Last Updated on August 18, 2020
As an Amazon vendor, to be effective, you have a lot of different things to juggle with. The art of effectively mastering and handling drop shipping is one of the most significant–and trickiest–elements of internet selling.
We’ll inform you all you need to learn about this essential aspect of your company in this article, including the 24 best shipping suppliers for 2019.
For this article, a fast guide:
- What is drop shipping?
- How does Amazon drop shipping work?
- The Pros and Cons of Amazon drop shipping
- How do I find a reputable drop shipper?
What’s the dropshipping?
For the uninitiated, drop shipping is a supply chain process whereby products ordered by a seller are delivered directly to the customer or to an Amazon warehouse from the wholesaler or manufacturer without first going to the Amazon seller who bought them.
Put simply, an Amazon seller will order a product online from a supplier and will then transfer the sale to their chosen drop shipping company who will then deal with processing and delivery.
For Amazon vendors, drop shipping is essential, especially for those who sell big amounts of product.
The benefits of drop shipping are that to start with there is little economic outlay, and vendors can comparatively readily’ dropship’ low-performing product. Although drop shipping exists to make life simpler for a seller, it is not without its pitfalls and it may take a little practice to prevent expensive and time-consuming errors.
How does Amazon drop shipping works?
The following step-by-step drop shipping manual will assist you prevent many sellers ‘ prevalent errors when they begin.
The first thing you need to do is define your product–and that product’s provider.
Once you are satisfied that this is the product you want to sell, contact that provider to discuss your demands–at this point, it is really essential to make sure that the provider is pleased to process orders from you to deliver to your client directly.
Then you will have to negotiate with your provider on rates. Look closely at your pricing; to create a profit, the price you pay to your provider must be considerably smaller than your end-customer’s cost paid to you.
You’re prepared to start selling once you’re pleased with the item and the conditions agreed with your provider.
A guide to assist you comprehends the Amazon drop shipping method is as follows:
- Identify your product and link up with your chosen supplier.
- List your product on Amazon and begin promoting the product.
- Customer places an order with you (The Seller).
- You forward the customer’s order to The Supplier.
- The supplier will already have your payment details and, payment will be taken per order.
- The supplier will then ship the product to the customer directly. Although the package will come from The Supplier, the paperwork will state that it comes from yourself and will include all of your relevant information so that The Supplier’s identity is not revealed.
Since payment is made by the provider at the moment of that order for each order, you must guarantee that funds are accessible to guarantee that the order can be delivered and delivered in a timely way.
Since the client will only have your contact information, you will be accountable for liaising between the client and the provider on any problems such as failure to deliver or damage to the product.
Amazon’s Pros and Cons on drop shipping
As with anything else, there are pros and cons to drop shipping and you need to weight these carefully to make sure it’s the right choice for you.
Time–Drop shipping saves an enormous quantity of time for Amazon vendors; especially those who sell a big product quantity. This allows you to concentrate your time on marketing your product.
Expertise–Usually your provider will be highly experienced and will be completely aware of the best and fastest ways to professionally package and deliver the item.
Finances–Your original economic outlay will be minimal as you will only pay for the item per order instead of purchasing inventory in advance.
Space saving–Because you don’t have to buy bulk stock, you don’t have to find room to store a big quantity of item waiting to be sold.
Flexibility–If a product does not perform well, you can stop selling it with a minimum amount of fuss and cost, whereas if you have purchased bulk inventory in advance, you may end up storing it or throwing it away if it does not sell.
Volume–Without worrying about economic outlay or storage space, you can deliver a big amount of distinct goods.
Profit–You’re going to have to pay the supplier for this service that’s going to eat in the earnings on the sale.
Control–You will need to depend on the Supplier to package the product on your behalf and deliver it properly.
Rules–Amazon has a number of rules and guidelines for drop shipping and you have to make sure that you abide by these regulations or risk being penalized.
Reputation–It is your reputation that will suffer if the supplier offers the client with an inferior service.
How do I discover a dropshipper with good reputation?
Needless to say, you need to make sure that your chosen company is qualified, reputable and reliable when choosing a drop shipper. Again, on the line it’s your reputation, so this is one of the most significant choices you’re going to make.
Unfortunately, as Amazon sales are becoming more popular, a number of fake drop shippers and wholesalers have sprung up and it is essential that you can recognize and avoid these.
- Fake drop shippers are unscrupulous people, often at very low prices, claiming to be providing Amazon sellers a drop shipping service. Most of these fake drop shippers will ask for some type of front-end payment that they will call’ administration fees,’ often claiming it is paying for your identity verification and setting up your account.
- It can be hard to spot the uninitiated, fake drop shippers as, after all, all that is really going is a website with a payment portal–something that can be held for just a few bucks by anyone.
- Fake drop shippers are often going to ask for a big upfront fee that should be an instant red flag–a legitimate drop shipping business will charge you only for each order.
- Fake drop shippers often direct your payment to a PayPal account because PayPal accounts are relatively easy to set up with a very little verified business name.
Beware of drop shippers that don’t require you to set up an account before starting company; drop shippers are wholesalers and therefore require each vendor to maintain an account with them.
If you think a drop shipper might not be real, attempt to verify your suspicions:
- Look at the telephone number given to see if it looks like a company number–try calling it to find out if the call is professionally answered.
- Do a quick Google search for the name of the company–a scam or fraudulent company will have a number of red flags online in many instances.
- Check a company registration number on the website; this can be verified online at Companies House (UK) and equivalent U.S. authorities.
There are plenty of excellent and trustworthy drop shippers out there – directories like Salehoo will keep you up-to-date with drop shipper listings for a $67 annual fee – a tiny amount to pay for data about the best drop shippers out there.