Interested to learn how to dropship on Amazon? Find out how you can take advantage of the fast shipping times and reliable fulfillment services with our Dropshipping on Amazon guide.
There are two types of models for dropshipping and selling on Amazon. Let’s take a look at the process below.
Dropship Model
- Seller and Manufacturer agree to dropship together
- Seller lists the product on Amazon/Shopify store
- Customer purchases an item and seller is paid
- Seller places order and pays manufacturer
- Manufacturer ships out the order to customer on behalf of seller
Fulfillment by Amazon (FBA)
- Seller buys bulk inventory from manufacturer
- Seller ships inventory to Amazon fulfillment center
- Seller lists the product on Amazon/Shopify store
- Customer purchases an item and seller is paid
- Amazon fulfillment center ships the product to customer
Does Amazon Allow Dropshipping?
Yes, Amazon does allow dropshipping if you are the seller on record of your products. I know some dropshippers bend the rules by dropshipping other merchants’ products but that will only lead to getting banned on Amazon in the long run.
Here are some rules you must follow:
- Be the seller on record of your products.
- Identify yourself as the seller of your products on all packing slips and other information included or provided in connection with them.
- Be responsible for accepting and processing customer returns of your products.
- Comply with all other terms of your seller agreement and applicable Amazon policies.
Methods of dropshipping that are not permitted:
- Purchasing products from another online retailer and having that retailer ship directly to customers.
- Shipping orders with packing slips, invoices, or other information indicating a seller name or contact information other than your own.
Find out more about Amazon’s dropshippong policy and rules here.
How Much Does it Cost to Dropship on Amazon?
All users are required to sign up as a seller to begin dropshipping on Amazon.
Individual plan starts from $0.99 for every unit sold. Professional plan is fixed at $39.99 and you can sell unlimited items. Amazon’ drop shipping fee is around 10-15% depending on product type.
See the latest pricing plans on Amazon here.
Benefits of Dropshipping From Amazon?
1. Large Group of Ready Buyers
Amazon is the biggest online retailer with over 300 million users. You can tap on the current users to sell your product. By adding your product on Amazon, you can get a new sales channel to reach out to new customers.
2. No Warehouse Cost
If you choose to drop ship from Amazon and choose to use FBA (Fulfilled by Amazon), you wouldn’t have to pay for a warehouse. Simply ship your products to Amazon warehouse and let FBA send the products to your customers.
However, if you choose to stock in your warehouse, you will have to rent a warehouse and pay fulfillment fees for each order. You will also not be restricted and burdened by Amazon’s strict product preparation requirements.
3. Sell in Multiple Categories in Amazon
You can categorise your products in multiple categories in Amazon to get maximum reach on Amazon. There are over 30 categories in Amazon that you can target. By choosing multiple related categories, you can serve to multiple audiences.
4. Faster Shipping Times with FBA
If you use FBA (Fulfilled by Amazon), you can get a Prime badge or 2-day shipping which can help you get more sales as customers are more likely to purchase with sellers with 2-day shipping option.
Here are 8-Step Checklist for Dropshipping on Amazon
1. Select an Online Store Platform
We recommend you to use Shopify due to its ease. You may use Shopify to link Amazon as a sales channel. This makes order management on both platforms easy. Because Shopify just partnered with Amazon, dropshipping on Amazon just got easier.
2. Sell the Appropriate Items
You may create an Amazon store without permission if you’re in a specialty like books, computer and video games, electronics, office supplies, and so on, according to Amazon’s list of qualified stores.
Make sure you’re not in any of these categories by looking at Amazon’s list of prohibited items.
These include hoverboards and potentially dangerous goods. For business owners who wish to sell their products on Amazon, there are various qualifications and limits.
Popular areas such as fashion, cosmetics, and jewelry require clearance before you can open an Amazon store. For each category, you can see the exact approval criteria.
Check the list of product categories that need approval in Amazon here.
3. Create a Seller Account on Amazon
You should use your email address to register for Amazon Seller Central. You will then be asked to provide your name, email address, and password. Further information about your company, such as your address and tax information will also be required.
So keep your margins in check. Individual selling plans charge $0.99 each item sold, which might eat into your profit margins. A professional account is recommended if you want to sell a large number of items.
4. Connect Your Shopify Store to Your Amazon Account
Once you’ve been accepted on Amazon and your account has been created, connect your Amazon account to your Shopify store. On the left panel of your Shopify account, scroll down to ‘Sales Channels’ and click the Add button beside it.
After that, you’ll be able to search for a product to sell under that SKU.
After you’ve located the product, click ‘Select.’ Finally, click ‘Publish’ to complete the process.
If your company manufactures the goods, you must obtain UPC codes. ‘Create Listing’ will appear. After that, click ‘Select Product.’
Also, you need to allow Shopify to manage your inventory This guarantees that when a buyer places an order on Amazon, the item is still available.
Make sure consumers can’t order things that are out of stock; this might result in bad feedback and extra customer support time you didn’t budget for.
5. Begin Marketing Your Ecommerce
Now is the time to send traffic to your Shopify store.
Make sure to advertise your shop on all of your social media accounts.