2020 Guide: Dropshipping On Amazon - Here's How To Get Started

2020 Guide: Dropshipping On Amazon – Here’s How To Get Started

Amazon

2020 has been a year equivalent to a roller coaster ride. I’m sure you will agree with me. However, it has been a boon for any eCommerce business. The reason being; the world has switched online. Adding to this, there is no doubt that when we say eCommerce Platform, the first name that comes to our minds is Amazon. While dropshipping is an eCommerce business model chosen by many online sellers, how about Dropshipping on Amazon instead? Sounds like a plan right?

In this guide, we will take you through the step-by-step method of how you can dropship on Amazon, strategies to implement, and what are its benefits.

Why Amazon Dropshipping?

Dropshipping

Back in 2019, almost 160 Billion dollars, which is approximately half of Amazon’s revenue was through various third-party sellers. As per data by JungleScout, 86% of sellers have profited while selling on Amazon. Additionally, Amazon sellers earn anywhere between $26,000 – $810,000 in a year as profits.

Amazon is a go-to eCommerce platform for many dropshippers. Few of the reason why one should sell on this giant marketplace is due to the low investment costs, quick and easy store building and exposure to many online shoppers.

Before, we understand the key areas of selling on Amazon, lets understand what is dropshipping. Dropshipping is nothing but selling via a supplier’s product and earning commissions. the main focus of a dropshipper is to grow a business via different online marketing tools. Dropshippers do not have to store, ship, or manage inventory, rather just sell via their own store.

Process of Selling via Amazon

The process of selling on Amazon is similar to the process of Dropshipping. A customer places an order, and as a dropshipper, it is transferred to the supplier or distributor, and the fulfillment procedure is carried on. Its that simple, just 3 steps. The consumer buying the product doesn’t know whether the supplier is selling the product or the dropshipper.

Selling on Amazon is diverse. There are more than 27 product categories to choose from. Topping the table is Home and Kitchen product category, which accounted for 43% sales last year.

On Amazon, one of the popular methods of dropshipping is Print-On-Demand. This is a type of dropshipping caters to products such as t-shirts, mugs, and other accessories. Here, customers customize their products based on the requirement. It is then fulfilled by dropshippers via suppliers. One does not need an inventory and the order is placed only once the transaction has been made.

Currently, there is more than one type of seller on Amazon. Each one is different with respect to their skill sets or background. Also, the nature of the business of selling on Amazon is diverse. Some are small scale businesses with a few products to sell, while others have a wide range of products. Some even have their own eCommerce business and use Amazon as a dropshipping medium to expand their reach. Let’s take a look at some of the benefits while selling on Amazon.


Benefits of Amazon Dropshipping

The dropshipping eCommerce model accounted for almost 23% of online sales back in 2017. This valued for $85.1 billion dollars. Compared to eCommerce manufactures and retailers, those who participate in dropshipping are 50% profitable than the common retailers who are dependent on an online inventory.

Listed below are the other benefits of an eCommerce Dropshipping Business:

Zero or Low Investment Costs

When you dropship, you need no inventory. This calls for a reduction on any kind of inventory or warehouse costs. Additionally, when one chooses the FBA (Fulfilled by Amazon) program, you need not worry about the shipment too. As the sellers ship the products to Amazon, and the eCommerce platform sends the product on behalf of the dropshipper.

Quick Start

Dropshipping on Amazon can be done in just a few clicks. The easiest way to do it is to have a Shopify store and link it to Amazon Sales Channel. Apart from this, the website will ask you for basic contact and background information along with your product details and company data. This is to ensure that everything sold is legal and secure. Apart from that, the payment gateway is quick and secure, moreover has gained consumer trust for years now.

Automated and With Zero Errors

Being a dropshipper on Amazon is a fully automated process. This calls for lesser errors as the only manual work it to enter tour profile and account details. Also with clicks, the order is converted into sales and you are given your margin for selling the product.

Cross-Border Selling

Through selling on this eCommerce platform, one is assured to meet global expectations. At time its either the supplier or the customer who is overseas. Here, although communication gaps may exist, however, you are certain for an expansion of a wider audience.

Larger and Wider Audience

Amazon is a huge eCommerce platform with global recognition. Currently, Amazon has more than 2.5 million sellers, and every year another 1 million sellers join the website. Well, the number of sellers is definitely less than the number of buyers, and that is more than enough for an eCommerce seller to sell on Amazon for global exposure and a wider reach.

Advertising and Marketing is Cost-Effective

While one dropships through Amazon, you can consider various marketing tools to gain organic traffic. One of which is Amazon Ads. The prices you put on these ads are not fixed and can be altered by you, yourself. Additionally, considering the wide audience who shop on Amazon, you are sure to gain organic engagement, and if done right, convert them into sales.

Drawbacks to Dropship on Amazon

Competition Analysis

With so many benefits comes certain drawbacks. While everything seems easy and too good to be true, here are few reasons to consider before you dropship on Amazon.

Fulfillment by Amazon

While one can dropship on Amazon, it isn’t in a direct way. There are certain restrictions that the eCommerce platform. One of which is Amazon allows one to dropship via a program called Fulfillment by Amazon (FBA). In this method, a seller transports its products to the Amazon warehouse. The eCommerce platform then stores the inventory and then ships it to the customer.

High Competiton

Amazon is one of the most popular eCommerce marketplaces across the globe. Hence, each and everyone considers buying and selling in this marketplace. This paves the way for higher competition. Also, there are almost zero barriers to dropship with Amazon, giving all the more reasons for business owners to sell various types of products. Here, some maybe even selling identical products like you.

Delay in Delivery

Amazon is available across every country in the world. Hence, many suppliers may not be within your customer’s geographical boundary. This opens doors for delayed deliveries as shipping from hundreds of miles away may costs days or sometimes even months to deliver.

Unsure About The Product Quality

When you dropship, either within your business or via Amazon, you are dependent on the customer. Hence you have zero control on the quality of the product. You are unaware of the product delivered to the customer. While your brand logo or business information doesn’t appear on the product, you still are the point of contact. Hence, if the quality is good the brand name gains reputation, while on the other hand if the quality is bad, well you will be answerable.

Dropshipping Amazon – Your Step-By-Step Guide

Now that you have skimmed through the pros and cons of dropshipping, let’s take a look at how can one get their hands over this dropshipping platform. Here is a step-by-step guide of how you can get started:

Find a Supplier and Create a Seller Account

Your first step to dropshipping on Amazon is finding the right supplier. This can be done through various selling websites such as Ebay or other local suppliers. Post which you can go ahead and set up your account. The nature of this account will be a seller account.

The nature of the seller account depends on the volume of products you would be selling. An individual selling plan charges around 0.99 cents (73.45 INR) for every product sold. Well, that’s enough to empty the profit margin earned leaving you with an empty briefcase. On the other hand, a professional account costs a minimal subscription fee every month. This is done on Amazon Seller Central.

Ensure The Product Category Is Approved

Amazon Dropshipping
Amazon Seller Central
Source: Amazon Seller Central
Source: Amazon Seller Central

Once you have chosen the right supplier and have signed up with basic profile information, you can then start choosing your product category. If you have a product that doesn’t need a second approval to follow this procedure:

  • Find the item your selling on Amazon
  • Ensure that the format and information is correct
  • Next is to select the “Sell Yours Here” button
  • Give a detailed description of the product
  • Post that you can set your price and other information

Among all the product categories available for dropshipping, there are few products that need Amazon’s prior approval. This includes products under fashion, jewelry, etc. If you get an error while choosing the product category, that means you need a second approval. The steps suggested by Amazon to apply for approval include: 

  • Go on the Inventory menu and select Add a Product
  • Find the product category for the item you want to sell
  • On the search results, you have to click on the Listing limitations apply link which is next to the selected product.
  • Ask for Approval by clicking on the Request Approval button
  • Begin the application process as suggested

Once you have set the account on Amazon Seller Account, the step it to link it with Shopify. Just click on the left bar of your Shopify account. once you scroll down you will find the Sales channel. Click on the + icon next to it. Next click on the ‘Learn More’ button next to Amazon by Shopify. Lastly, select ‘Connect to Amazon’.

Dropshipping
Oberlo

Create Amazon Product Listings

Your next step is to create product listings on Amazon. The steps to follow are:

  • Go to Seller Account
  • Add A Product
  • Click on New Product Listing

As a dropshipper, you need to follow the same process, how instead of purchasing UPC codes, you will have select on the other option. this states that you do not make the product yourself, rather another brand makes it for your selling. Search for that particular product and become a seller of that item. Select the product once you have found it and publish your product. Congratulation! Your product has been listed.

On completion of all the five steps, its now time to market your Amazon store and engage with potential prospects. For marketing purposes, you can upgrade to the Amazon ads where a click brings the customer to your store.

Dropshipping on Amazon can be profitable especially in the year 2020 if done with the right approach. Additionally, a trusted logistics platform can ensure that the product sold by you via the supplier is quick, safe, and follows a smooth delivery process. Hence, Dash101 at your perfect choice. Here you can ship hassle-free and deliver to more than 26000+ Pin codes. This means you will not just get profits but also a superior customer experience, which will make your customers come back for more. 

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