With the recent addition of the Amazon sales channel on Shopify, Oberlo users can now dropship on Amazon with ease. In this Amazon dropshipping guide, you’ll learn what dropshipping is, the benefits of dropshipping on Amazon, Amazon success strategies, Amazon tools and how to sell on Amazon.
What is dropshipping?
Dropshipping is the process of selling a product without the responsibility of carrying inventory or shipping the goods. Notably, dropshippers can set their own product prices. The product manufacturer is responsible for manufacturing the product, maintaining inventory and shipping the goods to the customer.
Benefits of dropshipping
In this section of the Amazon dropshipping guide you’ll learn some of the benefits of dropshipping.
Hold no inventory
The biggest benefit of dropshipping is that the dropshipper doesn’t need to carry any inventory. This is great because it makes the business model less risky for the dropshipper. As there’s no inventory to carry, there is less work involved in the business. In addition, there’s also fewer costs as you don’t need to pay for a warehouse to hold the inventory.
Few skills needed
Few skills are needed to have a successful dropshipping business. A dropshipper needs to be great at marketing, administrative tasks and providing excellent customer service. If a dropshipper can master those three skills they can achieve great success. With great marketing skills they can attract more customers. Since they don’t carry inventory, they can intensify their marketing efforts as they don’t need to worry about inventory or the cost of labour associated with shipping products. Within the realm of administrative tasks the dropshipper will need to process orders, pay for taxes and expenses and more. Lastly, by providing excellent customer service they can maintain positive relationships with the customers who’ve purchased from them.
Easy to start up
Starting a dropshipping business is relatively easy. You can quickly set up a store within a day. You can choose AliExpress products with ease using Shopify’s Oberlo app. You can even get your first sale on the day you launch if you start advertising right away. Compared to buying inventory for your store, you don’t need to wait to receive inventory or take product photos. With dropshipping, you can easily import product details such as specifications and images. This saves your business time and money.
Test products easily
Another great benefit of dropshipping is that you can test products easily. Since you don’t carry inventory, you can run ads on products to see which products convert best. If certain items aren’t high performers you can remove them from your store easily. Since you didn’t purchase inventory, there’s no cost, aside from advertising, for a low performing product. In the event that you want to eventually purchase inventory, you’ll also know which products sell well as well as how many SKUs you can sell easily.
Low start-up cost
The dropshipping business model is low cost. First, you only purchase products when a customer places an order. Second, there’s no warehouse needed for inventory. Third, you don’t need to hire extra employees to manage the shipping of products. Next, your main expenses include cost of goods, advertising, and website.
Benefits of Amazon Dropshipping
In this section of the Amazon dropshipping guide, you’ll learn some of the benefits of Amazon dropshipping.
No warehouse cost
One of the benefits of Amazon dropshipping is that you don’t need to pay for the cost of a warehouse. Some Amazon sellers choose to make their products FBA (Fulfilled by Amazon). With FBA, sellers ship their products to Amazon and Amazon sends the products out for them. However, if you’re dropshipping AliExpress products to Amazon, it’s excessive to have two dropshippers doing the same thing. Logically, it makes sense to have AliExpress ship out products directly to customers. This saves you additionally fees by not having Amazon carry and ship products.
Large audience to sell to
Amazon has 244 million active users. Thus, having Amazon as a sales channel for your dropshipping business can mean huge returns. Sell the right product at the right price and you can lure in new customers. Your online store may attract different customers than Amazon. Thus, giving you an opportunity to connect with new customers who don’t fit your target demographics.
Lower ad spend
You have the option to run Amazon ads to gain sales and build a positive reputation on Amazon. However, as a marketplace, you can also benefit from organic traffic. By putting in upfront effort into optimizing your page, you can increase your odds of receiving organic traffic. Also, the cost of Amazon ads is set by you. You can control how much or how little you want to spend on Amazon ads as there’s no minimum requirements.
Strategies for Succeeding on Amazon
In this section of the Amazon dropshipping guide, you’ll learn a few strategies for succeeding on Amazon.
Win the Buy Box
Most of Amazon’s sales comes from the buy box. Thus, your goal as a dropshipper is to win the buy box so you too can maximize your sales. First, you’ll need to have a high seller rating. Many have found having a rating above 95% has worked well for them. Second, you need to ship products quickly, ideally within 14 days. Third, your cost (shipping and product cost total) should be lower than most of the other offers being presented. Having a low refund rate, fast customer response time and high feedback score also help you win the buy box.
Don’t rely on Amazon
Don’t be dependent on sales from Amazon alone. Have your own store too. By having Amazon as one of many sales channels, you improve your odds for sales while minimizing risk. Also, if a customer recognizes your brand they’ll be more likely to buy from you on Amazon. Be where your customers are.
Aim for a 95% seller rating
Having a 95% or higher seller rating has improved the likelihood that you’ll win the buy box. It’s also great because it makes you more likely to appear in organic searches. Also, it’s important to have a high seller rating as customers will be more likely to trust you if your rating is high. It gives your Amazon store a competitive advantage over those with lower ratings.
Do keyword research
Just as you’d optimize your store’s product pages for search engines, you should optimize your Amazon product pages as well. You can use tools like Merchant Words to determine popular keywords. If you run Amazon ads you’ll also have access to a supply of keywords you can optimize your product pages. Doing this well will help you rank organically. If you’re running ads, it’ll help you target customers better.
Make sure you price your products accordingly
When pricing products for Amazon there are a few factors to consider. First, is the cost of Amazon fees. You want to ensure your margins are high enough that you can afford to pay Amazon’s monthly and other associated fees. Second, you want to ensure your margins are high enough to make a profit. However, you also need to consider pricing competitively to ensure that you win the buy box and generate sales. As an AliExpress dropshipper, you can often offer free or cheap shipping which allows you to stay competitive as well.
Offer a better coupon discount than competitors
By creating an Amazon coupon, you can help encourage customers to buy from you. If you promote the coupon to coupon sites you can help drive more traffic from those looking to score sweet deals. Remember that you need to price the coupon in a way that allows you to pay your expenses and remain profitable.
Tools for Amazon Dropshipping
Merchant Words – You can use Merchant Words to view the search volume, keywords and keyword data.The pro plan costs $30/month.
FeedCheck – FeedCheck allows you to view all your product reviews in one place. If you have a large selection of Amazon products on your store, this is a great tool. By having easy access to reviews, you can work on improving your reviews while providing better customer service. It also allows you to monitor competitor’s products. Their pricing starts at $19/month.
Shopify – You can use Shopify to add Amazon as a sales channel on your store. Also, Shopify can be used to track your inventory. It’ll also alert you if you have Amazon sales you need to fulfill.
Oberlo – You can use Oberlo to source products to sell on Amazon. Oberlo allows you to easily import and process orders to your Shopify store. You can also dropship AliExpress products on Amazon. Best part: the Starter Plan is free.
Sellery – This tool helps you win the Amazon buy box with its repricing strategies. It allows you to run pricing experiments to stay competitive while maximizing profits. You can try this tool for free.
Feedback Express – Feedback Express helps you get more reviews on your Amazon store. It also helps remove negative reviews so that you can maintain a high rating on your products and store. You can even blacklist customers who are notorious for leaving negative reviews. Pricing starts at $20/month.
Amazon Volume Listing Tools – Amazon offers various tools to simplify your seller experience. You can easily download spreadsheets regarding order and inventory information. You can also modify pricing and product quantity with ease.
How to Sell on Amazon
Choosing an ecommerce platform
As Shopify recently partnered with Amazon, using their ecommerce platform would be ideal. Shopify allows users to add Amazon as a sales channel to simplify managing orders on both platforms.
Which products should you sell?
AliExpress offers a selection of millions of high quality products with low costs. This allows you to sell on platforms like Amazon as you can still generate a profit while staying competitive. You can use the Oberlo app as your AliExpress product sourcing tool as it can be found on the Shopify App store. As Shopify integrates well Oberlo, this makes it an ideal choice for product selection on your Amazon store. Oberlo’s Starter Plan is forever free making it a great and cost effective choice for entrepreneurs like you. Amazon also expects quick delivery times. Fortunately, Oberlo allows you to easily find ePacket items that can be delivered quickly to customers.
Do you sell the right products?
There are several requirements and restrictions that store owners must follow if they want to sell their product on Amazon. According to Amazon’s list of eligible stores, niches like books, computer and video games, electronics, office products and more can open up an Amazon store without approval. Notably, Amazon also created a list of restricted products which includes hoverboards, dangerous good and more which cannot be uploaded and will not be approved.
Create an Amazon seller account
If you plan on selling a high volume of products, it’s best to have a professional account. In the individual selling plan, you’re charged 0.99 cents per item sold which can eat away at your margins. Keep in mind that you’ll also need to offer competitive pricing, the occasional discount, while ensuring you make a large enough profit to reinvest in the business. Thus, it’s important to have decent margins. With a professional seller account you pay a subscription each month as well as a few additional fees.
You’ll want to register with your email on Amazon Seller Central. You’ll need to fill out your name, email, and password. You’ll continue being directed to new screens where you’ll provide more details about your business such as address and tax information.
Get approved in your product category
As mentioned earlier, certain niches and product types require Amazon approval. Fashion, Beauty, and Jewelry are some of the popular niches that require approval before starting up your Amazon store. You can view the specific approval requirements for each category.
Set up your Amazon account on Shopify
Once you’ve been approved and your account is created, connect your Amazon account to your Shopify store. On the left panel in your Shopify account, scroll down to Sales Channels and click on the + button beside it.
You’ll have a pop-up come up. Amazon should be the first item on the list. Click Add Channel.
Then, Add Channel. You’ll need to then continue with ‘Connect to Amazon.’
Create Amazon product listings with ease
Click on the Amazon sales channel link, see Shopify’s left panel. Click create listing. Next, click Select Product. You’ll be presented with two options. If your product is made by your brand, you’ll need to make sure you purchase UPC codes. However, as a dropshipper, you’ll click on the second option ‘This product is made by another brand.’ You’ll be able to search for the product to become a seller for that SKU. Once you’ve found the product click Select. Finally, you’ll need to Publish for the process to be completed.
Have Shopify track inventory
Make sure that Shopify tracks inventory levels. This ensures that when a customer orders on Amazon that the product is still in stock. Notably, don’t allow customers to order products that are out of stock as this can lead to negative reviews.
Start promoting your Amazon store
Next you’ll have to send traffic to your Amazon store in order to encourage sales. You can create Amazon ads to help boost sales.
In this Amazon dropshipping guide, you’ve learned everything from the benefits of Amazon dropshipping to how to sell on Amazon.
Best of luck generating more sales with your new Amazon sales channel. Have you tested it out? Let us know how it goes in the comments below!