Dropshipping On Amazon In 2020

It is a selling process where you drop all the shipping responsibilities of the product. You sell the products to the consumers without being responsible for any shipping from the manufacturer to the warehouse and from the warehouse to the final customer.

Google trends depict through graphs that this improvised model of selling products has earned a lot of popularity among sellers in the past five years.

To start the dropshipping, all you need is to earn an e-commerce store or Amazon, and you are good to go. But before we dive deep into the concept of dropshipping on Amazon, it would be better to learn about how traditional selling operates where you have your store.

Doing things on your own:

You have a website, and you own your physical store. You receive a buyer request on the website. Then you pick the product from your store takes it to the courier service with the buyer’s address on it. From there, it is shipped to the customer’s doorstep.

Dropshipping without amazon:

Here, you have your products displayed on your website. And you don’t have a store with physical inventory. After receiving an order, you contact the inventory store supplier to ship it to the given address. This is it.

You get the

Here’s how it works — you list products on your site without holding any physical inventory. When you receive an order, you contact your supplier who ships the item(s) directly to the consumer. And that’s it! Isn’t it fun?

But dropshipping on Amazon, let me say, is a bit trickier.

Dropshipping on Amazon

If $232 billion in 2018 doesn’t make Amazon the biggest e-commerce site in the world, I don’t know what else would. If you have an approved account from amazon, you also can have a chunk of this portion in the upcoming year.

Is dropshipping allowed on Amazon?

It is allowed for anyone and everyone who complies with the requirements put forward by Amazon.

  • You must sell the products you keep records.
  • All the slips and information regarding the product must present you as a seller of those products.
  • Before giving the products to the Amazon-affiliated warehouse, you must remove the information or slips that hint at a third-party supplier.
  • Take responsibility for accepting the product returns and any processing regarding it.
  • You must always comply with the Amazon policies and the terms of the agreement.

Examples of a dropshipping business which is not allowed on Amazon:

  • You purchase the products from an online retailer and ask the business to ship them to Amazon directly.
  • Shipping orders display invoices, slips, or any contact information of someone else despite your business.

It is wise to comply with the requirements and not doing things like the two examples mentioned above. Otherwise, you would end up losing your Amazon account permanently.

Dropshipping Using Amazon FBA

There is a convenient option to sell your products on Amazon; this is called Fulfilled by Amazon (FBA) program.

In this program, Amazon will do everything for you, from picking the product to packing and shipping to the customer. If there is any problem with the product, Amazon will take care of product returns and services. Amazon also provides the customer with tracking information about the product.

All the good things come at a cost, so does the Amazon FBA program. You have to pay long-term storage fees if you keep your product for more than six months in the Amazon warehouse.

Amazon, when ships the product through FBA, displays “Sold by [seller name] and Fulfilled by Amazon.” You can also choose to provide your customers with prime shipping offer. This would increase your chances of winning the buy box more frequently.

Pros and Cons of Dropshipping on Amazon:

Pros:

  • Immensely familiar brand
  • 310 million active users
  • A considerable number of buyers
  • Amazon ads get traffic for you
  • Optimizes your listing
  • You don’t need to focus on buyers
  • FBA program doesn’t require you to hold inventory
  • Amazon provides customer services on your behalf
  • Amazon provides returns and after-sale services

Cons:

  • Supply from another retailer to Amazon is not permitted
  • Most of the profit goes to the supplier
  • After paying the seller fee, little profit remains
  • Amazon customers have elated expectations
  • Negative feedback can suspend or close your account
  • Customers want in time delivery

Does Amazon allow you to drop ship to eBay?

Amazon strictly bans the prime members from selling the products which they have purchased from eBay. There is a strict policy that clearly states the prime members of Amazon are not allowed to purchase a product they want to resell or ship to the consumers by using the benefits of Amazon prime membership.

Dropshipping from Amazon to eBay:

The seller sells the product from eBay to the customer, who is listed on Amazon at a lower price. The profit is the difference between the prices on eBay and Amazon after deducting the fee.

When the customers find out that they get the product from eBay, which is also available on Amazon and at lower prices, this makes them annoyed. They can give negative reviews to your services. And you can end up getting your account suspended or removed permanently.

Other Dropshipping Options

Amazon is not the only platform that allows you the liberty to do business through dropshipping. eBay is also one of the big names that offer dropshipping for the sellers. You can create your e-commerce store on eBay.

eBay allows you to do dropshipping and asks you to guarantee that the customers would get the orders they have placed within thirty days of listing ending. You are not allowed to state that the product is coming directly from a supplier.

eBay is trying to prohibit the seller from fulfilling the orders through Amazon. This practice gives the notion to the customers that Amazon has the lower price of the product. That is why eBay chooses to send it through their platform. The Amazon products are also shipped in their printed packaging. It also promotes Amazon and makes their advertisement by fulfilling your orders through eBay.

Your store:

You start a business or take the existing one on the internet. The e-commerce store, which has your inventory store, gives you more freedom to earn and grow. You don’t have to pay the fee or cut of the profit to a third party. But in this way, you are unable to benefit from a platform with the traffic of three million users. But still, you get the liberty to build your brand and customize your website according to the way you like.

Final Thoughts

This model is not perfect for everyone. You should have a specific personality passion and temperament for Amazon dropshipping if you want to get success here.

If you ask me about Amazon dropshipping, I am not a big fan of this model. People believe that this model can make you rich quicker than other ways, but in fact, the lion’s share of your profit goes to the suppliers and services providers in terms of fee.

Some intelligent people use this dropshipping model to test a new product. And some use this model to make extra cash.

But if you want to get rich using this model, make it clear in your mind that you must choose the product wisely. And your product should click the minds of a significant number of customers. If you can maintain the sale above the chart, only then can you claim to be called a rich person. Otherwise, you would just be earning bread and butter for your daily consumption.