Dropshipping

A Beginner’s Guide on How to Start with Amazon Dropshipping

Nedina Gjorgjieva

Nedina Gjorgjieva

Sep 06, 2022 · 11 minutes

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It wasn’t that long ago when Amazon was introduced in the eCommerce world as a young online marketplace where people could purchase and sell items. Nowadays, Jeff Bezos’ company has taken the world by storm and for many has become the number one sales channel, a fact that can be proven by looking at research provided by Statista. As of April 2021, Amazon has been holding the title of the most popular online marketplace with approximately 5.2 billion visitors on a monthly basis, followed by eBay with 1.7 billion visitors per month.

For this reason and many others, we’ll be discussing further in the article, Amazon has been described as the dream selling platform by a plethora of online entrepreneurs, especially dropshippers. 

So, how can you turn around your business with the help of Amazon and how exactly could you do that with Amazon dropshipping? Feeling intrigued already? Then stick around to find out the rest of the details.

What’s Amazon dropshipping?

Amazon dropshipping is a fulfillment eCommerce method, enabling dropshippers to make sales and scale their businesses via their dropshipping program. Sellers aren’t required to either manage an inventory or take care of the shipping services, as the dropshipping supplier is the one who’s responsible for these tasks. Dropshippers, however, have a duty to open an Amazon seller account, which will allow them to list their products on the platform.

What’s the Amazon dropshipping policy?

When dropshipping on Amazon, the platform does require sellers to abide by their dropshipping policy in order to benefit from a great experience:

• You must be the seller on record for all products you’re listing including packages, invoices, product slips, and so on;
• You’re forbidden to purchase products from another retailer and have them ship the order to your customers;
• You have to get rid of all information about your dropshipping supplier prior to the order being dispatched;
• You’re responsible for managing product returns;
• You need to respect the Amazon seller’s terms and conditions.

What category of products sells best on Amazon?

With over 30 product categories, Amazon is the place to be for many dropshippers as the marketplace offers them to choose from a profusion of product niches. Despite this large selection, it’s unrealistic to expect that whatever you go with will sell well. That being said, these are the top categories of products that sell best on Amazon:

• Fashion. Fashion products are one of those items that are bought all year round, making this segment a 1 trillion USD-worth industry. When thinking about which apparel category to focus on, branded clothing is probably the way to do it, as the luxury goods segment is among the most profitable markets with a revenue of over 300 billion USD as of 2022. 

• Beauty and personal care. Anticipated to reach over 400 billion USD in value by 2026, the beauty and personal care segment is another giant product category to consider working with. Despite not generating as many sales as fashion, beauty products still represent a staple for many customers.

• Home and kitchen. When it comes to house design, home and kitchen goods are quite popular among customers. As stated by Similarweb, in 2022 it reached a revenue of approximately 28 billion USD, making it a demanded product category.

• Sports and outdoors. With a market volume projected to surpass 100 billion USD by 2025, the sports and outdoors section on Amazon shows promising results. Therefore, it’s a category worth taking into account.

• Electronics. In today’s highly digitalized world, electronics can also be considered a well-earning product category. In 2021, this segment obtained 126 billion USD in the US alone, generating a share of 21% of the US eCommerce market.

Bear in mind: Avoid selling products that Amazon has marked as restricted, which you can learn about in the Amazon restricted product section.

How much does it cost to start Amazon dropshipping?

There are a few fees you’ll need to take care of when dropshipping on Amazon:

• Subscription fees. The subscription fees refer to Amazon’s seller account plans. In order to be able to dropship on the platform, you’re required to register for either an individual account for $0.99 per item sold or a professional account for $39.99 a month without being charged separately for each sale.

• Referral fees. These are billed for every item you sell by charging you a certain percentage from the total sale, which can vary for most products from 10-17%. 

• Fulfillment fees. The fulfillment fees are optional as they depend on whether you choose to ship the orders yourself or through your dropshipping supplier, or work with the Fulfillment by Amazon program, where you send your products to the Amazon fulfillment centers and, once an order has been made in your Amazon shop, they deliver it to your customer.

Advantages of Amazon dropshipping

Amazon dropshipping comes with a long list of benefits such as:

Convenient selling conditions

Not having to deal with the burden of taking care of warehouse rents, packing products, and shipping orders results in an immense wave of relief. Just like with managing a traditional dropshipping business, with Amazon dropshipping you’re free from all of that responsibility as well. With one single click, you can conveniently connect your online store with your Amazon account and start dominating the Amazon marketplace.

Reduced costs

Continuing from our previous point, by rescuing you from dealing with a bunch of duties, dropshipping on Amazon will notably reduce your costs as well. And those that you’ll have to incur won’t be nearly as significant as those you’d be charged when running a brick-and-mortar store.  

Massive group of shoppers

Being available for shopping to customers across the globe, Amazon is the ultimate hot spot when it comes to online purchasing. The platform is overflown with eager shoppers who are constantly looking for their next favorite product or brand.  

That being said, Amazon isn’t only a great place to generate additional sales, but also a smart way to drive traffic to your online store, if you have one. It often happens for satisfied customers to Google the company they’ve purchased from and accidentally land on their online stores’ websites.

Disadvantages of Amazon dropshipping

As much as it has good sides, like most business methods, Amazon dropshipping has its drawbacks as well. But even so, they can be brought under control.

Stern selling regulations

Amazon imposes strict selling rules for all sellers, including dropshippers. In order to be able to dropship on the platform, you’re bound to abide by a set of regulations regarding your product listings, shipping methods, and customer support, to name a few. 

Nevertheless, don’t feel intimidated by them as they’re created to safeguard sellers and offer a fair marketplace for everyone. Just stick to them and you’ll be able to easily avoid any issues.

Distant customer relationships

Because of its strict dropshipping policy, Amazon may not provide you with a great opportunity to get close with your customers. However, there are always ways to help you build lasting customer relationships indirectly, without even trying to communicate with your audience. 

To illustrate, superior product quality, on-time shipping, high star reviews, and admirable customer service are just some of the things that make customers feel more comfortable shopping from you, and eventually, feel connected to your brand.

Cut-throat competitiveness

Since Amazon dropshipping comes with quite affordable operating costs, sellers worldwide are constantly joining the marketplaces, leading to cut-throat competition. But with a well-structured dropshipping business plan in place and an excellent competitor evaluation conducted on a regular basis, you can still build a successful Amazon business.

Is Amazon dropshipping still worth it?

Yes, Amazon dropshipping can be absolutely worth it. With a fast and easy setup process, reasonable start-up costs, dozens of product categories at sellers’ disposal, and exposure to billions of shoppers, Amazon is chosen by entrepreneurs over and over again. Regardless of the obstacles that may occur, which, however, can be handled, the platform remains one of the leading dropshipping marketplaces.

How do I start dropshipping on Amazon? 

Starting a dropshipping business on Amazon is a pretty straightforward process that calls for these steps:

STEP 1: Create an Amazon seller account

First things first, register as an Amazon seller:

• Go over to https://sellercentral.amazon.com/ and navigate to the ‘Sign up’ button;

• Click on ‘Create your Amazon account’;

• Provide your name, email address, and password;

• Fill out all the fields with information regarding your personal data, subscription plan, billing method, and store details.

STEP 2: Build your product listings

Once your account is active, continue with creating the product listings:

• Open your profile and go to ‘Inventory’ and ‘Add a product’;
• Go to ‘Create a new product listing’;
• Choose your product category and wait for approval which usually takes no longer than 24 hours;
• Fill out all the necessary information about your products: product name, manufacturer, item description and specifics, UPC codes (if necessary), images, setting a retail price, etc. 

STEP 3: Connect your Amazon store with your dropshipping store

If you have a separate dropshipping store based on eCommerce web-building platforms such as Shopify, Wix, Shift4Shop, WooCommerce, and other alternatives, connect it with your Amazon seller account. This will allow you to use Amazon as a sales channel and provide you with a much more easily manageable Amazon dropshipping experience. 

In order to do this, most eCommerce platforms require you to download an Amazon integration app or directly connect your Amazon account by heading over to sales channels on your dropshipping store’s account. To illustrate, in the case of Shopify, here’s how the process works:

1. Go to the menu and find the ‘Sales Channels’ section;
2. Click on the ‘+’ icon ;
3. Find Amazon and add it to your store.

Bonus section: what are some Amazon selling strategies?

Advertise your products

With Amazon’s highly competitive environment, don’t hold back on your marketing strategies. Optimize your keywords, encourage customers to leave reviews, take advantage of social media, reach out to influencers, get started with eCommerce email marketing. If you need extra help, Amazon offers its own advertising program to help you maximize your profits. 

Target customers’ search queries

Creating listings doesn’t only involve inserting a few item details here and there. It also requires providing product information relevant to your customers’ search queries. In this way, shoppers are more likely to click on your product than anyone else’s because your product descriptions offer them exactly what they were looking for. The easiest way to find out your customers’ shopping preferences is by using Google or Amazon suggest.

Use Amazon tools

For an ever smoother dropshipping journey, invest in leading Amazon tools such as SellerApp, for instance. These can offer you plenty of benefits such as providing you with top-performing keywords, reverse ASIN lookup, competitor research, trending products, and many more. 

Dropshipping with Amazon and BrandsGateway

Dropshipping with a supplier that meets all your needs and expectations can be a game changer for your Amazon sales. So, partnering up with a vendor that doesn’t only provide you with first-rate products, but will also support you in your Amazon dropshipping journey with a variety of dropshipping resources, is one of the keys to succeeding in this business.

BrandsGateway is a world-renowned B2B2C supplier, selling to its clients luxury clothing designed by some of the biggest fashion names in the world, and helping them expand their businesses on multiple marketplaces, including via both Amazon and eBay dropshipping.

Their products can be easily sold on the Amazon platform by connecting their online store with Amazon. This usually happens by searching for Amazon in the sales channel section of the platform your store is based on. You’ll find that Shopify, WooCommerce, Wix, Shift4Shop, and many other similar eCommerce web-building platforms offer this feature. In addition, BrandsGateway offers incredibly convenient automated plugin solutions for all of the above-named platforms, including a Shopify App and a Shift4Shop App.

FAQ

To be brief

Amazon dropshipping is a well-performing business model that can introduce you to the eCommerce industry and help you in locking up your first sales or land your already existing business a hand to tap into wider markets. Feel free to lean on our guide for assistance and achieve your dropshipping goals with a breeze.

Related articles:

• eBay vs. Amazon
• Dropshipping for students
• Dropshipping on Shopify vs. Amazon
• Amazon dropshipping suppliers
• Amazon competitors

About the Author

Nedina Gjorgjieva

Proud bookworm, passionate content writer and devoted Arctic Monkeys fan. Always in the mood for travel and sightseeing.

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