How To Do Drop Shipping On Amazon?

Drop shipping is one of the easiest businesses to start in 2022. This is a business that doesn't require you to buy any sort of products. You also don't need to handle the inventory and take care about shipping the product to customer.

As a drop shipper, you place an order to a supplier, distributor or manufacturer, who fulfills the order on your behalf. Amazon is know as world's largest online marketplace. So it is considered as the best platform for drop shipping.۔

In this article, we will talk about the advantages and disadvantages of Amazon drop shipping. We will also talk about how to do drop shipping on Amazon and make your business profitable.

How Does Drop Shipping On Amazon Work?

Before you start drop shipping on this platform, it is better to understand the rules and regulations so you don't get your account banned from Amazon. For instance, you are not permitted to buy things from another shop on Amazon due to drop shipping regulations. Your seller account may be suspended if you break this rule.

The other regulations that you need to abide by are:

• You need to show yourself as seller on invoices, external packaging and packing slips.
• It is your responsibility to accept the return and process it.
• You will have to comply with the terms of service of Amazon

When a customer orders a product that you add on Amazon , you purchase that product directly from the supplier. Then you forward the customer information, and finally the supplier ships the order to the customer.

Additionally, the supplier's name and contact information should not appear on invoices, outside packaging, or packaging slips. In other words, the customer should never know which company the products are purchased from.

Advantages & Disadvantages of Amazon Drop Shipping

Amazon drop shipping has so much to offer for the new entrepreneurs that makes it an attractive platform. Starting a drop shipping business on Amazon has following advantages:

Less Capital Is Required

Drop shipping is a very economical and accessible way of starting new business. Just like traditional ecommerce models like retailers and wholesales, you don't have to buy the products and handle them physically, and you can still earn a living. You don't have to receive, pack and ship them to customers' address.

Multiple Categories Of Products

Amazon has more than 30 product categories. With the right suppliers, you can sell to as many categories as you want. Just avoid the categories that Amazon has prohibited. Such categories include alcohol, supplements for sports persons and medical equipment.

Quick Set Up

You don't have to purchase the inventory and handle it in drop shipping business, which makes it easier to start for new entrepreneurs. You can set up Amazon Seller account any time. You just have to find a supplier, and you good to go with selling on Amazon.

Ability To Reach Larger Number Of People

Being the most famous online marketplace in the world, Amazon has a wide customer base and a vast range of drop shipping categories. With the right supplier and the products, a great potential market is in your access!

Partnership of Shopify And Amazon

If you are a Shopify merchant, you can seamlessly associate your account with Amazon and get into a greater market. By connecting Amazon and Shopify, you can easily manage orders on both platforms. You can make inventory level compatible between both platforms to avoid over-selling.

Drawbacks of Working As Drop Shipper On Amazon

Drop shipping on Amazon also has some disadvantages. Before getting into this ecommerce marketplace, you need to have an idea of these disadvantages.

Tough Competition

As you expect to have less hurdles and low competition going into any ecommerce model, the drop shipping on Amazon has a very high competition. You would definitely want to avoid selling products that already have so much competition. So it is better to take time while selecting a category of products you would sell.

Limited Products Description

More often you will see sellers on Amazon who have products that have limited product description. If your supplier doesn't give you proper information about the products, you won't be able to answer the queries of the customers.

Limited Promotional Deals

As you are not purchasing products in bulk, you can't offer special discounts and deals to your customers. But still you can offer discounted bundles and free shipping to your customers. To boost the sales, you can also sell different products in bundles from your store.

Low Product Inventory

One of the drawbacks of the drop shipping is the low inventory level. If you're relying on a seller that is also working with other sellers, you won't have to many products to sell.

Whenever your inventory is low, you can buy products from other suppliers as well. However, working with more than one supplier can complicate the way of working. This defeats the purpose of using a hassle-free drop shipping method.

Concerns Related To Customer Service

As it is supplier who is responsible for order packaging and shipping, you have zero update about the order status. What if a customer asks about the delivery status? You won't be able to answer the the query of the customer until supplier provides you the required information.

You won't even be able to answer a customer if the customer is mistakenly delivered wrong parcel. Before taking an action you would need to inquire from the supplier and verify the status of the delivery or any other situation.

A little communication error can cause big problems, like negative review or bad user experience. So effective communication is very important for drop shipping. To avoid any customer service issues, communication standards must be agreed upon and followed by both the seller and the supplier.

How To Start Drop Shipping On Amazon?

Either you are a new seller or an older, Amazon drop shipping can be a great opportunity to increase your business's online sales. Here we will talk about the methods to start drop shipping on Amazon.

Plan Your Online Business

Even if it is easy to start drop shipping business, proper plan still is very important. It is very important for you as a businessman. Other than just the business name and logo, you will also need to analyze which products you will sell, what will be your target market, who will be your suppliers and what type of decisions you will have to take depending upon your potential market.

Create Your Amazon Seller Account

If you want to sell many products, you will definitely want an Amazon Professional account. Amazon will charge you a $0.99 commission per sale of one of your products, which means a large portion of your revenue goes to Amazon.

On the other hand, a professional account has some other fees apart from the monthly fee. Visit sellercentral.amazon.com to register. Provide required information like your ID, email and password. You will also be asked about your business's details, tax information and address.

Get Approval About Your Product Category

Before you launch your store on Amazon, you will have to get approval, depending upon the type of your product. Fashion, Jewelry and grocery are the categories which require approval from Amazon. Whereas electronics items, video games and books are the categories which require no approval and you can easily launch your store after creating your seller account.

Keep in mind that Amazon has restricted the sale of some specific items. Before selling, make sure your product is not in the list of restricted categories. Alcohol, food supplements and laser products are some of the examples of restricted categories.

Link Your Amazon And Shopify Accounts

If you already have an account on Shopify, you can also link your account with Amazon seller account. It allows you to manage orders on both platforms easily. If you have a brand name associated with your Amazon account, this will increase the trust of customers on you and it can boost your sales.

After your Amazon account is approved, link it with Shopify store. For this, go to your Shopify account. Look for Sales Channel on the left and click '+' sign. This will open up a list which will also include Amazon.

To link both platforms, click 'Add Channel', and to verify, click 'Connect to Amazon' button.

Prepare Product Listing

The products you want to do drop shipping for won't get listed at their own. To start with drop shipping on Amazon, click Amazon Sales Channel link. Look for 'Create Listing'' link and click 'Select Products'.

This will show you 2 options. First option will be for brands that prepare the products at their own. This option is to ensure that they have Universal Product Codes (UPCs).

As a drop shipper, you will go for second option. This option is for those who sell products of other brands. After selecting this option, you can search for products to sell. If you find a product to sell, click on Select. After you are done with this process, click Publish.

Sync Your Inventory

If you sync your Shopify account with Amazon Sales Channel, it will prevent your customers from ordering products that are not in stock. Shopify will automatically update your product listings on Amazon with inventory on both platforms.

This way you can avoid negative customer reviews and potential customer service issues.

Promote Your Amazon Store

Amazon is a marketplace where competition tends to be fierce. To get ahead of your competitors you need to invest in marketing methods like Paid Promotions. You can run ads on Amazon to get new customers. You can also advertise on social media to increase your sales.

Conclusion

In today's article we talked about drop shipping. Drop shipping is an e-commerce business model in which the drop shipper does not need to purchase products or take responsibility for managing orders. You simply place the order on behalf of the customer to the supplier and they fulfill it.

In this article we discussed the pros and cons of drop shipping. We've seen how to start drop shipping and the benefits of linking an Amazon account to Shopify.

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