Is dropshipping dead? Is it still possible to start a dropshipping company and make a profit by 2021? Is Amazon the best platform to do this? Is Amazon dropshipping profitable?
These questions will be answered by this article.
Dropshipping is a common practice that has been widely criticized. This is false.
We will also discuss whether Amazon is the best platform for dropshipping or whether you should consider other options.
If you are interested in dropshipping from Amazon, this article will give you all the information that you need.
Let’s get started.
Dropshipping: What is it and what are its benefits?
Let’s learn quickly what dropshipping means and how it works at Amazon.
Dropshipping is a way to start an eCommerce business without stock. You act as an intermediary between customer and supplier orders.
The supplier will take care of the rest. You will only need to sell the product via Amazon or your own website. Simply notify the supplier of your order and they will ship it directly to you.
Dropshipping offers the benefit of not having to purchase stock upfront. Dropshipping is a great way to get your online business started without the need to buy stock that might not sell.
Remote management is possible since there’s no need for warehouse space to be rented.
Dropshipping on Amazon: Is Amazon a good option?
Is dropshipping profitable? This is the short answer.
Dropshipping is possible on many platforms. Dropshipping can also be done via Shopify and online marketplaces like Amazon or eBay.
Selling on Amazon has its pros and cons. Learn more about dropshipping on Amazon.
Amazon Selling Advantages
Why sell on Amazon? Is it worth it?
These are only a few benefits.
Get Access To A Wide Audience
Amazon sellers have the obvious advantage of having access to Amazon’s entire customer base.
Amazon is used to purchase products by millions. Amazon has more Prime members than any other American company. This doesn’t include those who aren’t based in the United States, or who shop on Amazon.
If you are looking to open your own business, you will need to start from scratch.
Not only will you have to build a website from scratch (which can be difficult if you have never done it before), but you will also need to establish a buyer base.
You will need to run ads campaigns in order to attract customers. Also, you will need to spend more on Facebook Ads and Google Ads.
Get Started Right Away
Amazon may seem like the best option. It is possible to start immediately without investing in domain names, hosting or graphic design.
However, selling on Amazon comes with risks. If you do not research, dropshipping on Amazon can be difficult.
Now, we will discuss the pros and cons of selling on Amazon.
Amazon Dropshipping The Cons
What are the disadvantages of selling on Amazon as Dropshipper? Let’s take a look at the main disadvantages of selling on Amazon as a Dropshipper.
There will be lots of competition
Dropshipping on Amazon will not be something you are the first to consider.
Dropshipping has been used to sell on Amazon by thousands of sellers. Oberlo estimates that there are more than 2.5 Million Amazon sellers.
What does this all mean? This means you will have to compete with many people.
Let’s say you use AliExpress for your product source. You are likely to find other sellers selling the same product on Amazon.
They might not be dropshippers, but they could have bought the product in bulk via Alibaba.
If your product is not unique, there may be competition from other sellers selling the same item or very similar products.
You will find many other sellers selling the same product, such as an Aloe Vera moisturizing lotion, on Amazon.
Amazon is the place where you can be most successful if your listing appears on the first page of search results.
To rank, you need to have a great description and excellent reviews. Sellers with excellent reviews and a track record of success will be more successful.
Your prices will need to be reduced
This is similar to the last con. Amazon is extremely competitive, so you might have to lower your prices.
Amazon may have sold you an item and then found multiple sellers selling it. When this happens, Amazon will group them in one listing.
The default listing only shows one seller. All listings other than the default listing are listed under “Other sellers.”
Guess which seller’s listing is going to be the default? Amazon also considers factors such as reviews, shipping rates, and shipping costs.
Amazon does this because they are committed to providing the best products at the most affordable prices.
Your listing must be the default listing if you wish to increase your sales. You will need to lower the price in order to do this.
This can lead to a race for bottom and can negatively impact your overall ROI.
Dropshipping gives you the option to purchase products individually. This also means you’ll pay more to get one product from your supplier than for a retailer that orders 500 units.
This means you’ll have to charge more for customers who shop at your store and Amazon.
Amazon is unique because you can compete with other sellers for the default listing, even if they have purchased the product in bulk or can afford a lower price.
Additional fees may apply
Additional fees will apply for every item that you list or sell on Amazon. These fees can vary depending on whether you are a dropshipper or not, but they all add up.
These fees may not be applicable if you buy in bulk.
Dropshippers who feel pressured to reduce their prices or cut profit margins to be listed default may find it difficult to pay additional fees. This could have a serious impact on the viability and success of dropshipping businesses.
There are many requirements
Amazon does not always treat sellers well. Amazon can be biased towards customers.
Amazon will punish sellers who are guilty of minor offenses to ensure the best possible customer experience. This is great news, but it could be fatal for sellers.
Amazon doesn’t penalize customers who return large quantities of merchandise or violate its terms and conditions. They might, however, if customers are unable or unwilling to comply with their obligations. Amazon can be harsh with sellers.
Amazon has had many sellers suspend their accounts due to a negative review, suspected infraction, or other reasons. This is a very sad story.
After your Amazon seller account is suspended, you will have to go through a lengthy and tedious process to recover it.
Amazon doesn’t care about sellers, because so many sellers are competing to sell on Amazon. They don’t want to.
This is a problem if you are a seller who depends on Amazon for sales.
Dropshippers face more challenges. You must adhere to strict guidelines.
It must arrive on time. It should also be in line with your listing description.
Dropshipping is a process that you cannot control. This can make it difficult to manage. You can let your supplier do what they want. Therefore, you need to trust that your supplier will deliver the products as described and on time.
Also, keep stock of all your inventory and pull any listing that is out of stock. You must give Amazon a tracking number once the product has been shipped.
Dropshippers can make mistakes even when they aren’t at fault.
Amazon FBA gives you complete control of your warehouse. Dropshipping can quickly result in you being banned by Amazon if the supplier isn’t completely honest.
As you can see, Amazon dropships must not feature your supplier’s branding or name on the box/slip. They must instead use your branding and name.
Also, you will not be able to place orders at other online retailers or use them for suppliers. This effectively prohibits AliExpress, AliExpress, and all other online retailers, from being suppliers.
It will be more difficult to find suppliers
Now you know that you need to find the best supplier. Many suppliers won’t allow you to sell products on Amazon.
Think about this: If you were a dropshipper, would all dropshippers want to be able to sell the same product on Amazon as you? They could compete in sales.
It’s likely that it is not. These suppliers aren’t looking for dropshippers or anyone competing with their Amazon listings.
This will reduce the number of suppliers, especially high-quality ones.
Customer data is not accessible
When you sell online, you can create an email database to collect customer data. This is essential for building a company.
To acquire a new customer is five times more expensive than to keep an existing one. Building an email list is a great way to acquire repeat customers and steady sales.
If you sell on Amazon, this is not possible. Although you can send messages to customers through Amazon’s messaging system it is not possible for you to create your own email list.
Amazon wants to make it as simple as possible for customers. This includes not sending customers dozens upon dozens of emails.
These customers are Amazon’s. Amazon doesn’t care about your email list.
Amazon selling isn’t without its challenges.
Is it possible to make money with Amazon? How can you succeed?
Dropshipping on Amazon remains an option. You can do many things to make dropshipping a success, despite the disadvantages of selling on Amazon.
Find the best suppliers
Dropshipping products on Amazon is a great way to make a profit. It is important to find reliable suppliers who offer low prices. It will require a lot of research.
Don’t just pick the first AliExpress product you see. As we’ve said, you are not the only one doing it.
Spend lots of time searching Google for suppliers and using directory sites. This is a difficult decision.
Salehoo allows you to search for suppliers that are available to dropship, and whether they are working with Amazon dropshipping suppliers.
Focus On Less-Common Products
Another important point. Dropshippers are often unable to sell high-demand products on Amazon if there is too much competition.
Think about it: There will be many top-selling products if you sell eyeglasses.
Look for a supplier who offers something new.
You might find a brand or type of moisturizer not available anywhere else. It can be fun for kids or dogs, and they will love it.
White labeling is an option for your products
Dropshipping white labels is a great way to build your brand without the need to buy stock.
Dropshipping providers should not only ship the products but will also print your branding or logo on them.
Your logo can make your product standout.
You won’t be sold alongside other brands selling the same product because it is your brand. You will have different product packaging and labels.
Automate Everything
This is essential if you wish to dropship on Amazon. An automated repricing or automation tool will help you ensure your dropshipping business does not fall foul of Amazon rules and regulations.
A tool like Ecomdash automates the routing of new orders to your suppliers. If a new order arrives, your suppliers will be notified immediately so they can fulfill it as quickly as possible.
If you have large orders, it is not possible to submit each order manually. It would be too time-consuming.
It will also update your inventory automatically. You should not sell any product that is out of stock on Amazon. You may have to cancel your order or be banned by Amazon.
Inventory Source and Ecomdash both have directories built in that enable you to interact with suppliers.
Do not be afraid to ask for a refund or replacement
Dropshipping on Amazon is a business that requires generous refunds and replacements.
The products and shipping process are not under your control. Customers could receive incorrectly or damaged products.
Customers should be able to request a refund if they are not satisfied. This will ensure your customers are happy. As you can see in the above screenshot, there are minimum requirements that must be met.
Avoid selling products that are frequently damaged or require replacement (e.g. clothing). clothing)
Is Amazon Dropshipping worth the effort?
Dropshipping on Amazon is a great way to make extra cash, but it’s not the best platform for selling. Dropshipping is legal, works and has been proven to work for many.
Amazon is a source of income that can be supplemented by other streams. It is not a good idea to try to keep all your eggs in one place.
Amazon is not the only place you can focus. You can expand your reach to other online markets like eBay. Shopify can be set up to allow you to build your email database.
Amazon sellers could lose all of their income, whether they are bulk purchasers or dropshippers.
It is possible to make thousands or even millions of dollars per month, and then return to zero in just a few hours.
Multiple streams of income can help you still make money, even though Amazon bans them.
If you sell on Amazon, you can also create an email list. You can send emails to your subscribers to direct them to your website or to your Amazon listings.
Amazon FBA is a great option
Dropshipping is not allowed by Amazon FBA, but it is possible. Amazon FBA is not the best choice if you are looking to launch a business, or jumpstart an existing one. Amazon FBA is still available.
You can order a dropshipping product in bulk through Amazon FBA if you are happy with its performance.
Because you know that the product will succeed, it’s unnecessary to sell your stock.
Dropshipping can also be used to finance bulk orders.
Amazon FBA offers some of the advantages of dropshipping. FBA stands For Fulfillment By Amazon.
You basically buy stock, then you send it to Amazon’s Warehouses. After receiving orders, they store the products and ship them directly to customers.
Dropshipping allows you to do business without the need to rent or manage a warehouse.
Amazon Prime allows you to sell products. This gives you an edge over dropshippers or other sellers that don’t offer Amazon Prime.
Remote management is also possible.
Amazon FBA comes with one disadvantage: You must buy stock in bulk. No matter how well a product sells, bulk purchases can pose a risk.
Dropshipping Products You Should Use to Sell
Amazon Dropshipping is still viable. You can find almost anything on Amazon. You can find clothing, books, electronics, and workplace products. It is easiest to make income in less competitive areas.
Cell phone cases and dietary supplement sales are examples of high-priced products that should be avoided. It is important to not follow your heart but the monetary plan.
It takes a lot of research to find the right item to sell on Amazon. It will take you longer to find items that are profitable than eBay, or establishing your own dropshipping shop.
You can theoretically offer anything that isn’t in prime. Prime away Extensions allow you to do exactly that!
You also don’t want to sell items offered by Amazon or FBA sellers because you can’t afford to buy them.
It is easiest to stay in the retail space between $10 and $100 because the volume tends be there. You will save on shipping costs and storage space for smaller items. This will allow you to increase your revenue margin.
It’s all wrapped up
If you’re smart and know your way around cards, it is possible to become an Amazon dropshipper.
It is important to choose the best products for your market, to research suppliers, and to use automation tools so that customers are satisfied.
It’s also smart to diversify your income sources and not just rely on Amazon.
