Dropshipping Guide for Amazon Sellers
Before we delve into the dropshipping guidelines that sellers on Amazon can use, we first need to define what drop shipping is.
So, what exactly is a dropshipping business model and how does it work?
Amazon Dropshipping works like this:
- You as a seller list your items on your Amazon seller page without necessarily holding any physical inventory, then
- When an order comes in, you simply notify your drop shipping supplier and they’ll be the ones to fulfill your orders for you.
It’s that simple. This is the basic idea of dropshipping. However, Amazon has written a policy that contradicts some aspects of this business model. Dropshipping, or allowing a third party to fulfill your customer’s orders, is generally accepted on Amazon. You just need to comply with Amazon’s policy to avoid any consequences.
Amazon’s Dropshipping Policy
Amazon requires its sellers who wish to fulfill orders using a drop shipper to:
- Be the seller of record of their products;
- Identify themselves as the seller of their products on all packing slips and other information included or provided in connection with them;
- Be responsible for accepting and processing customer returns of their products; and
- Comply with all other terms of their seller agreement and applicable Amazon policies.
And here are the ones that are forbidden by Amazon:
- Purchase products from another online retailer and having that retailer ship directly to customers; or
- Ship orders with packing slips, invoices, or other information indicating a seller name or contact information other than their own.
Amazon may ban merchants from selling on Amazon if they fail to comply with these requirements.
How to Dropship Items on Amazon
Amazon Sellers are using the dropshipping method because they find it easy and convenient. If you’re looking to use drop shipping, here are some tips that can help you guide your way as you go:
Find your supplier.
This is the first and most important step of all. You need to look for suppliers that you are comfortable dealing with. This will become the third party for your business, supplying you with goods you are going to market on Amazon.
Secure a third-party fulfillment center.
Amazon explicitly states in its policy that they won’t allow sellers to ask their suppliers to ship the items on their behalf. A workaround on this is to find a fulfillment center that will ship your items for you once they arrive from your supplier.
Choose the products you are going to sell.
Dropshipping method offers you a wide variety of products to choose from. With this, you can go and choose a product that is not yet introduced by your competitors but is sure to get a lot of customers.
Ready your Amazon seller account.
If you still don’t have an account, register already. This will give you the right to sell and create listings in Amazon.
Create your product listings.
When creating product listings, make sure to fill out every detail. Provide complete and clear information. This can highly impact the number of your customers. Setting your product’s price is also part of the listing. But remember that you’re competing with other sellers so it might be wise to lower your price. You just need to justify setting a high price with your product’s quality.
Handle transactions with your customers.
Customers will still make their orders from you which is why you are still responsible for handling any of their concerns.
Manage and maintain the use of drop shipping in your business.
If the business goes well, continue the use of dropshipping. Just make sure that the method you are using still follows Amazon policy to prevent any complications with your online business. Also, try to weigh down the risks and benefits you are getting from this method. This way, you can easily fix any flaws you see and work with different strategies.
Dropshipping is a great method to use, especially for beginning Amazon sellers as it doesn’t need a huge capital. You also don’t have to worry about getting your customer’s product shipped to them. This will be the job of the drop shippers. All you have to do is sit back, relax, and manage your own business without the burden of managing any physical inventories.