Dropshipping on Amazon: how to do it
For those who want to make money online, selling with dropshipping on Amazon is an exceptional opportunity. Amazon, in fact, has considerable traffic and a very high conversion rate even for products that generally are underperforming in other stores.
Moreover, if the conversion rate in any store is between 1% and 2%, on Amazon the conversion, according to data released by the company, goes up from 5%. So, why not take advantage of this golden opportunity? In the following paragraph, I’ll explain to you, how to do it.
However, before continuing with reading this article, you need to know:
How Does Dropshipping Work on Amazon
Dropshipping on Amazon is not very different from dropshipping in your store, but you have to pay attention to some little details.
First, you must open a seller account on Amazon and upload your products.
How your Amazon account works
- Create your seller account by choosing between
- Individual plan: free account with a monthly limit of 40 sales and a € 0.99 cents fee on each item sold.
- Professional plan: account with a monthly subscription fee of € 39 that allows you to sell large volumes of products.
- Access the Seller Central panel and insert your information. You will need:
- Credit card number
- Telephone number
- Your company’s details
- Contacts details
- Information on actual holders of the company
- Bank account and information
- Upload your products. To sell with Dropshipping on Amazon, you don’t need to have your own store (although we recommend it), because when you open a seller account on Amazon is like creating a small store inside their own website. After opening the account, the first thing to do is upload your dropshipped products.
- Shipping goods. Every time that you receive an order, Amazon sends you an email and a notification on your Seller Central panel. At that point, you will need to contact your dropshippers (suppliers of dropshipping products) to make then send the goods.
- Payments from Amazon: when the customer receives the goods, Amazon will deposit in your bank account the product price after deducting Amazon commissions (from 10% to 15%).
Pros and cons of dropshipping on Amazon
Amazon is a great sales platform that gives you great visibility, so even if you’ve just opened a store and you have no online visibility, you can take advantage of Amazon’s millions of visits to start selling your products. Plus the high customer trust and the high number of visits ensure a very high conversion rate.
Everything seems fantastic, but we must be realistic: Dropshipping on Amazon also has some cons.
First of all, you are solely responsible for your deliveries, so you have to be careful in choosing your suppliers and in checking the orders every day because if your goods or deliveries have some problems, your account can be closed.
Second, you must be very careful about how to choose your products, because other sellers also can sell the same products as yours at a lower price.
Third, remember that you must pay commissions on each sale on Amazon.
Start dropshipping on Amazon is very simple, but I suggest you to use it only as one of your countless sales strategy online. In fact, as an Amazon seller, you always depend on Amazon and it could happen that your account can be closed cutting off your source of income.
Furthermore, the lack of personalization of your Amazon account doesn’t allow you to increase customer loyalty or to stand out among the other sellers with marketing and better communication techniques.
So although it’s a good channel, it’s very risky if it becomes your only sales channel. It’s a good opportunity, but for me, it has to be considered only as a method to make money as you grow your own dropshipping business.
You might be interested also in this article: Dropshipping on eBay, all pros and cons.