John, how do I start dropshipping on Amazon? That’s the exact question my friend asked me when he realized that one can dropship on Amazon. I have seen and heard related questions several times. In this particular post, I wish to address every challenge you might be facing with dropshipping through Amazon. So, let’s see how you can dropship through Amazon.
Dropshipping on Amazon is done by listing your inventories on the Amazon web store and shipping the items to customers from another website (dropshipping company) when an order is placed on Amazon without you seeing the physical appearance of the items. In simple terms, you list the items on Amazon and use Fulfilled By Merchant (FBM) to deliver orders. Then when the items are purchased, you ship them from another web store to the customer.
But that is not all you need to know as a newbie. There are many factors you need to consider before jumping into the business.
Is dropshipping a good side hustle?
Dropshipping is one of the best side hustles you can do from the comfort of your home. But you need to consider so many factors and weigh your chances of succeeding in the business. Many people have tried this business and failed. A record shows that only about 10% percent of people succeed in their first year of starting a dropshipping business.
The reason why dropshipping is considered one of the best side hustles is that it does not require much from you. With less money, you can easily start the business. However, the most challenging part of the business is maintenance – the day-to-day running of the business.
It is very easy to start and that’s why many people jump into the business without second thought or consideration. But then only a few of them end up succeeding.
When you think about starting a dropshipping business, you have to consider how to manage returns, customer feedback, and also how to market your products to make sales and profit.
A lot of people complain that they spend a lot of money on marketing that they end up having nothing to show for their hustle. Marketing is vital for dropshipping business, but you don’t need to spend all your money there.
If you are spending more than necessary on ads, it means that something is wrong; either your product is not good enough or your ad campaign is not targeted to the right audience.
So to make your dropshipping business a good side hustle, you need to consider the quality of the product you are selling. That’s the number one factor that will determine whether you will succeed or not. If your product is good you will make sales, even with little marketing. Moreover, you will not be getting frequent returns unlike when you sell products of low quality.
Do you need money to do dropshipping?
There is no business that doesn’t require money, no matter how small it is. Yes, you need money to start your dropshipping business. Though the capital doesn’t require huge capital to start. But to keep the business running, you need to invest money into it.
Many started the business with little or no money but later realized that without money you can’t maintain the business.
But there is an exception here – if you are a popular figure or you have a huge following, maybe through social media or blog, you can succeed in your dropshipping business without spending heavily.
What consumes most of the money invested in the dropshipping business is marketing. So with your large follower base, you may not need to do a lot of marketing. Just learn copywriting as a skill and use it to redirect your followers/audience to your store.
Can you lose money dropshipping?
Yes, you can lose money in dropshipping business. Every business comes with a level of risk. If your dropshipping business is not properly executed and managed, you might end up incurring losses.
It is a business you have to understand very well before you can venture into it. Also, you need to understand how to create winning ad campaigns because your marketing campaign is what will determine your profit margin.
If you spend excessively on marketing you might end up losing money. So, you must understand all these factors before you start running the business.
Another thing to consider is the product quality. You have to be sure that the product you are selling is of good quality. If you sell products with low quality be ready to accept returns and that is one of the things that kill a business faster.
To prevent such from occurring, you need to test the products you are selling first. You need to sell what you believe in. If you think the product is good and can serve its purpose, then you can go ahead and sell it. But if the product is not good enough, the best thing to do is to remove it from your list of inventories.
If I have hundreds of inventories, do I have to test them all? There where the challenge lies. You don’t need to test hundreds of your items before you can sell them. But in the beginning, you must know what you are selling. Start with a few products that you can test.
Then you can add more items to your list when you want to scale the business. At this point, you will not be able to test all products, but at least, you are now sure that you have enough capital to handle returns.
How can I drop ship without money?
Yes, you can do dropshipping business without money. But, this dropshipping method is not the standard method where you need to sell through an online store.
You can also call this free method a dropshipping business because it uses the same model. It is also a form of affiliate marketing. If you want to run a dropshipping business without money, you need to have a social media presence with many loyal followers.
All you have to do is to make arrangements with local stores. You then sell their products on your page. Once you get an order you forward the shipping address to the store to ship the product(s). In this case, your page is serving as the online store/shop while the local store is serving as the dropshipping company.
Nevertheless, this free method we just discussed is not the normal dropshipping we all know. There is no way you will do standard dropshipping without money.
Dropshipping requires proper investment and execution. You need to test some of your products. You also need to market them to make good sales. All these things require money. More so, extra capital is required to handle returns if anyone comes.
So, you need money to start your dropshipping business. If you do not have the money yet, it is advisable to start saving money for it.
Can you drop ship without a website?
Yes, you can do dropshipping business without having your own website. Though it’s good to have a website, if you can’t afford one there are cheaper alternatives. There are many online stores where you can easily start your dropshipping business with less investment.
Some of these web stores are Amazon, eBay, Etsy, Walmart, etc. You need to pay fees to sell in these stores. But you can start with a free plan as some of them have free plans. Amazon is one of the best online shops to start a dropshipping business.
Is dropshipping legal on Amazon?
It is not illegal to do dropshipping business on Amazon. Amazon allows you to do drop shipping or use a third-party delivery agent, but you need to be sure that the invoice and packaging details or information indicate your name.
If the packaging information bears the name or contact address of another seller or third-party agent, Amazon will suspend your account. Many sellers have had their accounts suspended due to this little mistake.
So, make sure that when you are dropshipping, all invoices and packaging details bear your names and contact details alone. This is why it is not good enough to use another retailer for dropshipping. Even if you want to use one, do your best to let them know the nitty-gritty of the business. Let them use your details in the packaging and invoice instead of their names.
Go to this page to learn more about dropshipping on Amazon.
Is dropshipping on Amazon profitable?
Yes, dropshipping on Amazon is profitable as long as you plan the business well. As long as customers are seeing your products on the Amazon store and making orders, it’s highly profitable.
With dropshipping you pay fewer fees because you will have no inventory that will require you to pay for storage fees. So, it’s very profitable if you are getting sales.
But you have to be very careful with your marketing strategy. Most people that failed in dropshipping business reported that almost all their profits went into marketing. If you don’t get it right, marketing can eat all your profit and demand for more.
So, make sure you are marketing the right products to the right audience. The platform matters a lot too. You need to understand how different advertising platforms work and the ones that will suit your type of products.
Another thing to take note of is the quality of the product. If you sell bad products you will get many returns and that will cost you a lot. So, you need to plan your business well before you execute. If your products are of high quality and you market to the right audience, then you can make fortune from your dropshipping business.
Amazon has provided everything you need to succeed, it’s only left for you to learn how to beat your conditions and win the market. If you can do that, you will never regret starting the business.
How much do Amazon dropshippers make?
New Amazon drop shippers make between $1,000 – $30,000 per month. But those that understand the market very well make more than that. A good product with high demand and low competition can generate $50,000 – $100,000 per month.
However, you need to know that the success rate is very small, about 10 percent of newbies succeed in the market. Most of the people that failed did not understand the market very well before they jumped in. Dropshipping on Amazon is not a business you can just wake up one morning and start. You have to plan well before you execute.
As a newbie, you don’t need to enter a highly competitive market. If you do so, you will get crushed by the big guys in the niche. Find a niche with very low competition and high demand. You can only survive in a competitive niche if you have a rare product that solves a unique problem, or you have the money to market hell out of it. If not, find a good niche with low competition.
There are many sellers in tiny niches that are making $100,000 – $1,000,000 per month. The demand is what matters a lot. Many sellers are struggling today because they are following the trends. If you want to make a fortune in this business, you must learn how to discover your own trend. Proper research in the marketplace is all it takes. Find the gap and make your entry glorious.
How much does it cost to start selling on Amazon?
You need a $39.99 monthly subscription fee to sell on Amazon as a professional seller. If you don’t have that amount to start, you can register as an individual seller. An individual seller account is free, but it charges a $0.9 fee for every sale you make.
How much money do you need to start dropshipping on Amazon?
All it takes to start dropshipping on Amazon is the monthly subscription plan that costs $39.99. You can even start with the free plan that charges $0.9 for every sale you make.
However, you can’t start dropshipping on Amazon without money. You need money to test the products you want to sell. You need money for your initial orders because Amazon will not pay you immediately. It takes up to 14 days before Amazon can release your money. This means that you will use your money to order the items from your dropshipping company.
Moreover, you need extra cash to handle returns and refunds in case you get any. So, you need money to start the business. But the money you need depends on the type of items you are selling. The money you need to start dropshipping items of $5 – $50 will not be the same amount of money you need to start dropshipping products that cost up to $1,000.
So, there is no direct answer to that. If you are selling low-cost products, you may need up to $2,000 – $5,000 to start. You may make over a hundred sales in your first 10 days and you need money to take care of the orders. If you are selling high-cost products, depending on the actual price, you may need up to $50,000 – $100,000 to start.
What’s better, dropshipping or Amazon FBA?
Both dropshipping on Amazon and Amazon FBA are good business models. It depends on what the seller wants. If you have a limited budget to start selling on Amazon, then drop shipping will be the best option for you since you don’t need to buy inventory upfront.
But if you don’t want to go through the hurdle of handling orders and customer services, Amazon FBA will be the best option for you.
The difference between the two business models is the order processing. In Amazon, FBA orders are fulfilled by Amazon while for dropshipping, orders are fulfilled by the merchant. So the drop shipper takes care of packaging and delivery.
However, both sellers are selling on the same marketplace to the same customers. In summary, Amazon FBA costs more and requires fewer hurdles while dropshipping requires less capital but more work from the seller.
Is it better to dropship on Amazon or Shopify?
Dropshipping on Shopify is better if you have enough capital to take care of the monthly subscription plan. Amazon may seem to be cheaper to start with but the little charges here and there are too much.
Many Amazon sellers will cry and tell you that Amazon is ripping them off. As a seller on Amazon, it’s hard to know the actual amount you are getting from your sales because of different charges from Amazon.
But with Shopify, you have control over everything. Once you pay the monthly subscription and the 1-2% transaction fee, you know how much you are getting. Moreover, no group of people can wake up one morning and say they are suspending your account as it is a common experience with Amazon sellers. So with Shopify, you are your own boss.
Another thing to consider is the ease of use. With Shopify, you can automate everything with plugins. Some plugins will help you to do less of the order processing. Once you set it up, customer orders will automatically be sent to the dropshipping company. So, you have less to do, unlike Amazon where you need to do most of the order handling manually.
But here is where the problem lies; will customers leave Amazon, eBay, Walmart, and other trusted e-commerce sites and come to your site? How do you want to win them over? Without proper branding, it is hard to start selling on a personal online store. People are afraid of being scammed, so you have to find a way to build trust first before you can start selling in your store.
This is the major reason why Amazon is still the best for new sellers because they have the market. Amazon has millions, if not billions, of customers around the globe. It already has a trusted track record with many years of success.
So, dropshipping on Amazon is better than Shopify if you are a new seller with a limited budget and you don’t have ready customers yet. It takes time to build trust, so your business might struggle when you are starting if you don’t have loyal customers already.
Moreover, Amazon has a free plan where you can just start selling without the usual monthly subscription. But you will be charged a per-item fee of $0.9 for every sale you make.
So, the answer to the question depends on what you want and what you have. However, if you are an influencer or you have a huge following, you can start your Shopify without struggling. Your loyal followers can be your first set of customers. A lot of people have succeeded in dropshipping through this method.
More so, you can use marketing to boost business growth. Irwin Dominguez, one of the most successful drop-shippers in the whole world said that marketing is the life of his business. But it requires money, so consider your budget before deciding the platform to use.
Can I dropship from AliExpress to Amazon?
Yes, you can drop ship from Aliexpress to Amazon. It is not illegal to do so. You can dropship from anywhere as long as you have the right to resell the item you are dropshipping.
But you have to be careful when you are doing so because many sellers have been suspended due to counterfeit product claims and/or deceitful seller contact details. Like we stated above, you need to have the necessary document(s) before you can sell any product through Amazon.
If you are caught engaging in activities that are against Amazon policy, you will be suspended. So, the best thing to do is to go through the policy and understand what is acceptable and what is not acceptable.
In a nutshell, you need an invoice for all items you are selling through Amazon. The receipts you get from stores are not invoices. An invoice is usually issued by manufacturers or authorized distributors. So make sure that you are getting your products from authorized distributors if you can’t get them from the manufacturers.
Another thing to have at the back of your mind is that the packaging details must not have the contact details or address of a third-party seller or drop shipper. The packaging details must carry your contact details instead. These things are critical to your long-term success on Amazon as a drop shipper.
So you need to be careful with the distributors you are dealing with if you must use Aliexpress. Some of them are not trustworthy. So find someone you can trust and use the person. If you can achieve that, Aliexpress is one of the best sites to use for dropshipping.