What Is Amazon Dropshipping? Can You Really Make Money Online Doing This?

Written by Frank Hatchett

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Our goal at EcomElites is to help readers get the information they need, we partner with companies to help bring you that information. If a purchase or signup is made through our partners, we receive compensation for the referral. Learn More

When it comes to dropshipping, I often tell people to use Shopify.

Shopify makes it easy for entrepreneurs to get started. All you need to do is create a website and plug in a dropshipping app like Oberlo that does the heavy lifting for you.

With that said, it’s always a good idea to explore alternatives. They give you a “Plan B” in case the initial strategy fails to deliver.

In your case, one option is to dropship on Amazon.

Lately, a lot of people have asked me to give a detailed answer to what is dropshipping on Amazon. Well, it’s time that I did.

What Is Amazon Dropshipping

Amazon is fine with merchants using its website to sell products and having orders fulfilled by a third-party. However, there are certain guidelines they must follow.

What you see is a screenshot from Amazon’s dropshipping policy page. Skim through the text and you’ll realize dropshipping on this platform isn’t straightforward.

As the company requires you to be the “seller of record” of your items, you’ll have to build relationships with wholesalers beforehand.

You’ll also need to print custom packaging receipts and slips, then send them to the supplier so they can put them on your packages.

Lastly, you’ll need to manage the returns, which requires you to communicate with both the supplier and the customer. You may even need to pay to ship the item back to the supplier for replacement.

With so many requirements to dropshipping on Amazon, why would even someone want to consider this channel?

Put simply, it’s a great way to build a credible business as Amazon is a household name.

The other benefits of using the platform are outlined below.

Advantages of Dropshipping on Amazon

Launching a dropshipping business on Amazon offers the following benefits:

A big audience to target

Notably, Amazon is one of the biggest retail websites in the world.

As of the fourth quarter in 2018, it had a 56.1% market share of the most popular online websites.

amazon market share ecommerce

Related: How To Sell On Amazon To Make Money (Ultimate Guide)

Another stat informs that the website currently has 300 million active users.

This means selling on Amazon can get you huge returns for your efforts.

Plus, you’ll have an opportunity to sell to a customer base you never even knew existed.

Professional storefront

Compared to building an independent dropshipping store, launching a storefront on Amazon requires very little effort. You just have to create a seller account, import items, and you’re all set.

Also, you don’t need to worry about hosting as all your product images and descriptions will be hosted on Amazon’s high-end servers.

Good reputation

According to Harris Poll Reputation Quotient, Amazon is second in the rankings for the most reputable companies in the US.

The annual survey ranked 100 firms to see how their reputation is perceived by the general public.

The online retail giant tops several other brands including Costco, L.L. Bean and The Home Depot. Only Wegmans has a better reputation than Amazon.

Because of the company’s great reputation, you won’t have to build brand awareness from scratch.

Most buyers will already trust you because you’re retailing on the globe’s most credible ecommerce website.

How to Start Dropshipping on Amazon

To dropship on the platform, you’ll need the following:

Amazon seller account

Anyone who wants to sell on Amazon has to create a seller account and pick between two plans.

The first is the Individual account that charges a flat $0.99 fee per sale. The second is the Professional plan, which removes the charge but costs $39.99 a month.

The image below shows the differences between the two plans:

I recommend you to sign up for a professional account as the per item fee can eat away at your profits.

Eligible category

Amazon doesn’t allow you to sell anything and everything. They have a list of open categories for sellers. Products in these categories can be sold without permissions.

However, selling in certain categories requires approval from the company. You can read more about open categories and those requiring permissions here.

Trustworthy supplier

The third requirement in your journey is to find a legitimate supplier.

The best way to discover suppliers is to attend trade shows or research wholesale directories.

Another option is to find gold suppliers for your product on Alibaba. These suppliers are premium wholesalers who have a track record of sales and satisfied customers.

Make sure whoever you pick has a short delivery period, as most sellers on Amazon ship within 3-6 days. In the case of Alibaba, try searching for suppliers who’ve warehouses in the U.S.

For more resources and insight, feel free to read my post on finding wholesale suppliers.

Once you’ve picked a supplier, build a relationship and ask them not to include any packing slips, invoices, and other information that has their name on it (otherwise, your Amazon seller account can get banned).

Product listing

After finding dropshipping suppliers, the next step is to create product listings.

For items that already exist in Amazon’s catalog, you can create a listing by opening the product’s page and clicking on the “Sell on Amazon” button.

For new items that aren’t present on the website, head over to your seller account and click on the “Add a Product” feature to create a new listing. Also, make sure you have the following details on hand:

That’s basically it. You’re now ready to sell on Amazon.

How to Succeed with Amazon Dropshipping

Now that you know how to dropship on Amazon, let’s take a look at some strategies that you can use to entice prospective customers. Here are some handy tips to help you skyrocket your sales:

Get the buy box

Amazon’s buy box is the top right section on an item’s page where people can directly add products to their checkout carts.

Why is it important? According to multiple industry reports, 90% of the time the seller who has the buy box makes the sale.

Hence, your aim as a dropshipper should be to get the buy box.

To do so, you’ll need a high rating. A seller rating of 95% or above should work in your favor.

Other than that, you’ll need faster shipping times like 14 days or less.

Lastly, your pricing should be lower than most of the other sellers.

Having a good feedback score and fast customer service may also help you get the buy box.

Do some SEO

In the case of Amazon, the best SEO technique is to optimize your product listings.

Start by making sure your product titles are descriptive. This requires you to provide information like brand name, model number, color, dimensions, and so on.

Also, add relevant keywords to your product listings to ensure they’re discoverable in search engines.

Done right, SEO can drive loads of traffic to your Amazon pages.

Prioritize reviews

Amazon product reviews can go a long way in making a seller more credible and a product more attractive.

Fortunately, obtaining reviews is a no-brainer. All you have to do is email the individuals who’ve bought your products.

Thank them for their business and request them to give you a review if they’re satisfied with the purchase.

Also, include a link to the listing page in your email to make it convenient for them.

If you get a negative review, take the time to explore its root cause, offer an apology, and provide a solution if you need to.

Bonus tip: Connect Your Amazon Account with Shopify

Most Amazon dropshippers sell and manage products only through their seller account.

But Shopify now lets every user add Amazon as a sales channel to their online store.

So if you have a Shopify store, go to the “Sales” channel in the left pane of your account and click “+” beside it.

Now a pop-up will appear, and Amazon should be the first channel on the list. Select “Add Channel” and you’re done.

Connecting Amazon to Shopify will enable you to manage the inventory you have on multiple platforms. In fact, you won’t need to go back and forth since you can just track inventory levels in Shopify.

Final Verdict

Now that I’ve covered all the bases, you should have all the details you need to begin dropshipping on Amazon.

Though you won’t have an independent store to promote, you can make a good sum by finding, listing and dropshipping profitable items.

Make sure to follow Amazon’s rules. Otherwise, you run the risk of getting your seller account suspended.

To succeed, choose your dropshipping suppliers with care. Your efforts should pay off once you find someone who can supply your customers with high-quality products while using your seller name and branding on record.

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