Complete guide to Amazon Dropshipping in 2021

Looking for a quick and easy way to start selling on Amazon but don’t want to invest a lot of time or money? Then you should start  Amazon Dropshipping.

If you ask an experienced e-commerce merchant for a decent way to get started selling things online without breaking the bank or investing a lot of time, dropshipping is likely to be the answer.

Table of Contents:
1. Most recent updates on Amazon Dropshipping
2. How does Amazon dropshipping work?
3. Dropshipping on Amazon: Advantages and Disadvantages
4. What is the best way to get started dropshipping on Amazon?

Recent update on Amazon Dropshipping

Before you start dropshipping on Amazon, make sure you completely know the Amazon’s dropshipping policies to avoid getting your account suspended.

Amazon have recently revised their policy page to ensure that all sellers are aware of Amazon’s strict dropshipping standards.
If you break the policy in any manner, you may lose your ability to sell on Amazon, or your account may get suspended.

To use a drop shipper to fulfil orders, you must follow the following guidelines:
1. All invoices, packing papers, external packaging, and any other paperwork included or delivered with the product must identify you as the vendor. Your supplier or manufacturer name or logo should not be mentioned in no case.
2. Accepting and processing returns is your responsibility.
3. According to the seller agreement, you must adhere to all of Amazon’s Terms of Service.
4. This is important: Do not order things from another online merchant like ebay, AliExpress and have them shipped to your consumer. This is a massive no-no for Amazon, and your account will be suspended as a result.

For instance, suppose you want to sell a coffee maker on Amazon. A customer buys the merchandise, you buy it from Walmart.com or eBay, and then you submit the Amazon buyer’s shipping information.

A shipment with Walmart or eBay tags is delivered to the Amazon client. THIS IS NOT PERMITTED!

Customers will be confused and disappointed if they receive a box from Walmart or eBay after ordering from Amazon.

You can alternatively engage in retail arbitrage, which is purchasing an item from a different store, such as Walmart, and reselling it on Amazon — as long as no reference of Walmart or eBay appears on the packing slip or packaging.

How does Amazon dropshipping work?

Dropshipping is a type of e-commerce in which a seller accepts orders on behalf of a manufacturer, distributor, or supplier. When a customer purchases a product, the seller forward the order to the supplier who then pak and dispatch the item on his behalf.

Dropshippers rebrand the things they sell as their own, and the final user is unaware that the goods originated directly from the manufacturer. This is a common practise on e-commerce platforms such as Amazon, Ebay, and Shopify.

Complete guide to Amazon Dropshipping
  1. The product you’ve listed on Amazon is first purchased by an Amazon consumer.
  2. Second, once the transaction is complete and the funds are received, you buy the product directly from the supplier and provide them with the customer’s details.
  3. Finally, the supplier sends the product to the customer pasting your company label and invoices.

Advantages of Amazon Dropshipping

1. Low first startup costs

Dropshipping, unlike other popular e-commerce strategies such as private label and wholesaling, does not necessitate the ownership of your own inventory. Instead, when the customer pays you for the sale, you simply take a pie of the money and use it to buy the product from the supplier, who then ships it to your buyer.

2. Setup time is minimal

Amazon Dropshipping is quick and simple to set up because you don’t have to possess your own inventory. You don’t have to wait for your product to be made and/or sent to the fulfilment centre, after all. It’s all set to go. All you need now is a good deal!

 

3. Business that is completely automated

There are numerous programmes and plugins available online that allow you to fully automate Amazon dropshipping. As a result, your dropshipping business can be (nearly) fully hands-off.

Disavantage of Amazon Dropshipping

No matter how good it sounds, every business model has some pros and cons. Now let’s discuss some disadvantages of running an Amazon dropshipping business.

1. Long Delivery Times

The first thing that might bother your customer is long delivery times.

Dropshipped items on Amazon are frequently shipped directly from suppliers and manufacturers. Those providers are mostly located outside of the United States.

As a result, delivery timeframes from international vendors can take several weeks (or even months in some cases) to reach the end customer.

2. No Quality Control

You have no control over the quality of the goods because it is transported directly from the producer to the consumer.

When things travel thousands of miles or more to reach their final destination, it’s easy to get damaged. The changes in returns increases in such cases. 

3. Huge Competition

Because the entry barrier to dropshipping is so low, competition can be fierce. Furthermore, while there is some uniqueness with the products you’re selling, there’s nothing prohibiting other Amazon sellers from selling the same items.

As a result, price is one of the few levers you have to use to differentiate yourself from the competition, which can lead to a “race to the bottom.”

Does Amazon allow Dropshipping?

Yes, Amazon do allow dropshipping but there are strict guidelines that you need to follow.

Dropshipping or allowing any third party to fulfil orders for you is not permitted unless the customer understands that you are the seller of record.

The following are instances of drop shipping policy violations that could result in restriction in your ability to sell on Amazon’s Merchant Fulfilled Network:

Dropshipping is strictly prohibited, without exception, to purchase products from another online retailer and have that retailer ship directly to customers if the shipment does not identify you as the seller of record or if anyone other than you (including the online retailer) appears on packing slips, invoices, or external packaging; or

It is also completely illegal to ship orders with packing papers, invoices, external packaging, or any information revealing a seller name or contact information other than your own.

When a consumer sees packaging, invoices, or receipts from a seller who isn’t you or Amazon, it causes them to be confused about how their order is being fulfilled and who they should contact if they have any difficulties or queries.

 

If you plan to use a drop shipper to fulfil orders, you must always:

 

Have an agreement with your supplier that any packing slips, invoices, exterior packaging, and other information included or provided in connection with the products will identify you (and no one else) as the seller;

Prior to sending the order, remove any packing slips, invoices, external packaging, or other information indicating a third-party drop shipper;

Be in charge of accepting and processing goods returns from customers; and

All other requirements of your seller agreement and applicable Amazon policies must be followed.

How to start dropshipping on Amazon

Now that we have understood a little bit more about Amazon Dropshipping and how it works, here’s how to get started as a dropshipper.

1. Set up an Amazon seller account

You’ll need an Amazon seller account to sell on the site. Go to sellercentral.amazon.com to register one. There, Amazon will give you two options for account types to begin with: individual and professional.

2. Find some products with a strong demand and low competition

The next step is to find a product to sell on Amazon.

You can do this by searching for high-demand/low-competition product. the best tool for Amazon product research is Jungle Scout’s Opportunity Finder. While you may have your own set of criteria for locating such items, I propose starting with the following:

  • Monthly sales of 100-300 units
  • Set the level of competition from “extremely low” to “moderate.”
  • Set the average monthly price between $20 and $35.
  • Set the niche score to 7 or above.

This should provide you with a large number of product options to choose from across all categories.

Also, when you’re just starting out, keep things simple. Housewares, sports & outdoors, and patio, home, & garden are all low-maintenance categories that are ideal for novices.

3. See if the product is accessible on a site like Aliexpress

You’ll need to identify a source once you’ve come up with some product ideas.

Aliexpress has the strongest base to dropshipping products. It’s a business-to-business website that connects e-commerce business owners with dropshipping suppliers.

Simply key in the search words for the thing you want to sell, and a choice of products will appear, similar to Amazon.

When you click on one, you’ll be given a list of details.

Some product comes with a 60-day buyer protection guarantee from the seller. However, keep in mind that for such products the delivery time is more than a month away!

4. Create Amazon product listing

You’ll need to create an Amazon product listing after you have a product idea and a supplier to deliver it.

Go to Inventory > Add a product from your Seller Central account. Click “Create a new product listing” when the Add a Product screen appears.

The first step is to select a product category. After that, you’ll need to fill out the information for the listing.

Remember to consider Amazon’s fees when deciding on a price for your dropshipped product. If you’re a professional seller, you’ll be charged an 8-15 percent referral fee, depending on the category. Individual sellers are also charged an extra $1.00 per sale.

Check out amazon fees and charges here

Finally, after you’re ready, you may publish your listing and begin selling your items.

digitalsunilsah

Blogger | Digital Marketer | Dropshipper

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