You should have heard about Amazon Dropshipping in 2023 when looking for ways to earn money by selling online.
Curiosity arises when one starts searching about amazon dropshipping and sees how much people are making selling on amazon.
According to Business Insider, Amazon has over 300 million active users worldwide and 151.9 million active prime members in the USA alone in 2021.
Let us dig in and learn how to do amazon dropshipping.
What is Amazon?
Before digging in, it’s important for you to learn some back history of Amazon. Founded in 1994, Amazon is an e-commerce giant with a worldwide presence. It sells products directly to consumers through its website and has an extensive third-party marketplace. The fulfillment by Amazon (FBA) program was launched in 2005 and later expanded globally.
Now we can talk about what dropshipping is.
What is Dropshipping?
Dropshipping is a strategy to sell products from your eCommerce website directly to customers. This business model allows merchants to sell their goods without having extensive inventories or storage facilities.
It is ideal for sellers who have no desire to handle large orders or keep up with inventory.
Below is an overview that shows you how dropshipping flow works.
Is it legal to Dropship on Amazon?
While doing dropshipping on Amazon, the first thing that arises in mind is whether it is legal.
This is an obvious question while working on Amazon.
Nobody wants to do Illegal work.
The answer to the above question is it legal to dropship on Amazon is Yes.
One can do dropship on Amazon as long as you play by the rules. Which are as follows:
- One must be the seller of the record. This means you should have proof that you shipped out the package yourself, not by any other means.
- Recognize yourself as the seller of your items on all slips and other data included.
- Be liable for tolerating and handling client returns of your items.
Reading the Amazon Dropshipping policy is a must before you start selling on Amazon.
Let us go further and learn what the cost is to dropship on Amazon so that one could know how much budget is needed to start selling.
Cost to Dropship on Amazon?
Understanding the fee structure is a must before starting.
To sell on Amazon, you would need to signup as a seller.
The choice is yours. You can sign up as an individual and pay a $0.99 extra fee per order or a $39.99 per month to list as much as you want without paying any additional units sold cost.
Advantages of signing up as a Professional Seller on Amazon:
- No listing limitations
- You get to sell more than 40 units per month
- Get access to Amazon Advertising
- Get access to advanced tools, like APIs and report
- Get to sell in additional categories
- Set your shipping rates and many more things.
Amazon has a referral fee for selling on its platform.
The percentage is usually between 10% and 15%.
This refers to a percentage of your product sales from people who found your products through Amazon or recommended you to other buyers.
To know how much budget you need, keep reading further.
To start selling on amazon, you only need a small budget, but to find products, you would need help from many tools.
You only pay for an item when you get an order.
Following the Amazon dropshipping guidelines, you can start from as low as $300 and scale to as much as you like.
Is Amazon Dropshipping Profitable?
Amazon dropshipping is a popular way to earn extra money.
It’s also a common question:
How much is it profitable?
How much you can earn from it depends on what you’re selling.
Now let’s talk about how much you can make from Amazon dropshipping.
This will vary depending on the product, its market niche, and your marketing skills.
If you sell a best-seller with low competition and high demand, you can earn more than $1 per sales transaction.
If your product isn’t popular or doesn’t sell well, it won’t be as profitable for you.
The most beneficial products usually address a particular need or serve a specific audience.
If you get a Buy Box (Featured Offer) on amazon, there is a high chance that your sales and profits will increase a lot, but it’s highly competitive and not something to follow at the start.
Where there are benefits, there are drawbacks as well. Let’s continue further to learn about them.
Benefits and Drawbacks of Amazon Dropshipping?
Benefits of Dropshipping on Amazon
Amazon dropshipping can help you grow your business by providing you with a large audience, multiple categories, and no warehouse cost.
Large Audience:
Amazon has a massive user base and is the number one retailer in the world.
If you’re looking for an audience-wide audience, there is no better place than selling on Amazon.
Multiple Categories:
When you sell on Amazon, you can choose whether or not to list products in multiple categories (such as Kitchen, Beauty, Sports, and Electronics).
This means that if you have a product that doesn’t fit into any specific category, it will still be listed on Amazon.
No Warehouse Cost:
The costs associated with storing inventory and packaging come out of your pocket—there are no warehouse fees or storage fees!
Multiple Suppliers:
You don’t have to deal with all of your suppliers at once!
Using Amazon dropshipping, you can work with multiple suppliers and store their products in separate warehouses so they can be shipped from one location instead of yours—saving time and money along the way!
If you are interested in saving money and generating more revenue, Amazon dropshipping is for you.
These many benefits should be good. Let us discuss some drawbacks of dropshipping on Amazon.
Drawbacks of Dropshipping on Amazon
Here’s a quick rundown of why you might want to consider other options:
Low Profit Due to Competition:
Selling on Amazon should seem the right option for you, but in the long run, you fill many difficulties.
Like not being able to find profitable products.
High Competition with other sellers and already established vendors having a customer base.
Not winning buy box and low sales.
Inventory not in control:
With dropshipping on Amazon, you must control all aspects of the inventory.
If you’re not careful, you could also face issues with inventory management.
Due to the nature of logistics, you won’t be able to control how much stock is available.
This means that if something goes wrong with your product (for example, it might break- or a customer may not receive their order on time), any delays could lead them refunds from Amazon.
Shipping Delays:
Delays are common because the fulfillment center cannot precisely know when packages will arrive at their destination, so they’ll often delay them by a few days or weeks.
These were the drawbacks one would face when jumping into an Amazon Dropshipping business.
Were you feeling scared? No, do not worry.
When dropshipping on Amazon, you must provide quality customer support to address all these issues.
Do not let these shortcomings stop you from selling on Amazon.
Just keep in mind to follow Amazon’s Dropshipping policies, and you will be successful in your dropshipping business.
Let’s move forward with Amazon Dropshipping.
How to start an Amazon Dropshipping Business?
After knowing this much regarding Amazon’s dropshipping business.
Let us now focus on how to start our business and what things are required.
- Create a seller account
- Find products to sell
- Request approval from Amazon to sell
- Select your vendor
- List products in your store
Creating a seller account
Creating an Amazon seller account is the first of many steps you will take when starting your own e-commerce business.
You’ll need to provide some basic information about yourself and some of your products, but don’t worry—it’s pretty easy!
All you have to do is click “Start Selling” and follow the instructions.
You will be asked to provide information about your business, including its address, tax details, and other identity-related documents.
If you sign up as a professional seller, Amazon will charge your credit card $39.99.
If you are an individual seller, however, and only sell one item per month (so not worth the fee), then it’s free for that period but when you do finally meet the minimum requirement—and become eligible for extra features like inventory management tools—then start paying $0.99 per item sold on top of this initial setup cost.
Find products to sell
Once you’ve created an account, the next step is to search for products on which to sell.
You can enter keywords that relate to or describe your product.
For example, if you’re selling dog food, type in “dog food” and see what comes up.
Here are some strategies that will help you get started:
Build a year-round business by specializing in products that people need all the time.
Products that are both obscure and useful tend to be more successful.
Register yourself with the Dailydealsco reseller program and get the ability to find suitable products.
Request approval from Amazon to sell
To be eligible to sell your product on Amazon, you must meet certain requirements and follow specific rules.
Take a look at Amazon’s list of restricted products to make sure you don’t sell any of them.
If you want to sell them, you must get Amazon’s approval.
Once you have found products that interest you, go to your Seller Central dashboard and search for those ASINs.
Then click “Request Approval” (just below “Sell Yours Now > Apply Now”).
Additional category guidelines to list and sell products in these categories.
Select your Vendor
Look for a vendor who sells what you want and asks if they can partner with you.
You can contact them directly or use the form on their website; either way will get results!
If they do have concerns, ask them to explain what their issues are so that you can address them before the marketplace launch.
Once you’ve found a vendor with the products you’re looking for and stock available, it’s time to choose which of their items will work best as dropshipping goods.
You’ll want to find an Amazon dropshipping supplier with the following qualities:
- Products you want to sell
- Fees associated with membership
- Good wholesale pricing
- Fast shipping
- Helpful tools for turnkey success
- No brand name (make sure they don’t have any branding on their packaging)
DailyDealsco offers a fantastic selection of premium, specialty, and gourmet goods, focusing on natural and organic products.
List products in your store
Once you’ve found a vendor, it’s time to list items in your store!
This is where all the magic happens.
You’ll need to determine which products will be sold, how much each item costs, and when customers can purchase it.
Also, ensure that there is enough of each product for sale.
Keep in mind that customers should be able to quickly find the products you sell using Amazon’s search function (or “buy”).
Five Tips for Building a Successful Amazon Dropshipping Business
Now that you’ve seen how profitable Amazon dropshipping can be, let’s discuss the steps to success as an online retailer.
Of course, starting a dropshipping business on Amazon is easy.
But succeeding with dropshipping on Amazon takes work—and patience too.
These five tips will help you succeed with dropshipping.
Winning the Buy Box
83% of all sales made on Amazon come through the “Buy Box,” where sellers are displayed with the ADD TO CART next to their name.
Your goal as a dropshipper is to win the Buy Box to maximize your profits as an experienced seller would.
It’s not enough to sell your products.
You need to ensure that people searching for those products will find them, which means having a high seller rating and appearing in the buy box.
To get your product into this coveted spot, ensure it’s both high-quality and well-priced.
Anything less than a 95% seller rating will do little to help your chances of getting listed in Amazon’s search results.
So, keep that in mind when pricing items!
Choose A Promising Dropshipping Supplier
Building a successful business on Amazon is no easy task.
You’ll need to find the right supplier for your dropshipping needs, and not only that—you have to make sure you choose one who will be able to meet future demand by providing adequate quantities of products at competitive prices.
Once you have compiled a list of possible suppliers, ask them the following questions:
- What are the costs?
- How can I sign up for this program?
- What fees will I have to pay?
- Will the supplier also sell in bulk as a wholesaler—or do they drop ship directly to my customers and me without connecting with wholesale suppliers themselves (this is good)?
- Can they guarantee customer satisfaction and offer refunds if needed—and how long do we have to return something after purchase before it becomes too late?
After asking these evaluate them on the above and the following:
- How’s their customer service?
- Are they available 24/7?
- How much inventory do they hold for each product, and so on—these are all factors that affect how long you will have to wait before your products arrive.
By taking a comprehensive approach to analyzing the pros and cons of your options, you will be able to make the best possible decision for your store.
Know What to Buy and Then Set the Price
When starting your business, choosing a niche (a specific type of product or service) with low competition and high volume is typically best.
Many customers want what you’ve got, but not many others are selling it.
When choosing products for your dropshipping business, make sure to consider things like:
- How well does this product sell?
- Can I make a 10% – 20% profit margin from this?
- Is it bulky or small?
- How much shipping will it costs me if I choose it?
- How many different sellers can you compete against?
- Is there enough demand for this product on Amazon?
There might be plenty of people willing to buy from you without having to go through all the trouble of setting up an entire eCommerce store.
Each option comes with its own set of advantages and disadvantages.
If you choose to sell well-known brands, however, you might have trouble competing with large retailers offering lower prices and quicker shipping times than your small business is likely able to provide.
Keep your Prices Low
Although selling on Amazon makes it possible to earn a profit, you can’t charge more for your product than other sellers are charging.
You aim to become competitive to attract customers and ensure that each sale doesn’t lose money.
To stay competitive, you must set your retail prices at a level where you can still make a profit—usually between 10% and 20%.
Strengthen Your Reputation as a Seller
Your reputation as an Amazon seller is essential to your success.
The more customers trust and buy from you, the more likely they will make repeat purchases.
You want people to enter the store thinking, “Wow! They’re selling some cool stuff!” and not a nod of recognition when seeing you.
You’ll need to educate your potential customers about your product or service so they feel confident about their purchase.
If you sell a product similar to one that has already proven itself, people will trust your claims about the new product and be willing to pay more for it than they might otherwise.
Consistency
It’s essential to be consistent with your product listings, reviews, and content on your different platforms—Amazon, eBay, etc.
People will notice if you only focus on one platform but stop doing everything else.
Keep it current
A brand that appears to have been left behind by time is not one that customers will trust!
Update your page with new photos or videos every few weeks or months (depending on how much work this requires).
Sellers should have a professional website because an attractive presence can build trust among potential buyers.
Advertise your Amazon Dropshipping Business
To build a successful Amazon dropshipping business, you must advertise.
You can use social media platforms such as Facebook, Twitter, and Instagram to spread the word about your book.
You may also want to promote your work on blogs or other sites that attract similar audiences.
Effective ad campaigns target consumers most likely to purchase the product.
- Create a website to showcase your work – Building a successful Amazon drop shipping business starts with creating a high-quality website.
- This will help you attract new customers who want to buy from you instead of other sellers on Amazon.
- Make your price policies clear – One of the most important decisions a website owner can make is setting product prices in different categories.
- It’s common to believe that higher-priced items are better than lower-priced ones, but this isn’t always true!
- It’s critically important for sellers on Amazon to have transparent policies so that customers can easily understand how much they’ll pay.
Start Your Dropshipping Business Today with DailyDealsCo!
The choice is clear: work with DailyDealsco to build a profitable Amazon store.
We’re a wholesaler and dropshipping supplier that will work seamlessly with your Amazon store.
We’ve been in business for a few years, so you can trust us to provide the best quality products at competitive prices.
We offer a wide selection of products with low shipping rates and no additional packaging or fulfillment fees.
You’ll need to find a reliable supplier to succeed in the dropshipping business.
You should ensure that they have these things:
A team of knowledgeable support representatives.
High-quality goods and services that appeal to their target customers.
Tools for tracking inventory, sales, and related business data.
Be prompt, regular, and efficient in the way they handle shipments.
Our warehouses are strategically located throughout the country so that we can deliver orders quickly.
Our company DailyDealsCo also functions as a conventional wholesaler, so you can order bulk products from us and then handle the packaging, storage, and shipping.
You can use our product feeds to quickly and easily add products to your Shopify, WooCommerce, or Amazon/eBay store.
