At the beginning of 2020, searches for “Amazon Dropshipping” hit an all-time high, according to Google Trends. So, if you’re considering dropshipping, you’re certainly not alone. For one thing, the concept of dropshipping is simple.
Whereby, you list products for sale on your site. The products themselves are manufactured and held by a third party. And when someone places an order, the third party ships them directly to the consumer.
The ability to add inventory without having to deal with production, stocking or fulfilling orders may seem like a dream. And the success of well-known brands that were built on dropshipping, like Wayfair, make it all the more tempting.
As of 2020, it has a presence in nearly every consumer-oriented market. Becoming a disruptive force in the retail space.
Furthermore, there are a number of reasons customers have increased their spending on Amazon. Including excellent customer service, competitive prices, fast shipping, wide selection, and effective online digital marketing.
The first step of the Amazon buying process is to go to the Amazon main website and log into your account (if you don’t have one, create one for free).
The website then changes based on your previous searches on Amazon and products purchased. Thus, nearly everyone’s Amazon experience is unique, with a personalized layout.
Once you find a product you want to purchase, click Add to Shopping Cart. From there, once you check out, you are taken to a page where you must enter your shipping and billing information.
And once you enter this information and select your desired shipping option, click the final confirmation button to complete the order. Once a customer submits their order, Amazon’s impressive backend system starts working. Orders from third-party sellers are routed to Amazon, which takes a cut of those sales.
However, most orders go through Amazon’s warehouses, which are spread out across the world. These are stocked based on algorithms that predict the types and number of products being ordered in that region.
These algorithms and fulfillment centers are one of the differentiators between Amazon and other online retailers. They make up the secret sauce that allows the company to consistently deliver faster and offer cheaper prices to customers. The Amazon backend routes the order to the nearest fulfillment center, where a picker finds it.
The product is packed and then placed in a waiting delivery truck, depending on the shipping option. The entire process may only take minutes from when the customer gives a final order confirmation before it is placed in the delivery truck.
What is Amazon Dropshipping?
Amazon 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 using the dropshipping model, it purchases the item from a third party and has it shipped directly to the customer.
And instead, the seller purchases inventory as needed from a third party—usually a wholesaler or manufacturer—to fulfill orders. So to say, dropshipping is a great business model for aspiring entrepreneurs to start with because it’s accessible.
Whether you’re an artist, writer, designer, or entrepreneur, physical products can be the perfect canvas for monetizing your creativity.
From t-shirts to posters, backpacks to books, you can put your own original spin on everyday products and sell them online. However, if you go the traditional route of buying and holding your own inventory, you may be left with a pile of products that aren’t selling.
Amazon Print-on-demand services offer an alternative way to bypass the time, investment, and risk associated with managing inventory, letting you go from creating to selling custom products at a fraction of the cost.
Equally important, Print-on-demand allows you to advertise customized products such as t-shirts, mugs, posters, and even books without purchasing inventory. Then. when the sale is made, the supplier creates the product for you, then ships it. You can learn more about What is “print on demand” and how does it work?
How do Amazon Dropshipping Methods compare?
Important to realize, dropshipping is just one of many methods of starting a business on Amazon.
Wholesaling is when you purchase goods at a bulk rate from a supplier to resell to another retailer or distribute it as a retailer yourself. While on the other hand, private label is a method of manufacturing your own products to sell on Amazon.
As opposed to other popular e-commerce methods like a private label and wholesaling, dropshipping does not require you to own your own inventory.
Instead, when you get paid by the consumer on the sale, you simply turn around and use a portion of the proceeds to purchase the product from the supplier and have them ship it to your buyer.
Because you don’t have to own your own inventory when dropshipping on Amazon, it’s quick and easy to set up. After all, you don’t have to wait for your inventory to be manufactured and/or shipped to the fulfillment location.
It’s ready to go. All you need is a sale!
Fully automated allowing dropship
There are a lot of apps and plugins online that allow you to fully automate dropshipping on Amazon. For this reason, you can be (almost) completely hands-off with your dropshipping business.
And while you may have your own metrics to use for finding such products, I recommend starting with some of the best-known criteria.
Use the following criteria:
100-300 unit sales per month
Set competition to “very low” to “low”
Fix the average monthly price from $20-$35
Set niche score to 7+
This should give you an excellent number of product opportunities to peruse in all categories.
Also, when starting out, I recommend keeping things simple. Housewares, sports & outdoors, and patio, home, & garden are all great categories for beginners because they tend to be low maintenance.
Step Three: Check a site like Aliexpress to see if the product is available
Once you have some product ideas, you will need to find a supplier.
Dropshipping products on Aliexpress is one of the biggest connections. It’s a business-to-business website that puts e-commerce entrepreneurs in touch with suppliers who are looking to dropship their goods.
Just type in the search terms for the product that you are interested in selling and, just like Amazon, a variety of products will come up.
Once you click on one, you’re provided with a number of details. In the above example, you can see that the notebook/agenda planner costs $3.22 with free shipping into the US (and shipping is free).
The seller also offers 60-Day Buyer Protection on the product. (Be sure to note the delivery time, however, which is more than a month out!)
Step Four: Create an Amazon listing
After you have a product idea and a supplier to fulfill that product, you’ll need to create an Amazon product listing.
From your Seller Central account, go to Inventory > Add a product. When the Add a Product screen comes up, click “Create a new product listing.”
First, you will need to choose your product category.
Then, once you’ve done that, you’ll have to fill out the information for the listing itself.
When setting a price for your Dropshipped Product don’t forget to account for Amazon’s fees. If you are a professional seller, you will pay a referral fee of 8-15% depending on the category. Individual sellers pay an additional $1.00 per sale, too.
You can learn more about Amazon’s fees by category on their Selling on Amazon fee schedule. And finally, as soon as you’re ready, you can publish your listing and start making sales.
Hopefully, this article has gotten you excited to either start your first Amazon business or to add to an existing one.
But, if you have additional questions or comments regarding dropshipping on Amazon, let us know down in the comments or Contact Us.
Consider the following related blog posts topic links;