How To Dropship On Amazon (Step By Step) And Earn Money Passively

How To Dropship On Amazon (Step By Step) And Earn Money Passively

You have probably heard that dropshipping is the best way to start your online business and wonder if it is possible to use this method on Amazon. The answer is yes. You can dropship on Amazon and earn money by finding trusted suppliers and a specific niche market. Let’s see how to start earning money from home with this method.

Is it possible to dropship on Amazon?

Dropshipping is the process of selling a product without the responsibility of physically having it. It consists of having a reliable supplier that sends the merchandise every time you make a sale. This allows you to have your virtual store on the Internet without having to invest too much.

If it is possible to do dropshipping on Amazon.

Many sellers rely on dropshipping as a way to make money on Amazon and make living selling products online. Depending on the products you are selling with dropshipping it may be better than selling with Amazon FBA.

That being said, Amazon has recently put in place some restrictions to prevent abuse from dropshipping sellers. For example, the company established that orders can only be processed through Amazon’s FBA program.

Using a Chinese supplier or buying from AliExpress and having the seller ship the product directly from China is against the seller’s agreement with Amazon. The agreement states that “you are not allowed to purchase products from another online retailer and have a third party ship directly to customers.”

 

Advantages of dropshipping on Amazon

Among the advantages of starting your dropshipping business on Amazon are:

You do not pay storage costs

One of the most notable benefits of Amazon dropshipping is that you do not need to pay for the cost of a warehouse or to send your products to the Amazon warehouse. For example, when selling with the Amazon FBA program, you must first purchase the products and then ship them to Amazon’s warehouse, which then ships the products to your customers.

By dropshipping on Amazon you can save costs, it allows you to offer lower prices to your customers and you will have an advantage over the competition.

You sell more products to a specific niche

The secret to being successful in an online business: focus on a specific market niche.

If you’re interested in dropshipping on Amazon, start with our free interactive guide: Finding Your Most Profitable Niche in which we help you find the best niche that best suits your personality.

Having Amazon as a sales channel for your business can mean great returns. By focusing on the right niche market and the right product at the right price, you can earn thousands of dollars a month without having to invest a lot of money before seeing good profits.

Less advertising expenses or commissions on Amazon

Amazon allows you to place ads to make your products more visible in searches. By dropshipping on Amazon, you can benefit from the traffic Amazon receives by ranking well on Google and other search engines.

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While we still recommend starting a website for your online store, you won’t have to start from scratch. By promoting your products on Amazon you receive visits much faster, with less effort. It’s a smarter way to start your internet business.

Disadvantages of dropshipping on Amazon

As you can imagine, dropshipping on Amazon also has some disadvantages. Mainly, because Amazon has created some rules to prevent some sellers from abusing the dropshipping process, especially if you plan to sell products from China or suppliers like AliExpress.

The problem is that the processing time for products ordered from China may take a long time to reach the customer. This means that customers become impatient, resulting in fewer satisfied customers and more cancellations.

How to dropship with Amazon (step by step)

As we have already told you, the easiest way to dropship on Amazon is through its Fulfilled by Amazon (FBA) program. In this program, you have to ship your products to an Amazon warehouse and they ship it directly to customers.

Although you can also dropship on Amazon and ship your products, due to recent changes, this would be out of the seller’s agreement. That being said, MANY sellers still use a third party to ship their products without any penalty.

Since the goal is to have a truly long-lasting online business, we’ll show you how to dropship on Amazon without risk or breaking the seller’s agreement.

Research what to sell on Amazon

Your success in dropshipping on Amazon will depend in large part on what products you sell. For this, you must find a market niche that you are passionate about and then find suppliers with attractive prices for you and your customers.

  • How to know what to sell on Amazon? 

Once you have in mind which products to sell when dropshipping with Amazon, it will be time to create a seller account.

Find reliable suppliers

Finding a reliable supplier will be necessary for the success of your business on Amazon. Depending on your niche, you will find the best prices from Chinese suppliers on AliExpress or sites like DHGate.

This will allow you to send the products to your customers from the moment you receive your first order. It’s a good idea to buy a product, inspect it, and test it for yourself before selling it on Amazon. This way you make sure that your customers will be satisfied.

Ideally, the supplier should not take more than 14 days to get the product to the customer.

Where to find reliable suppliers for your Dropshipping business? Chinese suppliers probably take too long to ship your product to the destination country, so your best bet is to look for suppliers in the United States or reliable local suppliers. Our favorite strategy to find good suppliers: study your competition.

You may have to search the header, footer, sidebar, or even sitemap to find the suppliers of a dropshipping page, but once you do, you’ll be rewarded. Especially since a single provider can give you access to 10, 20, or even 100 brands of products.

When studying each dropshipping site in your niche, you should start a “Supplier Master List”. This will be the base of operations for your business and with it you will create a registry of all possible dropshipping providers for your niche.

To help you get started, we’ve created a supplier list template that will help you find quality suppliers to dropship on Amazon.

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By visiting multiple sites and with a little patience, you’ll quickly find more suppliers than you need to make money from your dropshipping business.

It’s important to note that just because you’ve found X number of providers doesn’t mean they’ll all approve your account on day one. However, the more suppliers you have, the better it is for your business.

Create an Amazon seller account

It doesn’t matter if you plan to dropship on Amazon or sell products with Amazon FBA, you will need the same seller account. Best of all, you don’t need to be in the United States to sell on Amazon.

This opens up a great opportunity for you to earn money since you can start a dropshipping business on Amazon from any country in the world.

To open an Amazon seller account, follow these steps:

  1. You will need to open a regular Amazon account, then you can convert it to a seller account.
  2. Visit Amazon Seller Central to convert your customer account to a seller account
  3. To register as a seller on Amazon you will need:
    1. A business name or personal name
    2. Valid phone number (does not have to be from the USA)
    3. valid credit card
    4. Tax information (valid social security number,  if you don’t have one)
  4. If you need help filling out the registration form, follow the steps in our article: How to open an Amazon seller account where we guide you step by step.
  5. Add your products to Amazon

After opening your seller account and being approved, you will be able to add your products to Amazon listings. Since this is a dropshipping business, we’ll assume you’ll be adding your products to existing lists. At this time, it is important to set the ideal price.

Use the Amazon Profit Calculator to calculate the cost of commissions that Amazon will charge you each time you sell a product. You need to make sure that your earnings are high enough to be able to pay Amazon’s monthly fees and associated commissions.

For the vast majority of products, a good strategy will be to offer free shipping. This can increase your sales by up to 30%, even if people have to wait a little longer to receive the product.

You should also note if you are competing with Amazon Prime-eligible products and see if you can offer a lower price than these sellers.

Promote your dropshipping store on Amazon

Now that you are an established seller on Amazon, your goal will be to make your store known. The best method to do this: offer a discount coupon.

By creating an Amazon coupon, you get more visibility and encourage customers to buy from you. Your goal will be to offer discounts and get satisfied customers. This will help you build a good reputation and get more sales in the future.

Another good strategy is to post your coupon to sites dedicated to finding deals online. These sites will post your coupon for free and you will get more sales for your business. Remember that you must calculate the coupon discount in a way that allows you to pay Amazon’s commissions, and the cost of the product, and still be profitable.

Integrate your Amazon business with Shopify

Why settle for just Amazon traffic? Open your online store too. Amazon is a great method of promotion, but you will always pay commissions when using this platform.

If a satisfied customer recognizes your brand, you can contact them and use email marketing to promote your online store. This improves the odds of your sales while minimizing risk. By doing this, you build recurring sales and pay fewer commissions. Translation: more profit.

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We’ll show you how to benefit from dropshipping traffic on Amazon and how to increase your profits by up to 60%. By combining Amazon customers with an eCommerce platform like Shopify, you can save on commissions and get more sales for your niche.

Shopify is a service associated with Amazon that allows you to create your online store in just a few steps. This service allows you to add Amazon as a sales channel to simplify order management on both platforms.

To get started, all you need to do is create an account with Shopify and then connect your Amazon account to your Shopify store. 

After creating your online store with this service, it’s time to associate it with your Amazon account. Achieving this is very simple:

In the left panel of your Shopify account, find the ” Sales Channels” section and tap the + button next to it.

In the list of sales channels, you will see Amazon. Add the channel to your store to start the integration.

You can then associate your Amazon store and start managing your listings in Shopify.

Your goal: Get sponsored on Amazon

It’s a wonder to make money online that anyone can use Amazon as a sales platform. Better yet, if you get Amazon to sponsor you as a seller, it’s safe to say that you’ll be in for a ton of profit.

In this case, the seller Sleep Revolution is sponsored by Amazon

What does it mean to be sponsored on Amazon? You will notice that almost every product detail page on Amazon has a list of suppliers and sellers of the product. Therefore, your goal for success with dropshipping on Amazon will be to win first place. To achieve this you will need:

  1. A high seller rating, at least a 95% or higher satisfaction policy.
  2. Ship products quickly (14 days or less after the sale is made)
  3. Your costs (including shipping costs and the total cost of the product) must be less than the competition
  4. You must have a low refund rate, quick response time to customer questions, and sell quality products.

As you can see, becoming an Amazon-sponsored seller will be the best for your dropshipping business.

How much money can I make dropshipping on Amazon? + actual example

It’s not uncommon to find a seller making an easy $ 1,000-a-month dropshipping on Amazon. Earning $10,000 a month is a very achievable goal.

We know several readers that it has taken them between 6 to 9 months to reach this amount in sales. As we have said before, the key is to have a specific and profitable market niche.

A real-world example: A beer drinker home decor vendor sells display maps for $80 and buys them in China for $20.

Even if you spend $20 per sale on advertising or commissions, your net earnings are $40 per sale. Following this example, just making 8 sales a day is easy to see how it is possible to make $10,000 a month.

The beautiful reality is that there is no limit to how much money you can make selling on Amazon. But in general: the more effort and work you sow, the more profit you will reap.

Do you have questions about how to dropship on Amazon? We invite you to share your anecdotes or doubts about this way of earning money in our comments section.

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