How Dropshipping Works on Amazon
There is no way to go but up for Amazon. Business pundits predict that thousands of e-commerce businesses will do their commercial transactions with Amazon. And a little less than 10 percent of these entrepreneurs will be doing dropshipping businesses.
It’s no surprise that Amazon will be the place to go for dropshipping. So how does this business model work on Amazon? For those who don’t know what dropshipping is — it is an online business model where the seller takes orders from a buyer and courses them through a supplier. The sellers, who are called drop shippers, sometimes sell goods and make it appear as if the goods are their own.
A usual dropshipping transaction on Amazon goes something like this: A buyer purchases a product found on the Amazon listing. As soon as the sale is completed and the seller gets paid, the seller will purchase the product from the supplier and provide the latter with the buyer’s information. And then the supplier packs and ships the item directly to the customer.
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It’s very convenient for the seller so that is why dropshipping is a very popular business among the young aspiring entrepreneurs who do not have enough money for capital to get their business going. There are other profitable ways of doing business on Amazon. You can either have your own private label or go into wholesale.
A private label is when you manufacture your own goods and then put them on Amazon listing for sale. For wholesale, you can buy products in big numbers from a supplier, and then you can resell these to another seller or sell the items yourself. But many opt for dropshipping on Amazon because it has more upside compared to other business methods.
For one thing, in dropshipping, you don’t need to store your products. You don’t have to have your own stocks. It’s very simple, once your buyer completes the transaction with you, all you need to do is go to your supplier, purchase the product and let them ship the item straight to your buyer.
Because of that model, it’s easier and faster to set your business up. You don’t need to manufacture your goods or store them or ship them. It’s all laid out for you — all you need to do is make a sale — and you’re good to go.
Another upside of dropshipping on Amazon is you can easily automate your business through a variety of plug-ins and apps. The steps can be done in a breeze. Plus Amazon has a lot of products from manufacturers which will give you an idea of which ones are selling well, and which ones you want to promote and sell.
However, that also means, you will have a lot of competitors. But as they say, the world is vast and that is your fishing ground. The upsides far outweigh the downside.
It’s not that complicated to set up your Amazon account either. Should you decide to be a drop shipper on Amazon, just set up an Amazon seller account. Go to sellercentral.amazon.com. Type the kind of account you choose — professional or individual. A professional seller will pay an 8-15% referral fee to Amazon.
While the individual seller pays $1.00 on top of every sale. After picking out your type of account, it’s time to find a product to sell. Look for high-demand products. Make sure you get a good number of products to check out in different categories.
Don’t get overwhelmed, just try to keep things simple. If you’re just starting out, it’s best to pick out easy, common, saleable products like garden stuff, sports and outdoors stuff, and the like.
After that, it’s time to create your Amazon listing. Go to your seller central account, go to Inventory and then choose “Add a product.” And then click “Create a New Product listing.” Choose your product category, and then you have to fill out the information for the listing.
One important thing to remember is the pricing. Remember to factor in your fee for Amazon — it depends on whether you are a professional seller or an individual seller. At last, you’re all geared up. You can now publish your Amazon listing and start selling!
Setting the dropshipping business on Amazon is pretty straightforward and almost trouble-free. However, if you want to achieve success in dropshipping, you need to give it your time and effort. There is no easy dropshipping business, or any business, in general…because if it were easy, everyone would do it.
You can put on as many items as you can — that way you’ll know which ones are really saleable. Make sure to take care of your buyers. Satisfied buyers equal good reviews; and good reviews equal more customers. Finally, stick to and abide by Amazon’s rules. Stay focused and organized. Work earnestly, and by doing so, no one can stop you on your way to success.