How Amazon Dropshipping Works ( Free Handbook)

It’s logical for an entrepreneur to want to test the waters with Amazon Dropshipping. Amazon had over 300 million active customers and over $280 billion in revenue in 2019—using Amazon as a distribution platform for your business will result in significant dividends.

How does Amazon Dropshipping function, though? And how do you intend to make your eCommerce venture profitable?

This guide will explain whether or not Amazon Dropshipping is profitable, how to dropship on Amazon, and the best Dropshipping resources to get you started selling right away.

And can one dropship on Amazon?

Yes, you can dropship on the Amazon marketplace as long as you follow a few simple ground rules:

• Before shipping the order, remove all identifying details about the third-party vendor, including invoices, exterior packaging, and packing slips.
• On packing slips, invoices, and other product-related documentation, identify yourself as the seller.
• Adhere to the terms and conditions set out in your seller agreement and Amazon policies.
• Always act as the product’s primary seller.
• Accept and process returns on your own.

How much does Amazon Dropshipping cost?

Dropshipping fees on Amazon vary according to product type but are usually between 10% and 15%. If your Dropshipping margins are thin, this will significantly reduce your income.

Additionally, it would be best if you chose a sales strategy. Individual plans start at $.99 per unit sold, and professional plans start at $39.99 per month, regardless of the number of products you sell.

For more information on Amazon’s commission fees, please click here.

Is Amazon Dropshipping financially viable?

Dropshipping on Amazon has the potential to be lucrative. The average margin for Dropshipping is 10% to 30%. Amazon takes around 15% of the top-line revenue.

Therefore, if the margins are about 30%, selling a product on Amazon results in an additional margin of 15%. These margins can be increased if you win the Amazon Buy Box, but this is a highly competitive category and should not be relied upon in the long run.

Pros

The superiority of selling on Amazon compares to that of eBay—it’s easy to get started, you instantly gain access to a large audience, and you don’t have to fuss about marketing or SEO:

Dropship vendors that have been vetted: Amazon purchases products in bulk from manufacturers primarily based in Europe. After that, it warehouses everything until it is ready to ship. If you’re a first-time seller or a seasoned pro, you can deliver high-quality products to a global audience at scale.

There is no expense associated with storage: Additionally, Amazon offers its fulfillment centers, dubbed Fulfillment by Amazon, which enables you to supplement your dropshipped orders with your own without having to worry about packaging, shipping, or warehousing.

Enhanced discoverability opportunities: Additionally, Amazon offers over 30 distinct types. You can sell in several different Dropshipping niches as you want, enabling you to enter highly targeted markets when combined with suitable Dropshipping suppliers and products.

Cons

Data on sales: One danger associated with using Amazon’s platform is that Amazon will have access to all of your sales data, from the best-selling products to total sales.

Amazon has been accused of using this data to find lucrative selling opportunities and bolster its presence in the niche, thus eroding other merchants’ market share in its marketplace.

Customer relationships are less long-lasting: It’s highly improbable that you’ll establish a long-term partnership with your customers.

Amazon’s emphasis is more on assisting companies in selling their products than on developing customer relationships.

Prepare to have significant restrictions on your ability to brand your company, show your products, and interact with your customers.

There is no personalization available: Customization options are going to be highly restricted. Amazon has complete control over the branding, user interface, ads, and everything else.

Capital expenditure: To comply with Amazon’s fulfillment criteria, you must stock the supplier’s products. This means that you will need to make an initial investment to begin Dropshipping on Amazon.

Amazon Dropshipping: Follow these simple steps to learn how to Dropship on Amazon

To start Dropshipping on Amazon, you’d keenly follow the easy steps that include:

• Determine the best eCommerce platform
• Become an Amazon seller
• Obtain product category approval
• Link Shopify to your Amazon account
• Create a product listing on Amazon
• Integrate the inventory to Amazon sales channel

1. Determine the best eCommerce platform for your business.

You can now sell in the world’s largest marketplace easily through Shopify, mainly owing to the Shopify and Amazon collaboration. You can monitor products and orders through Amazon’s sales channel, as well as:

· Add new products to Amazon’s catalog.

· Create and handle deals on Amazon for currently available products.

· Link your Amazon product listings to your Shopify admin

If you don’t already have a Shopify store, sign up for a 14-day free trial to start with Amazon Dropshipping today.

2.Become an Amazon seller.

You must first create an Amazon seller account to sell on Amazon. To sign up, please visit sellercentral.amazon.com. You’ll be asked for information about your business, such as your address and tax ID number, as well as other personal and payment data.

3. If necessary, obtain product category approval

Amazon allows sellers to apply for clearance before selling those types of products. Fashion, groceries, music, and jewelry are all common categories that require approval before launching an Amazon store. Take a look at the rundown of possible product categories (Here).

4. Shopify allows you to link to your Amazon account.

Link your Amazon store to Shopify once you’ve created an account and been accepted. Select the + button next to Sales Channels on the left sidebar of your Shopify admin.

There will be a pop-up menu. Locate and press the + sign to the right of Amazon.

View the description for any segment for which you wish to obtain additional information. Then press Update sales channel to complete the process.

5. Make a product listing on Amazon

When you add the Amazon sales channel, your Dropshipping products do not pop up on Amazon. Shopify provides three methods for managing Amazon listings:

· Establish a link between Shopify and your existing Amazon listings.

· Create an offer for an existing Amazon product.

· Create a new Amazon product page for your new product.

When you’re just getting started, make sure to look for high-demand, low-competition products on Oberlo-which use AliExpress to sell its products. You can very well directly import products from Oberlo into Shopify and then present them on Amazon.

If this is your first time selling on Amazon, you might not be able to list all of your products immediately. Amazon places a weekly cap on the number of new ASINs you can make before selling more on the website.

6. Integrate the inventory management system with Amazon’s sales channel.

Shopify will update the Amazon listing automatically to fit the inventory of your products in the Shopify admin. Synchronize your inventory on Amazon using the inventory monitoring settings you’ve configured for each product variant. It is editable on the Shopify product description page.

Amazon-to-eBay Dropshipping 

Dropshipping low-priced products from Amazon FBA to eBay buyers is an older but still viable Dropshipping concept. Although it is legal, platforms and even consumers usually disapprove of it. You walk away with a razor-thin profit margin.

Consider the following scenario from a customer’s viewpoint: you pay $25 on eBay for the new grooming brush for your dog. You’re excited about waiting a week. When FedEx arrives at your house, your brush will be delivered in an Amazon package.

You visit Amazon and discover that the product is available for a few dollars less than you paid. What effect will that have in your opinion of the company from which you purchased? In this case, don’t anticipate a repeat purchase.

The concept boosts the drop shipper’s revenue, but no one else benefits from it. On the other hand, eBay does not endorse the Amazon-to-eBay arbitrage business model, reportedly barring hundreds of Israeli businesses from participating in it in 2017.

In general, if you want to create an ethical and credible Dropshipping business, stay away from Amazon to eBay Dropshipping.

The best software for Amazon Dropshipping 

Consider the following list of resources for getting started with Amazon Dropshipping :

·        FeedCheck: FeedCheck enables you to track and respond to customer feedback through all of your distribution channels. You can easily browse Amazon feedback and provide people with excellent customer service. Additionally, it enables you to track competitors’ product feedback and questions to evaluate and develop your own.

·        App for the Amazon channel: This complimentary Shopify software enables you to monitor your Amazon inventory and fulfill Amazon orders directly from your Shopify admin. Through your Sales Overview and Analytics pages, you can easily build Amazon listings for your Shopify products, manage inventory, and track sales. This eliminates the need for you to exit Shopify to sell in multiple marketplaces.

·        Sellery: This real-time Amazon repricing software helps you develop repricing strategies that allow you to win the Buy Box and automatically increase sales and profits. The trial edition is completely free to download and install. After that, you can upgrade to a paid plan for 1% of your gross monthly revenue. The monthly minimum is $50.

·        Merchant Words: This program can be used to determine the number of searches and data associated with particular keywords. Monthly subscriptions begin at $29.99.

·        Seller.Tools: This application assists you in automating your Amazon Dropshipping company. You can use a feature-rich keyword manager, PPC management tool, product analysis tool, and marketing automation tool built on the ManyChat platform. You can download Messenger marketing workflows for rebate delivery, promotion counters, and automated review captures, among other things, to help you quickly develop your Amazon business.

Having your online store and running a Dropshipping business

As an alternative to selling products through third-party websites of that kind, such as Amazon and eBay, you can open your online store. This is the approach that most people who are keen to start a successful Dropshipping business take.

Pros

Mobile-friendly: Offering on eBay and Amazon from your phone can prove challenging. If you create your online store with a reputable hosted eCommerce platform, your site will undoubtedly be responsive. That’s to say; it will look fantastic on an iPad or mobile phone. This is becoming particularly relevant as mobile devices account for nearly 30% of all online transactions.

Still, other online store platforms, including Shopify, allow you to manage your entire business from your phone. This is especially appealing to Dropshipping business owners, who almost always choose to run their operations on the go or even on the beach.

Increased control: Through your online store, you can create a shopping experience that promotes your products’ sales while also adding value to your customers. You can change the look and feel and build personalized product pages configured to provide the most information to your customers.

There are no hidden fees: Users won’t even pay eBay or Amazon 10% to 15% on each sale, significantly increasing the profit margins. Overall, starting your shopping business with an online store will allow you to earn more money.

Simple design: Creating your eCommerce store is simple, especially with platforms like Shopify. Quickly choose a store template from hundreds of available choices, make any customizations you want, add your products, and link a payment gateway to get started. Based on the nature of the online store you choose to create, you might complete all the designs in a single day.

A legit, viable business: You will build a long-term company with a distinct identity, possibly the best experience, and repeat customers. Most notably, you would be creating a business with your resources. A business based on an independently owned website is much easier to sell.

Dropshipping vendor options: Because you run your own Dropshipping business, you can connect with various wholesalers via platforms like AliExpress, Alibaba, and Oberlo.If you’re conscious about long delivery times, you will find vendors who use ePacket shipping to expedite the shipping process and get your products to customers faster.

Limitations

Reduced fee traffic: You’ll be in charge of driving traffic to your website using marketing, social media, SEO, and paid ads, and there will be an additional expense, be it in terms of money or time, and you must be ready to spend in a long-term campaign to promote your new store.

Use Shopify to advance your online business.

Whether you’re a novice or a seasoned entrepreneur, Amazon Dropshipping can be a way to maximize sales for your business. Suppose you decide to use this Dropshipping approach in your Shopify store. In that case, we have all the resources you need to guide you with Dropshipping delivery, sourcing, pricing, and marketing—don’t forget to check with our top Dropshipping hacks as well. As a result, you will be a much more efficient and effective online retailer while still living the life you’ve always desired.

A final thought on Amazon Dropshipping 

Amazon purchases products in bulk from manufacturers mostly based in Europe. The average margin for Dropshipping is 10% to 30%. Amazon takes around 15% of the top-line revenue.

Amazon-to-eBay dropshippers are legal, but platforms and even consumers usually disapprove of them. And because mobile devices account for nearly 30% of all online transactions, Shopify can help you manage your entire business from your phone. Shopify empowers you to streamline shipping, sourcing, pricing, as well as marketing.

With our customized stores, perceiving what works becomes a thing of the past. No more fussbudget; on your part, all that's needed is to replicate one of the successful stores and start bringing in money.

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