Amazon Dropshipping for Beginners in 2021 Comprehensive Guide

Written by Hasham Usman

September 22, 2021

Have you ever thought about Amazon Dropshipping?

Amazon is one of the world’s most well-known shopping brands. Over 300 million peoples use amazon for shopping daily and get more than 280 billion in sales. It is highly profitable to start a business on Amazon.

Amazon offers various ways to making money on it, or amazon has four business models, which are listed below:

  • Private label FBA
  • Wholesale FBA
  • Amazon Dropshipping
  • Amazon Associates

Private label FBA and Wholesale FBA required a good amount of money to start, but it is pretty easy to start Amazon Dropshipping with no investment.

Amazon Dropshipping

What is Dropshipping?

Before we talk about Amazon dropshipping, First, we discuss how dropshipping works. Dropshipping is an inclusive approach for those who want to start their e-commerce store but do not have much money to invest or have no facility for warehousing products.

Dropshipping means selling a product without warehousing inventory, the responsibility of a product, or shipping the product buying goods from third-party suppliers. If someone places an order, then directly send it to the buyer.

For example, You buy an airpod from Alibaba at $30 and sell it on your website at $50. This is called Dropshipping. Hopefully, your doubts about dropshipping have been cleared.

Does Amazon allow dropshipping?

A big Yes, Amazon definitely allows you to do Amazon Dropshipping, but you should follow some rules:

  • Always be the seller of record for goods.
  • Identify yourself as the seller of all packing slips and invoices and other information about your product.
  • Be responsible for receiving and preparing buyer returns of your goods.
  • Follow complete terms of Amazon’s dropshipping policy.

Some examples of dropshipping that are not allowed by Amazon:

  • Buying goods from another amazon retailer and keeping that retailer ship directly to buyers.
  • Shipping orders having packing slips and invoices, and other information shows a merchant name or contact details apart from yours.

Read more about Amazon’s dropshipping policy.

How much does it cost to dropship on Amazon?

Amazon dropshipping fees depend on your selected product but are usually between 10% to 15%. If you are want to sell products with a small margin, this will take away a large portion of your earnings.

Amazon dropshipping offers a selling plan which includes Individual and Professional plans. They cost $0.99 for Individual plan and charge $39.99 per month for a Professional plan.

Learn more about Amazon’s commission fees

Is Dropshipping on Amazon Profitable?

Amazon Dropshipping can pay off. The average margin dropshippers take on selling a product on Amazon is between 10% to 15%. If they dropship through Amazon, they charge 15% of your total revenue.

Our advice is to select high-margin products for Amazon Dropshipping because dropship low-margin products on Amazon are not profitable. 

Advantages of Amazon Dropshippers

There are a bunch of benefits Dropshippers takes from Amazon Dropshipping. Some of the significant advantages of amazon Dropshipping are the following.

  • Zero warehouse cost: Warehouse cost is one of the significant expenses for dropshippers. One of the main benefits drop shippers take from Amazon Dropshipping is that there is no warehouse cost. Few Amazon sellers prefer to produce their products, and sellers ship their products to Amazon, and Amazon ships the products to customers.
  • Large audience to sell: Amazon is one of the world’s most well-known shopping brands. Over 300 million peoples use amazon for shopping daily and get more than 280 billion in sales. It is highly profitable to start a dropshipping business on Amazon. Another benefit of dropshipping on amazon is to reach new customers quickly.
  • Multiple categories to select: Amazon offers more than 30 categories to its merchants, so it’s on you to choose 2, 3, or 5 categories as you wish. 

Select an e-commerce platform

The good thing is that Shopify and Amazon partnered recently, Using Shopify, you can able to sell your products on the World’s largest marketplace. With the help of the Amazon sales channel, you can manage your products.

  • List your new products on Amazon
  • Create and track your existent products on Amazon
  • Connect Amazon account with your Shopify admin panel

If you do not have a Shopify store, start your 14 days free trial on Shopify.

Create Seller Account on Amazon

If you want to sell on Amazon, then you must create a seller account on Amazon. In this guide, we also provide steps to create a seller account on Amazon.

Step 1: Go to Amazon Seller Central to register.

Step 2: Scroll down the page under “Become an Amazon Seller”

On the right side, find the link “See Pricing – →” (under “Make Money”) and click on it.

Step 3: Select individual or professional seller account (Amazon dropshipping offers a selling plan which includes Individual and Professional plans. They cost $0.99 for an Individual plan and charge $39.99 per month for a Professional plan)

Step 4: Enter your email and select “Create a new account”

After entering your email and password, it will take you to the second, where you will enter the One Time Password (OTP) given by amazon. This is used for verification.

Step 5: Choose your ‘Company location’ and ‘Business type

In the next step of the Amazon Seller Account, you will enter your business location, business type, and Full name.

Step 6: In this step, you can enter your individual information, which includes a form of identification (unless your passport number or your driver’s license), country, date of birth, address, and phone number for verification.

Step 7: After entering your individual information, you will need to select a marketplace where you want to start your store and sell your products. For example, you want to start your store in the United Kingdom, you can simply select the United Kingdom.

Step 8: It is another way of verification from Amazon is to enter your billing information which includes your card details and billing address. It is a necessary step for creating a seller account on Amazon.

Step 9: In this step, you will add your Amazon store information which includes the name of your Amazon store, UPC codes for your product, and some other questions about your products.

Step 10: After completing all other steps, you come to the final step of the process; you will verify the address that you will enter in Step 6.

After verifying your address your seller account has been created.

 

Select the right products

There are various terms and restrictions for merchants who are willing to start their store on Amazon. 

If you are working on those products eligible by amazon, which includes books, electronic products, sports products, toys, games, etc., and others are mentioned in the list Amazon gave. 

Take a look at Amazon’s list of restricted products to ensure you are not working on products of these categories which include products like Alcohol, laser products, and medical accessories, etc.

Get approved in your product category

As you know some categories require approval from amazon. Many well-known categories like Fashion, Grocery, and beauty also need approval from amazon before starting your store on amazon. 

Take a look at the particular approval requirements for a specific category.

Connect your Amazon Account on Shopify

After getting approved and your amazon account is created, you can link your amazon account with your Shopify store. In the next step, You can go to your Shopify store, on the left panel you got the ‘Sales Channels’ button click on it.

It will get a pop-up. Amazon should be the second thing then you will click on ‘Add Channel’ and connect your Shopify store with amazon.  

Start promoting your Amazon store

After following all the steps now, you can be ready to start Amazon Dropshipping. You will generate no sell if nobody knows about your business or store. Yes, in this, we see how to get traffic to your store or how to promote your store.

You can promote your store on social media platforms, for example, Facebook, Youtube, and Instagram, or you can get the help of amazon ads to promote your store and boost more sales.

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