There’s no two ways about it, Amazon is an excellent platform for drop-shippers to run their business. It’s a great way to get your chosen products on the internet without even having to set up your own website and all the costs and effort associated with that.
Here we have for you a brief guide on how you can drop-ship via the Amazon platform, and we will also tackle some pressing questions along the way.
Let’s get straight to it.
Pros and cons of drop-shipping with Amazon compared to wholesaling and private label
First the pros. You have low startup costs, it’s quick to set up, the business is fully automated, and potential products are easy to research.
Then, the cons. Competition on Amazon can be quite high. If the suppliers for your chosen products are overseas, this could really slow down delivery times.
And lastly, you are unable to carry out any quality checks on the products, because they are bypassing you completely.
Before you start drop-shipping with Amazon
Amazon’s guidelines on drop-shipping
If you want to drop-ship with Amazon, the first thing that you should do, before you even set up an Amazon seller account, is to become familiar with their rules and regulations. For Amazon’s guidelines on drop-shipping with them, please click on this link.
Please note that this is very important, and if you were found to not be adhering to the policy, your Amazon seller account could be suspended.
Amazon selling plans
With the Individual plan, you’ll pay 75p every time you sell an item. The Professional plan costs £25 per month, no matter how many items you sell.
For both plans, Amazon also collects a referral fee on each sale, which is a percentage of the total transaction and varies by product category. Head over to Amazon’s guide to selling on Amazon for more information.
Understand your VAT requirements
You should also look into whether you’ll need to pay VAT, and if so, you should get all this set up before you start.
How to drop-ship with Amazon
Drop-shipping with Amazon is easy. There are only really 4 main steps to be concerned with. They are as follows…
Step 1 – Create an Amazon seller account
Simply head over to sellercentral.amazon.com, where you can choose from an individual or professional account, and then proceed to set up your seller account.
Step 2 – Find one or more great products to sell
When looking for products to sell on Amazon, you should look out for products where there’s a relatively high demand, but where there’s also low competition. You can do this by using a tool like Jungle Scout’s Opportunity Finder.
Step 3 – Check with a supplier to see if the product is available
You will also need to find a supplier for your chosen product/s…
One of the easiest ways to do this is by using a business-to-business website such as AliExpress. It is set up to put ecommerce entrepreneurs such as yourself directly in touch with suppliers that are looking to drop-ship their goods.
Take particular note of the product costs, the shipping costs, and of the expected delivery time.
Step 4 – Create an Amazon listing for your chosen product/s
From your Seller Central account, go to Inventory > Add a product. Then click “Create a new product listing.” Then proceed to fill out all the information for the listing.
Remember, when setting a price for the product, you must take into account Amazon’s fees. How much Amazon’s fee will be will depend, first of all, on how your seller’s account is set up, i.e. whether it’s as an individual seller, or as a professional seller. Amazon’s fees can also vary according to what category the product is in.
Then, when you are ready, you can publish the product listing and start making some sales.
Top tips on promoting your Amazon listing
Tip 1 – Drive traffic to your Amazon listing
This can be done in a number of different ways. These include blogging, email marketing, and posts on social media platforms. You can also take advantage of Amazon’s internal sponsorship program, Amazon Pay-Per-Click.
Tip 2 – Get samples
Before you list your product, you would be well advised to order samples, so you can get to know the product and have confidence in it before you sell it on to anyone else.
Can you drop-ship on Amazon from AliExpress?
We are pleased to confirm that yes, you can import products from AliExpress and sell them on Amazon for a profit. In fact, it’s one of the more popular ways to drop-ship products with Amazon. We would go so far as to recommend it.
Should I drop-ship on Amazon or Shopify?
To be perfectly honest, both platforms have their pros and cons.
Pricing and Fees
When it comes to pricing, Shopify wins over Amazon. Shopify’s cheapest plan comes in at just $9 per month, whereas Amazon’s free seller account charges you a minimum of $0.99 on each sale.
And when it comes to transaction fees, Shopify usually charges around 2%, whereas the transaction fees on Amazon depend on the product category. And this will in turn affect your profit margins.
Also, many customers have already grown to trust Amazon, whereas this may take a considerable amount of time to establish on a Shopify website.
Whereas most people will pay for products on Amazon by debit or credit cards, Shopify offers customers numerous ways to pay, including PayPal and the like.
Amazon offers a very handy fulfillment service through its Fulfillment By Amazon (FBA) program. Through the FBA program, Amazon will store, manage and ship your products for you.
Shopify does not offer such a service, however it is perfectly possible to integrate Shopify with third party fulfillment services, such as Amazon FBA.
It’s hard to say whether there’s a clear winner here. You could potentially make more money through your Shopify store because of the reduced pricing and transaction fees.
But on the other hand, if you were to use Amazon’s FBA program, you would get a more seamless service, and generate fewer hiccups along the way.