How to Dropship on Amazon: A Beginner’s Guide

Elena Hudgens
By Elena Hudgens 19 Min Read

If you’re looking for a way to start an online business without the hassle of managing inventory, dropshipping on Amazon might be the perfect solution for you. With dropshipping, you can sell products without having to hold any inventory or handle shipping to customers. Instead, you work with a supplier who fulfills the orders on your behalf.

To get started with dropshipping on Amazon, the first step is to choose the right products to sell. Look for products that are in high demand and have a good profit margin. You can use Amazon’s Best Sellers list or do market research to find products that fit these criteria. Once you have a list of potential products, you can start looking for suppliers who can provide them at a competitive price.

Once you’ve found a supplier, you’ll need to set up an Amazon seller account and get approved in your product category. You’ll also need to make sure you’re the seller of record for the products you’re selling and follow Amazon’s rules for dropshipping. With these steps in place, you can start promoting your Amazon store and building your business.

How to Dropship on Amazon

Understanding Dropshipping on Amazon

If you’re looking to start an online business, dropshipping on Amazon can be a great option. In this section, we’ll cover what dropshipping is, why you should consider dropshipping on Amazon, and Amazon’s dropshipping policy.

What is Dropshipping?

Dropshipping is a retail fulfillment method where a store doesn’t keep the products it sells in stock. Instead, when a store sells a product, it purchases the item from a third party and has it shipped directly to the customer. As a result, the merchant never sees or handles the product.

Why Dropship on Amazon?

There are several reasons why you might want to consider dropshipping on Amazon. First, Amazon is one of the largest e-commerce platforms in the world, with millions of customers actively searching for products to buy. This means that there is a huge potential customer base for your products.

Second, Amazon’s Fulfilled by Amazon (FBA) program makes it easy to manage your inventory and shipping. With FBA, Amazon handles all of the logistics, including storing your products, picking and packing orders, and shipping them to customers. This can save you a lot of time and hassle.

Finally, dropshipping on Amazon can be a low-risk way to start an online business. Since you don’t need to purchase inventory upfront, you can test out different products and niches without a significant financial investment.

Amazon Dropshipping Policy

If you’re dropshipping on Amazon, it’s important to understand Amazon’s dropshipping policy. Amazon allows dropshipping, but there are a few rules you need to follow:

  • Always be the seller of record for products.
  • Identify yourself as the seller on packing slips, invoices, and other information in connection with products.
  • Be responsible for accepting and processing customer returns of your products.
  • Comply with all other terms of your seller agreement and applicable Amazon policies.

In addition, Amazon prohibits dropshipping from another online retailer or marketplace, such as Walmart or eBay. This means that you cannot purchase products from another online retailer and have them shipped directly to Amazon customers.

By following Amazon’s dropshipping policy, you can ensure that your business stays in good standing with Amazon and that you’re providing a high-quality experience for your customers.

Getting Started with Amazon Dropshipping

If you’re interested in starting an Amazon dropshipping business, there are a few key steps you’ll need to take to get started. Here are some of the most important things to keep in mind:

Setting up an Amazon Seller Account

The first step in getting started with Amazon dropshipping is to set up an Amazon seller account. This will allow you to list products for sale on Amazon and start accepting orders from customers. To set up your seller account, you’ll need to provide some basic information about yourself and your business, including your contact information and tax identification number.

Researching and Choosing a Product Category

Once you’ve set up your Amazon seller account, the next step is to research and choose a product category to focus on. This is an important step, as the products you choose to sell will have a big impact on the success of your dropshipping business. Spend some time researching different product categories to find one that has a high demand and low competition.

Finding a Supplier

Once you’ve chosen a product category, the next step is to find a supplier who can provide you with the products you need to sell on Amazon. There are a few different ways to find suppliers, including using online marketplaces like Alibaba or contacting manufacturers directly.

Contacting and Negotiating with Suppliers

Once you’ve found a supplier, the next step is to contact them and start negotiating the terms of your dropshipping agreement. This will involve discussing things like pricing, shipping times, and minimum order quantities. Be sure to negotiate these terms carefully to ensure that you’re getting the best possible deal.

Creating Product Listings

Once you’ve established a relationship with a supplier, the final step is to create product listings for the products you’ll be selling on Amazon. This will involve writing product descriptions, taking photos, and setting prices. Be sure to optimize your listings for search engines to maximize your visibility on Amazon.

By following these steps, you can get started with Amazon dropshipping and start building a successful online business.

Managing Inventory and Fulfillment

When it comes to dropshipping on Amazon, managing inventory and fulfillment is a crucial aspect of your business. In this section, we’ll cover everything you need to know about managing your inventory and fulfilling orders on Amazon.

Inventory Management

Inventory management is the process of tracking your inventory levels and ensuring that you have enough stock to fulfill orders. When dropshipping on Amazon, it’s important to keep track of your inventory levels to avoid overselling or running out of stock.

To manage your inventory effectively, you can use inventory management tools like Spark Shipping or Skubana. These tools can help you track your inventory levels, set up low inventory alerts, and automate your inventory management.

Order Fulfillment

Order fulfillment is the process of receiving and processing orders, picking and packing products, and shipping them to customers. When dropshipping on Amazon, you’re responsible for fulfilling your orders and ensuring that they’re delivered to your customers on time.

To fulfill your orders, you can use Amazon’s Multi-Channel Fulfillment (MCF) service or fulfill orders manually. With MCF, Amazon will pick, pack, and ship your products to your customers on your behalf. If you choose to fulfill orders manually, you’ll need to pick and pack your products and ship them to your customers yourself.

Packing and Shipping Products

When packing and shipping your products, it’s important to ensure that they’re packaged securely and that they arrive at your customers’ doorsteps in good condition. You can use Amazon’s guidelines for packing and shipping products to ensure that your products are packaged and shipped correctly.

To save time and streamline your packing and shipping process, you can use tools like ShipStation or ShipWorks. These tools can help you print shipping labels, track shipments, and automate your shipping process.

Amazon Fulfillment by Amazon (FBA)

Fulfillment by Amazon (FBA) is a service offered by Amazon that allows you to store your products in Amazon’s fulfillment centers. When you receive an order, Amazon will pick, pack, and ship your products to your customers on your behalf.

FBA can be a great option for dropshippers who want to outsource their fulfillment process and focus on other aspects of their business. However, it’s important to note that FBA comes with fulfillment fees and storage fees.

In conclusion, managing inventory and fulfillment is a crucial aspect of dropshipping on Amazon. By using inventory management tools, fulfilling orders on time, packing and shipping products correctly, and considering FBA, you can streamline your fulfillment process and ensure that your customers receive their orders on time.

Marketing and Selling on Amazon

Creating a Brand and Building a Presence

When dropshipping on Amazon, it’s important to establish a brand and build a presence to stand out from competitors. You can create a brand name and logo that represent your business and products. You can also customize your Amazon store with your brand colors, images, and descriptions to create a unique shopping experience for your customers.

Building a presence on social media platforms such as Facebook, Instagram, and Twitter can also help increase your brand awareness and attract potential customers to your Amazon store. You can share your product images, promotions, and customer reviews on social media to engage with your audience and build a loyal following.

Marketing Your Products

Marketing your products is crucial to drive traffic and sales on Amazon. You can use Amazon’s advertising tools such as Sponsored Products, Sponsored Brands, and Sponsored Display to promote your products to relevant customers and increase visibility.

You can also optimize your product listings with high-quality images, detailed descriptions, and relevant keywords to improve your search ranking and attract more customers. Encouraging customer reviews and ratings can also boost your credibility and attract new customers.

Selling on Amazon

Selling on Amazon comes with its own set of policies and guidelines that you need to follow to avoid suspension. You need to ensure that your products are eligible for Amazon’s marketplace, and you need to comply with Amazon’s product listing policies and guidelines.

You also need to choose the right fulfillment method for your business, whether it’s Fulfillment by Amazon (FBA) or Fulfillment by Merchant (FBM). FBA can help you streamline your fulfillment process and improve your customer experience, while FBM gives you more control over your inventory and shipping.

Customer Service and Policies

Providing excellent customer service is crucial to maintaining a positive reputation and attracting repeat customers on Amazon. You need to respond to customer inquiries and issues promptly and professionally, and you need to ensure that your products meet customer expectations.

You also need to comply with Amazon’s policies and guidelines, such as its anti-counterfeiting policy, customer product reviews policy, and product return policy. Violating these policies can result in account suspension, so it’s important to stay informed and compliant.

Returns and Refunds

Handling returns and refunds can be challenging, but it’s important to provide a hassle-free experience for your customers. You need to clearly communicate your return and refund policies on your product listings and Amazon store, and you need to process returns and refunds promptly and professionally.

You also need to ensure that your products are in good condition and meet Amazon’s return policy requirements. Providing excellent customer service and handling returns and refunds promptly and professionally can help improve your customer satisfaction and reputation on Amazon.

Maximizing Profit and Scaling Your Business

As you start to see success with your dropshipping business on Amazon, you’ll want to start thinking about how to maximize your profits and scale your business. Here are some strategies to consider:

Wholesale and Quality Control

One way to increase your profit margins is to source products at wholesale prices. This allows you to buy in bulk and get a better price per unit. However, it’s important to ensure that you’re getting high-quality products that meet your customers’ expectations. Consider doing quality control checks on your products before shipping them to customers.

Profit Margins and Overhead Costs

To maximize your profits, it’s important to keep a close eye on your profit margins and overhead costs. Make sure you’re pricing your products competitively while still leaving room for a healthy profit margin. Keep your overhead costs low by outsourcing tasks like customer service or using tools to automate your business processes.

Multi-channel Selling

While Amazon is a great platform for dropshipping, it’s not the only one out there. Consider expanding your reach by selling on other platforms like eBay or Etsy. This can help you reach new customers and increase your overall sales.

Amazon Fees and Profitability

It’s important to keep in mind that Amazon charges fees for using their platform. These fees can eat into your profit margins, so it’s important to factor them into your pricing strategy. Consider using Amazon’s FBA (Fulfillment by Amazon) service to save on shipping costs and streamline your business operations.

Here’s a breakdown of some of the fees you can expect to pay on Amazon:

Fee TypeCost
Referral Fee6-45% of the item price
Variable Closing Fee$0.45-$1.35 per item
FBA FeesVaries by item size and weight

By keeping these fees in mind and adjusting your pricing strategy accordingly, you can ensure that your dropshipping business on Amazon remains profitable.

Frequently Asked Questions

How to start dropshipping for free?

To start dropshipping for free on Amazon, you can use the Amazon Individual Seller Account. This account type is free to sign up for, and Amazon charges only a small fee for each item sold. However, the Individual Seller Account has some limitations, such as the inability to use Amazon’s fulfillment services.

Is dropshipping on Amazon profitable?

Yes, dropshipping on Amazon can be profitable. However, it depends on several factors, such as product selection, pricing, marketing, and competition. You need to research and analyze the market carefully to find profitable products and optimize your strategy to maximize your profit margin.

How much does it cost to dropship with Amazon?

The cost of dropshipping with Amazon varies depending on several factors, such as the product cost, shipping cost, Amazon fees, and marketing expenses. Amazon charges different fees for different services, such as referral fees, fulfillment fees, storage fees, and advertising fees. You need to calculate your costs and profit margin carefully to determine your pricing strategy.

Is dropshipping allowed on Amazon?

Yes, dropshipping is allowed on Amazon, but there are some rules and policies you need to follow to avoid suspension. For instance, you must be the seller of record, and you must not purchase products from another retailer on Amazon. You also need to provide accurate and timely shipping and tracking information and handle customer service and returns.

How to dropship for beginners?

To dropship for beginners on Amazon, you need to follow some basic steps, such as:
1- Find profitable products: Research the market and identify products with high demand and low competition.
2- Choose a supplier: Find a reliable supplier who can provide quality products and timely shipping.
3- Set up your Amazon account: Create a seller account and optimize your product listings with attractive titles, descriptions, and images.
4- Price your products: Set your prices competitively and calculate your profit margin.
5- Market your products: Use various marketing channels to promote your products and drive traffic to your listings.
6- Manage your orders: Fulfill your orders promptly and provide excellent customer service.

Is Amazon dropshipping hard?

Amazon dropshipping can be challenging, especially for beginners. It requires a lot of research, planning, and execution to find profitable products, optimize your listings, and manage your orders effectively. However, with the right strategy and mindset, you can succeed in dropshipping on Amazon.

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Elena Hudgens is an entrepreneur with 10+ years of experience. She started her journey by building her own e-commerce website on Shopify and turned her $1000 savings to millions in just 2 years. Soon she started different ventures in which she failed and succeeded. And now, she's on a mission to help other entrepreneurs with her life and business lessons.
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