How To Do Dropshipping From Amazon: 5 Easy Steps

Because it’s so simple and cost-effective, Amazon dropshipping has become one of the most popular ways to establish an online business. One of the best methods to get started with dropshipping from Amazon is to browse the site’s myriad third-party sellers, discover something you want, and then purchase it through your seller account as if you were purchasing something for yourself.

So If you’re interested in starting an online business, but want to minimize the amount of upfront costs you have to take on, then dropshipping from Amazon may be the ideal option for you. 

With dropshipping, you don’t need to keep any inventory on hand and deal with the additional work that comes with it-you simply sell products from other companies or merchants and ship them directly to your customers when they make their purchase.

The purpose of this guide on how to do dropshipping from Amazon is to give you an overview of what dropshipping is and why it has become so popular in recent years so that you can decide if this business model could work for you.

So,

What Is Dropshipping?

First off, it’s a good idea to familiarize yourself with exactly what dropshipping is. For our purposes, we’ll focus on the basics. Essentially, dropshipping is when an e-commerce seller orders products directly from a manufacturer or wholesaler and then sells those products directly to their customers without ever holding inventory themselves.

There are some advantages and disadvantages to using a dropshipper—the biggest one being convenience: You don’t have to worry about storing any of your own inventory. Of course, you also won’t be able to sell items you haven’t already purchased in bulk. 

Many believe starting a dropshipping business is as simple as signing up with a wholesaler, placing an order, and waiting for your first shipment to arrive. However, it’s not quite so simple. Because you aren’t purchasing a product that you intend to keep in stock (but rather just selling an existing product), there will be additional steps involved—and more behind-the-scenes planning required—before making money through drop shipping can become reality.

As such, we highly recommend becoming well versed in running an Amazon FBA business before beginning drop shipping.

A successful Amazon FBA startup requires comprehensive knowledge of:

• Sourcing and pricing products to meet market demand;
• Selecting a proper niche;
• Writing search engine optimized copy; e
• Building high converting sales pages;
• Identifying lucrative online marketplaces that offer competitive margins while providing robust traffic opportunities. 

And finally, successfully running an Amazon FBA business necessitates understanding complex tax laws and accounting requirements related to deductions, sales tax reporting, and other administrative tasks. 

With all of these considerations in mind, we cannot stress enough that starting a wholesale/dropship-based operation is significantly more challenging than taking advantage of Amazon’s retail platform by promoting private label products developed via their program.

Amazon As a Starting Point (Dropshipping From Amazon)

If you’ve never sold anything online before, one of these platforms—Amazon, Etsy, eBay, or even your own website—might be an excellent place to start. The good news is that no matter which path you choose, you will gain experience running an online store.

However, when it comes to dropshipping with any of these sites, be prepared for a bit more hustle. You won’t have the drop shipping suppliers doing most of the heavy lifting for you. In fact, depending on how much work you want to put into finding suppliers and setting up your storefront, running an ecommerce store can actually require a greater time investment than just being a dropshipper! 

Still interested? Read below for some tips.

First and foremost, if you’re new to ecommerce, Amazon is a great place to start. It has a high level of built-in trust with potential buyers because it is such a well-known marketplace and widely used by shoppers. A potential consumer may not know who you are or what your firm does, but if they have had a nice experience with Amazon in the past (which many do), you may utilize that to win them over right away.

This doesn’t mean other marketplaces aren’t viable; just make sure you understand why one might be better than another depending on your goals and target audience. 

When considering whether or not to start dropshipping from Amazon, also think about what is most important for your business: identifying products that work best for you versus keeping costs down? It’s very possible to run a successful dropship business at high costs because of demand–it all depends on how much revenue those higher-cost items create in relation to their extra expense. 

Keep those things in mind when deciding how much margin versus cost control matters most for your business. 

Ultimately, there’s no wrong answer here. You could get started with either; we wanted to present both options so you could have more context around each approach.

The Pros & Cons Of Doing Dropshipping From Amazon: 

Pros:

As previously said, using Amazon as a dropshipping platform has a number of advantages. However, there are some disadvantages! Here you’ll find everything you need to know about both sides of the coin.

Customers know they can trust Amazon and have had positive experiences with it in the past–so if they’re already familiar with and trust Amazon, they might be more willing to shop on a new website that provides Amazon-fulfilled products.

This is a definite pro to doing dropshipping from Amazon!

Another benefit to Dropshipping from Amazon is one we touched on earlier: trust. Since Amazon has such an excellent reputation, shoppers know where their packages are coming from; if something goes wrong with delivery–or if anything else happens along the way–they feel comfortable getting in touch with customer service immediately because they already trust them. If you run your own shop, then shoppers might not have anywhere to turn when issues do arise.

Cons:

While there are definitely benefits to starting your business on a platform as large as Amazon, there are also some downsides you should consider before choosing it as your primary ecommerce platform. 

The most significant disadvantage is the cost: dropshipping from Amazon will almost certainly be more expensive than doing so elsewhere. This is because third-party sellers on Amazon often charge an extra order handling fee in order for their goods to be sent, packed, and shipped again by Amazon—and all of those expenses are passed on to customers.

This isn’t always true, but depending on what kind of products you plan on selling through your shop (how much they weigh and how often they ship), these fees could add up quickly! Be sure to take stock of exactly what Amazon charges its third party sellers before committing to its fulfillment option. 

At first look, it may appear that you are saving money, but once delivery charges are taken into account, your costs may end up being identical to or even greater than those of another marketplace.

We’re not saying you shouldn’t use Amazon as your major ecommerce platform; just make sure you know why it makes sense and why there might be other good solutions as well. 

Whichever you decide upon will work just fine—but having a complete understanding of each approach helps ensure that no matter which way you go, the right steps are taken toward success.

Dropshipping from Amazon can be a lucrative business plan, and the best part is that the entry barrier is minimal, so you won’t need a lot of money to get started.

So you can get started, here are the foundations of Amazon dropshipping.

Tools You Will Need

A brain, a smartphone, and a camera capable of taking high-resolution photos. It helps if you have your own computer and access to Google. You’ll need to have access to a website that can accept payments via credit cards or PayPal (I prefer Shopify).

If you’re just beginning with your Dropshipping business, there’s a strong chance you already have all or some of these tools.

Finally, you’ll need money. It could be more than a dollar, depending on what you’re attempting to sell. In my case, I was selling t-shirts on the internet. I began with $100 in my account and then added $200 for inventory. Being a dropshipper meant I could make money by selling something I didn’t have to put any money in…aside from $300 in shirts.

So if you think dropshipping sounds like something that could work for your business, here’s how to do it correctly.

Steps To Start Dropshipping From Amazon

1. Choosing A Niche

The term “niche” is often used interchangeably. But what exactly does it imply? Simply said, it means you’re focusing your firm on a single market, service, or type of product.

For example, if you were to start Dropshipping from Amazon and sell wine, you’d be serving a niche—you’d be serving people who want to buy wine.

The great thing about having a niche is it allows customers and potential partners who care about your industry to find you more easily and gives them confidence in who they are doing business with because they see how focused and specialized you are. 

This makes you stand out among competitors and make deals easier to negotiate. You can also be less promotional and offer higher rates; since these clients/partners already know who you are, they already value your expertise! 

You can specialize even further by either joining an affiliate program or by expanding into sub-niches (e.g., shipping within wine). 

Another good thing about a niche site is that you can typically produce higher conversion rates than other types of sites because people know what to expect when they visit your site. 

2. Finding Suppliers

If you’re doing dropshipping from Amazon, then your success is tied to finding reliable suppliers. And that usually means going through a wholesaler or an import/export company.

Here are some tips for finding these companies: 

• Identify product categories where you can find products in large quantities and with attractive margins. The cheaper they are at wholesale prices, the more margin you will have once sold on your site (assuming the same price).

• Products that fall under electronics and appliances work well because they have high ticket prices but also low margins so it’s easy to make a profit off of them. 

• Find countries where there are cost savings by shipping things from overseas like Japan and China. 

• Research how long each supplier has been around and how their customer reviews are. This will save you lots of time in vetting out bad suppliers down the road when they scam you! 

• Look into filing a DBA which gives you protection when someone decides to steal your idea after selling their own version of it first.

• Set up contracts with your suppliers before entering into any formal business agreement. You don’t want to risk getting burned later on when you’ve invested months or years of your life developing a brand only to see someone come along and make off with all your hard work without even caring if they’re hurting other people in the process! 

Have a social media presence! Social media is how you’ll market your drop shipped products. Having an active Twitter, Facebook, Pinterest and Instagram account helps create loyalty between yourself and followers who want to know about new products you may be dropping soon or small giveaways that encourage people to buy from your store regularly instead of another one.

Being social online helps strengthen relationships with potential clients as well as giving you promotional opportunities throughout channels across multiple platforms!

3. Setting Up Shopify

Before you start dropshipping from Amazon, you’ll need a place to display your products. Shopify is one of my favorite ecommerce systems, and it’s also quite user-friendly.

Shopify is a simple, easy-to-use ecommerce platform that you can use to create an online store. You can sell digital and physical products with Shopify and have your products shipped directly from suppliers (known as dropshipping) or have them sent directly to customers (e.g., your own inventory).

Create a free Shopify account first, then follow our step-by-step instructions to start a dropshipping business.

Shopify Academy is a great place to go if you want to learn more about how Shopify operates and get some useful materials.

For new customers, there are even better incentives to try Shopify: access to 24/7 support via live chat or phone, $100 in AdWords credit to boost traffic and sales when you start advertising (with no risk), free store migration assistance if you’re switching from another platform, 70+ ready-made apps if you want to customize your storefront…and much more! 

Interested? Click here to sign up for a free 14-day trial and see what you think. You can even keep using their services after that initial two weeks at only $9 per month. Sweet deal, right? 😉 

4. Fulfillment& Shipping

This is one of your most significant expenses when dropshipping from Amazon and in the dropshipping business in general, therefore it’s critical to budget properly.

Make sure orders are filled quickly—if they aren’t mailed out within a reasonable amount of time, they will be canceled. Within three days following a customer’s purchase, I advocate delivering tracking information into their hands.

Finally, several fulfillment centers (such as ShipStation) allow you to specify how frequently you want merchandise delivered, such as every two weeks or once a month, based on seasonality.

By opting for less frequent delivery, you may spread your costs across fewer shipments and scale up and down at different periods of the year.

Using an app like Inventory Labs or Retail Autopilot to keep track of when supplies are running short and reorder ahead of time is a fantastic idea.

As a result, you won’t be left with a mountain of unsold merchandise gathering dust. Instead, you’ve prepared everything you’ll need for each seasonal sales surge.

I suggest using Fulfillment by Amazon whenever possible since they handle returns, customer service issues, etc. all through their dashboard. 

However, their fees do add up ($40-$80 per shipment), so you’ll need a substantial amount of merchandise moving through your store before it becomes cost-effective to ship directly from China. 

No matter who fulfills your order, ask about packaging and storage supplies! Many fulfillment warehouses offer boxes for only pennies apiece.

5. Getting Traffic & Growing Your Business

There are a few things you can do to market your products now that you’ve set up your store to do Dropshipping from Amazon. You want as many people as possible to see your store and buy from you.

The flexibility to reach clients all across the world is one of our favorite elements of Dropshipping from Amazon and Fulfillment by Amazon. There are roughly 300 million internet users in India, for example, and you can easily reach them all with FBA!

Another smart move is partnering with other retailers who have similar audiences. 

If you’re selling skateboards, try teaming up with Zumiez or Sierra Trading Post to see if they’d be interested in promoting your goods alongside their own. 

The higher the number of visitors to your website, the better! Once you’ve established your company, how well you market yourself influences a lot of what occurs next – and let us tell you, SEO (search engine optimization) takes a lot of time and effort. We won’t go into great length here, but understanding keywords and SEO will help visitors find your website more easily.

There are many ways to generate traffic through SEO, social media, email marketing and display advertising. Some platforms like Shopify offer SEO tools (i.e., keyword research) built right into their platform which can help you generate traffic through organic search engine results pages (SERPs). 

Social media sites like Facebook, Twitter, Instagram, and Pinterest also provide excellent opportunities to market your product online. Remember – once you start getting good at one aspect of online marketing, don’t stop! Even if one promotion begins to trail off in results, try something else until you hit gold! Your potential gains far outweigh any immediate losses when it comes to building your business.

If all else fails though, there is always PPC advertising. Although cost per click will likely be pretty high due to competition, at least targeting should help lower costs… right

Conclusion

Dropshipping has become popular with online retailers because it doesn’t require them to stock any inventory, but many entrepreneurs are confused about how it actually works and how they can profit from it. That’s why I came up with his guide to show you how it works and how you can in fact start Dropshipping from Amazon right away. I sincerely hope you enjoyed every bit of this article? 

Have any further questions or contribution? You can a leave a comment below!