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Amazon Dropshipping Guide - How to Launch a Business in 2022

Amazon Dropshipping Guide – How to Launch a Business in 2022

When you want to start an online business, choose a reliable dropship platform is a question. Some famous online shopping websites, like Amazon or eBay, maybe the first choice comes to your mind.

There are some common question about Amazon dropshipping, for example, is Amazon a dropshipping company? can I dropship on Amazon? Does Amazon allow drop shipping?

All answers are YES. You can find Amazon’s drop shipping operation flow and Amazon dropshipping policy on its official website. Easily do dropship on Amazon by creating your account on seller central and choosing what you want to sell.

 

Now let’s get to know more about the Amazon drop shipping business and Amazon dropship policy.

 

What is Amazon dropshipping?

 

The first thing to know about is “what is Amazon dropshipping”. Amazon is one of world biggest e-business website. It offers a platform for retailers and manufacturers to sell their products. Amazon dropshipping program allows dropshippers selling a product without taking responsibility for carrying inventory. You can dropship on amazon by shipping items to Amazon and its fulfillment service ship directly to your customers and make sure they get their products in the right time.

Amazon Dropshipping Guide - How to Launch a Business in 2022

This is great because it saves money and time for dropshippers. No inventory to carry means less work involved in the business. Moreover, fewer shipment steps involved reduces the risk of damaged items while moving from one place to another. In addition, you can sell diverse products at no additional cost and change the product range at any time according to market demand. In the simplest terms, Amazon dropship program provides an easy online business model for dropshippers.

Is Amazon Dropshipping Profitable?

It can be. The average dropshipper sells products at a 10% to 30% margin. If they dropship via Amazon, the platform will take around 15% off their top-line revenue.

If you’re selling at a 30% margin, your net margin after selling a product on Amazon will be 15%. This is quite decent, especially when you consider the wide audience base you’ll be able to tap into.

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Note: Your Amazon dropshipping margins can be higher if you win the Amazon Buy Box, but it’s highly competitive and shouldn’t be something you focus on at the start.

 

Amazon drop shipping policy

 

If you want to dropship on amazon, you need to understand amazon dropship policy.

Here is the amazon dropship policy:

Amazon Dropshipping Guide - How to Launch a Business in 2022

As we can know from the above amazon drop shipping policy, it clearly states that buying goods from an online retailer and having that retailer is not allowed for shipping directly to customers. In other words, it is unlike the traditional drop shipping, you purchase products from the retailers and ship out the orders by a third party on your behalf. Its policy may confuse people about is drop shipping allowed on amazon. In fact, retailers still be allowed to use a dropshipper by following amazon drop shipping policy.

Although amazon does not support traditional dropshipping, it has world-class fulfillment for anyone who doesn’t want to deal with fulfilling orders. You can find the detailed information on Amazon services. Fulfillment by Amazon (FBA) allows you ship goods to Amazon and then it takes care of everything. You don’t need to worry about shipping and packing. Of course, you need to pay for FBA service. You need to note that if you do not comply with those policies, your selling account will be suspended.

Shipping goods to Amazon fulfillment or directly to your customers by yourself is a necessary step for your drop shipping business on Amazon. It that possible drop shipper business can be easier and faster without taking care of shipping at all. Chinabrands can save the shipping step as well as time and money for you. If you place an order on Chinabrands, it will pack and ship goods directly to the address you provide. You can forget the Amazon drop shipping policy and its high cost by choosing Chinabrands.

 

After reading its dropship policy, the next step is to analyze the advantages and disadvantages of Amazon dropshipping.

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Pros of drop shipping on Amazon

 

1. Famous online shopping websites

Amazon is a widely known website and its markets are global in scope, which brings a plenty of sources and customers. Do dropship on Amazon needn’t spend your time explaining to people how the marketplace works. Also, you don’t need to worry much about advertising, marketing, SEO, relationship building, etc.

 

2. No warehouse cost

Amazon offers its own fulfillment warehouses, also called FBA (Fulfilled by Amazon), which allow you to sell goods without having to deal with packing, shipping or warehousing. With FBA, sellers ship their items to Amazon and Amazon sends those products out to them.

 

3. Easy to set up

Use Amazon’s process and list products you want to sell on their site. You can avoid the process of ordering, housing and shipping out your product inventory.

 

4. Diversity products

Amazon provides different categories of goods, so you can sell diverse products at no additional cost and change the product range at any time.

 

5. Large numbers of customers

There are 244 million active users on Amazon, which means you have a chance to do the dropship business with a large number of potential customers. Sell a good product at the right price so that you can lure in new customers.

 

6. Lower advertising expense

You can run amazon ads to gain sales and build a positive reputation for your online store. By making a great effort on optimizing your store page, you can increase the chance of receiving organic traffic. You can control how much money you want to spend on Amazon ads as there are no minimum requirements.

Amazon Dropshipping Guide - How to Launch a Business in 2022

 

Cons of drop shipping on Amazon

 

1. Listing fees

You have to pay fairly substantial commission fees for access to the largest network of online buyers. The commission fees are different due to the product type, but usually cost in the 10% to 15% range.

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2. Exposure of Sales Data

The risk of using Amazon’s platform is that it can see your sales data from the items that sell best to how much you’re selling overall. Amazon has been accused of using the sale data to find out great selling opportunities and enlarge its own involvement in the niche.

 

3. No access to customer data

Amazon does not provide detailed customer data for dropshippers. For a novice of online business, having customer data is a crucial factor to scale your business. If you have customer data, you can build a meaningful relationship with your audience and sell new products to them.

 

4. No Customization

You are going to be really limited in terms of customization. Everything you do in terms of branding, UI, and marketing are all under Amazon’s control.

If you want to start a wholesale business, click on Yoga Supplies, which is a promising area and you will learn more.

 

Final Conclusion

 

By knowing those advantages and disadvantages of amazon dropshipping, you can briefly understand how Amazon dropship program works and whether is suitable for your foreign trade business.

However, Amazon is not your only choice. Chinabrands as a professional dropshipping platform can meet your demand of developing a good online business.

Compared with the over 10% commission fees of Amazon, Chinabrands offers different types of goods with reasonable price. Instead of Amazon FBA or ship by a third party on your behalf, Chinabrands can directly ship products to your customers.

It also has the API system that allows orders from other websites can synchronize with Chinabrands. Besides, it clearly shows the cost and profit data of each product, which is convenient and easy for your cost accounting. Moreover, its system supports for uploading the data on Amazon, eBay, AliExpress or Wish.

 

In general, Amazon as the biggest online shopping website has well-developed online system and makes great influence on different countries, which is definitely helpful for your drop shipping business.

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