Amazon is a very profitable marketplace for dropshippers to find success and make high figures in product sales. In my Amazon guide, you will learn how to begin dropshipping and the benefits of Amazon:
How Does Amazon Work Exactly
Amazon is undeniably one of the biggest eCommerce platforms. It wasn’t always on top, but Amazon surpassed its competitor eBay because they the retailers and manufacturers sell high quality brands and products to keep buyers pleased. Not all brands and products get approval, this makes items listed on Amazon more exclusive or highly trusted.
Now, how effective and profitable is it to dropship products through Amazon? First most, Amazon has a dropshipping fulfillment program that allows dropshippers to ship products toAmazon where they store and inventory the product. Soon as the product is sold, they ship the item directly to the customer. This method is definitely effective for dropshippers because Amazon is known for fast shipping times, so in some cases the customer will receive the product faster than the expected delivery time.
Amazon’s Dropshipping Policy
For the most part it is okay for dropshipping which acts as a third party to fulfill orders. Amazon sellers that wish to fulfill orders using dropshippers, here are the guidelines:
- Be the seller of record for your products
- Sellers must identify themselves on all packing slips for each product and any other information provided or included in connection to the customers purchase.
- Sellers must be responsible for all transactions made on Amazon, you are the only point of contact.
- Follow all other Amazon seller agreement terms and relevant policies.
Not complying with Amazons dropshipping guidelines and using other preferred methods, can result in suspension or a banned seller account
The benefits of using Amazon for Dropshipping:
A Very Large and Broad Audience Range to Promote Products
Amazon has reported that there is about 310 million active users buying and selling through Amazon. With the right experience to sell and dropship products efficiently; you can develop a solid customer base. If you have an online store you can lure customers through Amazon giving you an opportunity to develop a better relationship with those already existing customers making them more loyal to your business’s brand.
Less Marketing Costs
Dropshipping through Amazon gives you a big break from spending a good amount of money purchasing ads to promote your product on other platforms like Google orFacebook. Amazon has the option to run ads, but the organic traffic is already competent enough to drive a good amount of free traffic to make sales. If you do decide on using Amazon ads, it’s very reasonable you decide how much you want to spend because running any ads has not minimum requirements.
Amazon Dropshipping Strategies: Choosing the right products to sell on Amazon
Amazon is very protective with approving products sold on their platform.They want to uphold a standard for what they consider good quality goods soAmazon has created numerous requirements and restrictions that sellers must comply with. (approval requirements) However, Amazon has a list of eligible products or stores that don’t need approval because they already have trust in the products. On their pre-approved list you will see categories like books, computers, video games, electronics and office items are all eligible to sell without approval. If you’re not sure if your products are eligible, Amazon also has a restricted products list that is for certain those products or category items will not be approved. Generally they have restricted items that can be harmful and dangerous like hover boards.
The Importance of Amazon’s Buy Box
82% of Amazons sales are converted through the Buy Box on each product’s listing page and for mobile purchases, the percentage is even higher. So for dropshippers, this is why winning a Buy Box will help maximize your potential sales. The Buy Boxes for Amazon sellers are not automatically provided; essentially it has to be earned.
The requirements are straightforward; here are ways to become eligible for a Buy Box:
1. Professional seller account
Only sellers who have purchased a Professional Seller account (in Europe called a Pro-Merchant account) are eligible. An individual seller (in Europe: Basic account) is not.
2. New items
Your item must be new. Used items aren’t eligible for the regular Buy Box, though they can be sold on a separate Buy Used Box.
There needs to be inventory of your listed item. Without stock, the Buy Box will simply rotate to another seller.
4. Using Fulfillment By Amazon (FBA)
Sellers can never beat FBA sellers; it’s just harder, requiring extremely high scores across all variables and a very low price.
5. Seller-Fulfilled Prime
Seller-Fulfilled Prime offers top-performing Fulfillment By Merchant (FBM) sellers the opportunity to fulfill their orders while enjoying the benefits of Amazon Prime.
6. Landed Price
The landed price refers to the total price an Amazon product goes for, including shipping.
7. Shipping Time
The simplest metric looked at by the Buy Box is the time in which the seller promises to ship the item to the customer.
Amazon’s Tools for Dropshipping
Listed below are several helpful tools and services that can assist your dropshipping business throughAmazon:
Merchant Words – A handy tool that lets you view the search volumes and keyword analytics.
FeedCheck – For sellers with a large amount of products listed on Amazon, FeedCheck lets you preview all of your Products reviews all together making it easier to monitor feedback and improve your customer service. The service costs $19/month, but for beginner dropshippers this tools might not be recommended.
Seller Engine – This is a re-pricing strategy tool and also it helps you become eligible for the buy box.
Feedback Express – This is a tool to help you gain more reviews for your Amazon store. It can also get rid of the negative reviews, giving you a higher Amazon seller rating. This will definitely help you win a Buy Box and improve your sales. This is a $20/month service so again this tools would be recommended for those more serious about choosing Amazon for their dropshipping business.
Amazon Volume Listing Tools – Amazon offers a variety of organizational tools to help simplify your selling experience. They provide downloadable information and spreadsheets that can be useful to document your order transactions.
What is the key to success for Amazon Dropshippers?
To make it as a dropshipper on Amazon, you must be willing to learn how to develop new skills and maintain them for your own success. Here is an overview of what the job entails:
1. Integration between suppliers and yourAmazon store
Having an advanced plugin platform like WooCommerce or Oberlo that automatically lists and adjusts the products you wish to sell. Going through a dropshipper directly, you will have to manually keep track of the products inventory. Supplier integration is much simpler to manage; it allows you to have automatic purchases order generators and also auto shipping confirmation.
2. Catalog Management
Product listing information varies throughout each marketplace platform. Some demand or recommend very detailed and lengthy information provided for the product and they’re some other marketplaces that suggest a more simplistic description. The Idea of catalog management is to retain all the product data available, then create a standardized listing description and use that to publish on whichever marketplace you decide to list the product on.
3. Inventory management
Depending on if you’re doing business with a dropshipper directly or have an integrated supplier, inventory management will be a routine you should be keeping up to date with. Amazon or even eBay can suspend your account if they see you’re overselling items too much. This is primarily should concern those who are manually doing business with a supplier. You should have a spreadsheet with a timeline for each product to input the inventory count yourself periodically. For those using integrated suppliers, they made dropshipping easier for you to manage by automatically refreshing their inventory to stay accurate in their product availability.
4. Price Adjustments
If you’re working with individual suppliers directly, they should provide you with all the product data and descriptions like they’re suggested price point that they already done the research and found what price the product sells best at. You can always re-adjust and set your own pricing to allow you better profit margins.
5. Order processing
Again, if you are not using integrated suppliers already which they automatically process the orders for you, you will then have to keep track of all your order transactions yourself manually. Every time an order is made you will have to email or fax the order information to your supplier on your own time. I know it seems like a hassle doing things the “old way” now, when you have new dropshipping services that takes this responsibility off you shoulder. However, it all comes down to preference in where online retailers could search for the supplier source for the products they like and want to sell.
6. Tracking confirmation
Marketplaces like Amazon do their best to make sure sellers ship their goods ASAP. Also, they are very responsive to update the status of the order once it has been shipped and provides the tracking information to the buyer immediately. With dropshipping, you have to make sure your supplier receives the order information as quick as possible. Completing everything on both you and the dropshippers end, after the package is shipped and the buyer is notified with the shipping information which includes the tracking number.