You’ve probably heard of dropshipping by now. It’s become quite a catchphrase in recent years, as more and more people look for ways to start their businesses.
Amazon is one of the most popular platforms for dropshippers. This is a trusted and well-known platform with a huge customer base. This gives your business instant credibility.
But what exactly is dropshipping? How does it work? And how can you start your own profitable dropshipping business on Amazon?
You’ll get answers to all your questions in this article. So, if you’re curious about starting your own dropshipping business, read on!
What is Amazon Dropshipping?
Dropshipping is the method where you don’t keep products in stock. When an order comes in, you simply contact your supplier and they will ship the product directly to your customer.
Dropshipping businesses are often very profitable because they require very little start-up capital and can be run entirely from home. This allows you to sell a wide range of products on Amazon without having to carry any inventory.
How Much Does It Cost to Start Dropshipping Business on Amazon?
When you’re dropshipping on Amazon, there are three main costs: the cost of goods, the cost of shipping, and the cost of Amazon fees.
The cost of goods is the cost of the products you’re selling. This is going to vary depending on what kind of products you’re selling and where you’re sourcing them from.
The cost of shipping is the cost of getting the products from your supplier to Amazon. This can be done either through a fulfillment center or by using a service like Fulfillment by Amazon (FBA).
The cost of Amazon fees is the fees that Amazon charges for listing your products and for each sale that you make. These fees are generally around 15% of the total sale price.
So, to start dropshipping on Amazon how much do you need? It depends on several factors, but you can expect to spend somewhere in the range of $500-$1,000 to get started.
How to Start Dropshipping Business on Amazon?
To start a dropshipping business on Amazon you need to remember these things:
- Find a good dropshipping supplier. There are many different ways to find dropshippers, but the best way is to use a dropshipping directory.
- Create a professional-looking Amazon storefront. This can be done with Amazon’s Seller Central platform. After creating your storefront, you will need to list the products that you want to sell.
- Drive traffic to your store by using Amazon’s pay-per-click advertising program.
- You will need to bid on keywords that potential customers are searching for on Amazon. If you bid high enough, your ad will appear at the top of the search results and you will get clicks from interested shoppers.
Once you start getting orders, it is important to fulfill them quickly and accurately. Dropshippers usually have very good turnaround times, so this should not be a problem.
However, if there are any issues with your orders, it is important to communicate with your customers and resolve the issue as soon as possible.
Just remember to always offer great customer service and keep your prices competitive to succeed long-term on this platform.
Advantages and Disadvantages of Dropshipping on Amazon
Advantages:
It’s a very famous platform with a lot of traffic. This means that there is the potential for a lot of sales.
It’s a huge market with millions of potential customers. Dropshippers can also take advantage of Amazon’s vast infrastructure and world-class fulfillment network.
When you make a sale, the order is sent directly to the supplier who then ships it out to the customer. This means that you don’t have to keep any products in stock or worry about shipping them yourself.
There are millions of products available to sell. This gives you a lot of options and makes it easy to find products that your customers will want to buy.
Amazon is a trusted brand name with a reputation for quality customer service. When customers purchase products from Amazon, they know they’ll receive their items quickly and safely.
This level of trust can be difficult to establish when selling through less well-known online platforms.
Disadvantages:
There is the potential for scams. There are many stories of people who have been scammed by dropshippers on Amazon.
Dropshipping can be a slow process. It can take weeks or even months to get your product from the supplier to the customer. This can be frustrating for customers who are used to getting their products quickly from Amazon.
Dropshipping can be a bit more expensive than other methods of selling on Amazon. This is because you have to pay for shipping and handling, as well as the cost of the product itself.
On Amazon, there is too much competition. There are already a lot of established businesses selling products on Amazon, so it can be hard for new dropshippers to get noticed.
Best Software required for Dropshipping on Amazon
Jungle Scout
Jungle Scout is Amazon dropshipping software that allows you to source products, track competitors, and manage your inventory and orders all in one place.
With Jungle Scout, you can quickly and easily find high-demand products to sell on Amazon.
The software also provides detailed data on competitor pricing and sales volume, so you can make sure you are always offering the best price.
Jungle Scout makes it easy to track your inventory and orders, so you can keep your business running smoothly.
The software also includes powerful tools for managing customer reviews and feedback.
Spocket
Spocket is a dropshipping software that allows you to source products from US and EU suppliers.
Spocket offers a free trial so you can try out the software before committing to a paid plan.
With Spocket, there are no upfront costs or monthly fees – you only pay when an order is placed in your store.
This makes it an extremely cost-effective way to start dropshipping on Amazon.
Because orders are fulfilled by suppliers in the US and EU, delivery times are typically much shorter than if you were sourcing from Asia.
This means that your customers will be happy with their purchases, and they’re less likely to return items (which saves you money in the long run).
Sellery
Sellery has built-in features specifically for Amazon sellers, such as automated listing and pricing tools.
With Sellery, you can automatically list and price your products on Amazon, which saves you time and makes it easy to keep your listings up-to-date.
Helium 10
Helium 10 is a comprehensive suite of tools that will help you find profitable products to sell on Amazon, track your listings, and optimize your listings for maximum visibility.
With Helium 10, you can start and grow your Amazon dropshipping business with confidence.
7 Tips to Improve Your E-Commerce Business
1 – Do your research. This may seem like an easy task, but it’s important to do your homework before setting up shop.
2 – Familiarize yourself with the platform and understand how it works. Research your competition and learn what they’re doing right (and wrong).
3 – Start small. It’s tempting to try and go big from the start, but it’s often best to start small and scale up as needed. Build up a solid customer base and then expand your product offerings and/or increase your prices as you see fit. Slow and steady wins the race!
4 – Offer quality products. People can’t physically inspect your products before buying them, so it’s crucial that whatever you’re selling is high quality and accurately described. If you can build up a reputation for offering great products, customers will keep coming back for more.
5 – Provide excellent customer service. Again, this is important for any business but even more so in e-commerce where customers can’t just pop into your store to return an item or ask a question. Instantly answer customer inquiries.
6 – Maintain a high seller rating. A seller rating is a percentage that reflects the average star rating you’ve received from buyers, and it’s one of the key factors that Amazon uses to determine whether or not you’re a good supplier.
By maintaining a high seller rating, you’ll not only improve your chances of being successful on Amazon, but you’ll also attract more customers and build trust with potential buyers.
7 – Price your products carefully. If you price your products too high, you will likely have difficulty selling them.
On the other hand, if you price your products too low, you will not make enough profit to sustain your business.
Competition is also a key factor in pricing. Take a look at what similar products are being sold on Amazon and price your product accordingly.
It is important to remember that you need to make a profit; so, don’t always go with the lowest price point just because it seems like what everyone else is doing.
Once you have considered all of these factors, you should have a good idea of what price point will be most profitable for your business.