Starting a Dropshipping business on Amazon may sound easy but going ahead with it and becoming successful takes more work. Here are few tips to help you succeed on your Dropshipping journey on Amazon.
Tip 1 – Promoting your listing
To generate a large number of sales, you have to attract a large number of traffic for your Amazon listing. This can be done in various ways.
By utilizing Amazon’s internal sponsorship program. With Amazon Pay-Per-Click (PPC) you are able to create advertisements for your listings. This helps your product to appear higher in search results based on the keywords you choose.
You can also drive traffic to your product listings through social media, email marketing etc. This method is not easy to achieve if you do not already have an established brand. But this can help you stand out from your competitors.
Tip 2 – Focus on Customer Service
Starting to Dropship on Amazon helps you remove many difficulties that you would go through while being an Entrepreneur. It is not required for you to manufacture the products or even store and ship it. All you have to do it list, promote, sell and make sure your customer receives the items.
In a traditional business you would spend more time in the whole business process whereas with Dropshipping, you can pay more attention and invest time for customer service. Along with good customer service, you will get great product reviews. On Amazon, great product reviews can mean good sales.
Tip 3 – Focus on your Brand
The biggest disadvantage which was mentioned above is that you have no way to conduct quality control. You cannot see the final design or end product which goes to the customer. The same way, other Dropshippers will also have access to the same supplier. Hence, this does not give you any upper hand over your competitors, it is wise if you can focus on building a brand.
The product can always be identical as your competitor but it necessarily doesn’t have to be the same. You can discuss with your supplier to have the item branded to your own brand before shipping out.
Tip 4 – Order samples
Always make sure to know what you are selling even before you list your products. Place sample orders from your suppliers and understand the service provided. It is better if you can purchase these products even before introducing yourself as a dropshipper. You can find out the delivery time and inspect the quality of the item. Was the item as described?
The little details will help you have a rough idea on how your customers will receive their order when you start Dropshipping on Amazon.
Tip 5 – Research and List More
Since there is no cost of startup in Dropshipping, you have the ability to research and list more products on your Amazon store. You can easily identify which products fails or works.
Start Dropshipping on Amazon
Hope that the above article helped you or even got you more excited about Dropshipping. Let it be Amazon or any other platform, as long as you start your first Business or even improve your existing one. Now you should have a sound understanding on How to Dropship on Amazon.
Should you have any further questions, feel free to comment down below and let us know your thoughts.