Amazon is an online website that sells various products, including books, music, electronics, and clothing. It was founded in 1994 by Jeff Bezos and is now one of the largest online retailers in the world. Amazon has made remarkable achievements in the dropshipping world through its effective management, features, integration, and customer support. It is now a well-known website for selling almost all kinds of products.
Dropshipping on Amazon works by connecting retailers with suppliers who will ship products directly to the retailer’s customers. The main outcome of dropshipping is that it allows entrepreneurs to start an online store without any upfront investment. You don’t need to be tense about carrying inventory or managing your stock.
To get started with dropshipping on Amazon, you need to find a supplier and sign up for an account. Once you’ve found a product you want to sell, you can add it to your online store. When someone places the order in your store, the supplier will ship the products directly to the customer’s door. You don’t need to worry about product packing or shipping the products yourself. All you need to do is process the order and payment in your store.
Advantages of Dropshipping on Amazon:
Amazon dropshipping has several advantages that make it an attractive business model for entrepreneurs looking to start their online stores.
• Low Start-Up Costs:
One of the most significant advantages of Amazon dropshipping is its low-cost business model. You do not have to invest your money in inventory, and you don’t need to worry about shipping or packaging products. You need a domain name and hosting for your website, and you can get started with dropshipping for less than $100, which is quite a manageable and suitable amount when it comes to business.
- Easy to Set Up:
Amazon dropshipping is also an easy business model to set up. You can create a professional-looking store on Amazon in just a few hours, and there’s no need to panic about setting up a complicated shipping infrastructure. You need to find a supplier and add their products to your store. Amazon’s website will provide you with a well-managed store structure for your website, and you can set up your store on it in no time.
- Location Independent:
Amazon dropshipping is a location-independent business model, which means that you can run your store anywhere. You need an internet connection, and you can manage your business from your laptop. You don’t have to stay at any particular place for hours to get your work done. Dropshipping is also a suitable option for entrepreneurs who want to travel or live overseas, and Amazon makes it easy for them.
- Flexible Hours:
As we have talked about above, dropshipping on Amazon is not location-based, but another advantage is that it allows flexibility in working hours. You get to choose the hours you want to work. You won’t be bound to work 24/7 or from 9 to 5. You can make your schedule daily at your convenience. It does not mean that you can work whenever you want and allow yourself laziness as it will not be good for a successful business. If you want your business to grow successfully, you will have to put in the time, effort, and dedication. However, flexible hours will let you schedule all tasks effectively. You get to spend family time too. Moreover, you can plan world trips too. So, it will be a perfect and win-win situation for your business growth and your personal growth.
- No Inventory Management:
One of the biggest and time-taking hassles of running a traditional eCommerce business is inventory management. You need a huge place to keep your stock, and regular follow-up is required too to keep up the high quality of products. However, you don’t need to be tense about stocking or managing inventory with dropshipping. It frees up your working time to focus on other aspects of your business, including place, travel, regular follow-up, etc. It saves you money by saving your rent and travel to the area.
- Convenient Order Management:
You do not have to tense about storing any inventory because Amazon will ship products directly to your customers from their warehouses. It eliminates the need to carry any inventory, which can be expensive and take up valuable space in your home or business. Moreover, order management through Amazon is easy-to-use and convenient.
- Access To Millions Of Amazon Customers:
Amazon is a well-known website as millions of people use it. It gives you reach to potential customers too. You’ll have access to millions of Amazon users when you start dropshipping on Amazon.
Disadvantages of Dropshipping on Amazon:
While there are several advantages of dropshipping on Amazon, there are also some disadvantages that you should be aware of before starting a store.
- Lower Margins:
One of the biggest disadvantages of dropshipping is that it offers lower margins than other eCommerce business models. You’re selling products that you don’t own, so you need to factor in the cost of goods sold (COGS) when setting your prices. It means that your profit margins will be lower than if you were selling products that you sourced and stocked yourself. When you are a supplier or manufacturer, the profit margin is a little higher than dropshipping. You don’t get to choose the materials or pricing for making the product for dropshipping. You have to rely on suppliers’ pricing, which leaves you with lower margins.
- Less Control:
When you dropship products, you have less control over your business than if you were selling products that you sourced and stocked yourself. You’re relying on suppliers to ship products to your customers, so you need to ensure that they’re reliable and efficient. If suppliers make mistakes or are slow to ship orders, it will reflect badly on your business. When it’s your manufacturing, you know how much you will require time and money to make a certain product; however, in dropshipping, all these rely on the suppliers you choose. So, your control over product-making, shipping, and delivery is low.
- Shipping Delays:
No matter how effectively you are managing customer support on Amazon and how hard you are trying to set up your store, a monster of shipping delay can hit you at any time. As the product’s manufacturing depends on the supplier, shipping delays can also happen. Other factors such as the country’s situation, shipping procedure, and quality issues can contribute too. What you have in your control is choosing a reliable supplier with good ratings to minimize the chances of shipping delays.
Dropshipping is a popular business model, which means that there’s a lot of competition. Amazon itself has a lot of competitors out there, and you will have competitors on Amazon too. If you want to succeed as a drop shipper, you need to find a niche market and offer unique and in-demand products. Otherwise, it won’t be easy to stand out on Amazon from the crowd.
- Requires Constant Work:
Running a successful dropshipping business requires constant work. You need to regularly source new products, manage your suppliers, and market your store. Dropshipping is not the right business model if you’re not prepared to put in the work.
We’ll provide a complete guide on how to start a dropshipping business on Amazon and advice on how to grow your business.
Step by Step Guide for Amazon Dropshipping:
Firstly, let’s take a look at the tips for starting a successful dropshipping store on Amazon:
Choose The Right Niche:
The first action in starting a successful and long-lasting dropshipping business is choosing the right niche. It means that you need to find a market with potential and focus on products that fulfill that market’s needs. For example, if you want to start a dropshipping business in the pet industry, then you might want to focus on products like dog food, toys, and accessories.
When choosing a niche, it’s important to consider the following factors:
- The size of the market
- The potential demand for your products
- The competition in the niche
- The profitability of the niche
Once you’ve chosen your niche, you need to find suppliers who can provide you with quality products at a good price. You can find suppliers by conducting online research or by contacting suppliers directly.
Choose A Different Drop shipping Platform:
Once you’ve chosen a niche and found a supplier, you need to choose a dropshipping platform and Amazon. A dropshipping platform is a software that you’ll use to run your business, and there are several to choose from, including Oberlo, Shopify, and BigCommerce. You can also choose social media platforms and link them with your Amazon store. It will also help in the marketing and branding of your store.
When choosing a dropshipping platform, it’s important to consider the following factors:
- The cost of the platform
- The features of the platform
- The ease of use of the platform
- The customer support offered by the platform
- Amazon Store Set Up:
After choosing your niche, you need to set up your store. It includes adding products, setting up payment methods, and creating a shipping policy.
• Source High-Quality Products:
The next step in starting a successful dropshipping business is high-quality sourcing products. When choosing products to sell, you need to consider the quality of the product and the price.
It is necessary to choose products that are both high-quality and affordable. It ensures that you’ll make a profit when selling them, and it also helps you build a loyal customer base.
When sourcing products, it’s important to consider the following factors:
- The quality of the product
- The price of the product
- The supplier of the product
- Set Up Your Branding:
Once you’ve sourced high-quality products, it’s time to set up your branding. Your branding will also set you apart from your competitors, and it’s important to create a branding strategy that will also resonate with your target audience.
When creating your branding, it’s important to consider the following factors:
- The colors you use
- The fonts you use
- Your logo
- Your slogan
- Market Your Business:
The final step in starting a successful dropshipping business is marketing your business. It includes creating a marketing strategy and promoting your business on social media and other channels.
When marketing your business, it’s important to consider the following factors:
- The mediums you use to market your business
- The content you publish on these channels
- The tone of your marketing content
- The design of your marketing materials
Now that we have covered the starting guide of dropshipping on Amazon, let’s discuss the complete process in detail. We’ll cover how to find products to sell, set up your Amazon seller account, and ship orders from your Amazon seller account to your customers.
How to Dropship on Amazon:
Here are the steps for dropshipping on Amazon:
• Find Products To Sell:
As we have discussed before, the first step is finding products you want to sell on Amazon. You can search for products on Amazon, browse supplier catalogs, or find products using Oberlo.
Once you’ve found a product that you want to sell, you’ll need to determine the Amazon product category to which it belongs. Amazon has a wide range of product categories, so you’ll need to ensure that the product you want to sell falls into the correct category.
You can find the Amazon product category for a product by looking at the Amazon Product Category column on the Oberlo Supplier Marketplace.
• Set Up Your Amazon Seller Account:
Once you’ve found a product you want to sell, you’ll need to set up an Amazon seller account. As we mentioned earlier, Amazon requires you to provide information about yourself and your business when you set up your account. You’ll also need to choose a selling plan. Let’s look at setting up your Amazon seller account.
To drop ship on Amazon, you first need to create an Amazon seller account. Amazon requires you to provide information about yourself and your business when setting up your account. Here’s what you need to deliver:
- Your name and contact information
- Your business information, such as the name of your business, the type of business, and your EIN (Employer Identification Number)
- Information about your products, including the SKU, title, description, and price
- Shipping information, including the type of shipping you offer and the shipping address
- Payment information, such as your bank account info or Amazon Pay credentials
- You’ll also need to choose a selling plan. Amazon offers two selling plans: Individual and Professional. Individual sellers pay $0.99 per item sold and a $39.99/month subscription fee. Professional sellers pay $39.99 per item sold and no monthly subscription fee.
If you want to dropship on Amazon, you’ll need to create a professional Amazon seller account. You’ll need to provide additional information, such as your business entity type and Tax ID.
• List Your Product On Amazon:
Once you’ve set up your Amazon seller account, you’ll need to list your product on Amazon. To do this, you’ll need to provide the following information:
• The SKU of the product
• The title of the product
• The description of the product
• The price of the product
• The shipping weight of the product
• The Amazon ASIN of the product
• The Amazon category of the product
• The Amazon brand of the product
• Set Up Your Shipping Methods And Prices:
Next, you will have to set up your shipping methods and prices. Amazon allows you to offer two types of shipping: free shipping and flat rate shipping. Free shipping is when you offer free shipping on all orders, regardless of the order size. Flat rate shipping is when you charge a fixed amount for all orders, regardless of the order size.
You can also choose to offer expedited shipping as an optional extra. Expedited shipping is when you offer faster shipping speeds in exchange for an additional fee.
• Set Up Your Payment Methods:
Next, you’ll need to set up your payment methods. Amazon allows you to accept various payment methods, including credit cards, debit cards, Amazon Pay, and PayPal.
You can also accept product payments in various currencies, including US dollars, Euros, British pounds, and Canadian dollars.
• Manage Your Amazon Inventory:
The final step is to manage your Amazon inventory. When you start dropshipping on Amazon, you’ll likely want to start with a small inventory. You can add more products to your inventory as you grow your business.
You’ll need to use the Amazon Seller Central dashboard to manage your Amazon inventory. The Amazon Seller Central dashboard allows you to view your Amazon inventory, orders, and sales reports.
Tips for Growing Your Amazon Dropshipping Business:
We’ve covered the tips for starting a successful dropshipping business on Amazon. Let’s take a look at some advice on how to grow your business.
• Focus On Customer Satisfaction:
One of the most effective and best ways to grow your dropshipping business is to focus on customer satisfaction. It means ensuring that you provide high-quality products and excellent customer service.
When customers are happy with your products and service, they’re more likely to recommend your business to their friends and family. It can help you to attract new customers and grow your business.
• Use Social Media To Promote Your Business:
Another great way to grow your dropshipping business is to use social media to promote your business. Platforms like Instagram, WhatsApp, and Facebook are great for promoting your products and building relationships with your customers.
When using social media to promote your business, it’s important to consider the following factors:
- The type of content you publish
- The tone of your posts
- The frequency of your posts
- The design of your posts
- Run Ads On Social Media Platforms:
Another great way to promote your dropshipping business is to run ads on social media platforms. It helps you reach and appeal to a wider audience and attract more customers.
When running ads on social media platforms, it’s important to consider the following factors:
- The type of ads you create
- The audience you target with your ads
- The budget for your ads
- The timing of your ads
- Offer Discounts And Free Shipping:
Another great and effective way to attract more customers to your dropshipping business is to offer discounts and free shipping. It helps you to stand out from your competitors and makes it more likely that customers will choose to buy from you.
When offering discounts and free shipping, it’s important to consider the following factors:
- The products you offer discounts on
- The amount of the discount you offer
- The products you offer free shipping on
- The shipping policy for your store
- Use Influencers To Promote Your Products:
Another great way to promote your dropshipping business is to use influencers to promote your products. It involves working with influencers who have a large following and are trusted by your target audience.
When working with influencers, it’s important to consider the following factors:
- The type of influencer you work with
- The budget you have for working with influencers
- The number of influencers you work with
- The type of content they create
Common Mistakes to Avoid:
Now that we’ve covered the tips for starting and growing a successful dropshipping business let’s look at some common mistakes.
Focusing Too Much On Profits:
When starting any dropshipping business, it is important to focus on the long-term goals of your business rather than short-term profits. It means that you should resist the temptation to cut corners or make decisions that will negatively impact your business’s growth and long-term health.
Not Investing Enough In Marketing:
A common mistake among dropshipping entrepreneurs is not investing enough in marketing. Without a solid marketing strategy, it cannot be easy to attract new customers and grow your business.
Not Diversifying Your Product Offerings:
Another common mistake among dropshipping entrepreneurs is not diversifying their product offerings. It can make it difficult to attract new customers and grow your business.
Focusing On One Sales Channel:
A common mistake among dropshipping entrepreneurs is focusing on one sales channel. It can make it difficult to reach new customers and grow your business.
Not Having A Clear Vision For Your Business:
One of the biggest mistakes that dropshipping entrepreneurs make is not having a clear vision for their business. Without a clear vision, it cannot be easy to make decisions to help your business grow.
Because you’re not responsible for any inventory, there’s no need to worry about excess stock or accidentally over-ordering. This system is perfect for new eCommerce entrepreneurs who don’t want to invest in their inventory, and it’s also convenient because you don’t have to deal with shipping products yourself.
When you first start dropshipping on Amazon, it’s important to remember that not all products will be a success. You’ll need to experiment with different products and pricing strategies to find what works best for you. Thanks for reading! We hope this Amazon Dropshipping article will help you learn how to start dropshipping on Amazon.