Amazon Dropshipping: A Reference Guide for Success

by Sell The Trend - June 10th, 2019

Woman working on her dropshipping store

So you're thinking about getting into Amazon dropshipping. Well, online businesses have become quite popular today majorly because of the ease of accessing internet facilities today. I mean, we are now talking of 5G internet speed. Among the various ways of making a few bucks online, dropshipping is one of the most popular. Whether it is because of its profitability, the ease of operation, or both, one cannot really say.

Many people go into dropshipping without a sort of recipe for success, so they often come out the other end with nothing to show. Well, this doesn't have to be the case. We have put together a series of strategies, tools, and ideas that will help you find a successful dropshipping business.

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What is Dropshipping?

the dropshipping model

Dropshipping is a trend in e-commerce where a retailer sells goods to customers without having to keep them in stock. A dropshipping retailer simply transfers order and shipment details to the wholesaler who delivers the products directly to the customer. This disrupts the conventional chain of distribution where a retailer buys products from a wholesaler, then stores them until they are purchased or ordered for by the consumers. The retailers earn from the differences in the wholesale and retail price or an agreed percentage of the sales. Today, there are several websites and online platforms that practice dropshipping, and examples include Amazon, Aliexpress, SaleHoo, etc.

How Does Amazon Dropshipping Work?

how does amazon dropshipping work

Dropshipping has made e-commerce more lucrative and profitable as it has automatically eliminated the cost and stage of storing products on the part of retailers. there are several websites today that sell products by dropshipping and one of these is Amazon. Amazon deals in a variety of products, ranging from books, clothing, consumer electronics, beauty products, jewelry, fashion accessories, and some others. This implies that dropshipping retailers dealing in any range of goods will find a market through Amazon. Let's have at this Amazon dropshipping guide.

Identify your niche

identify your niche

The first step is identifying the type of products you want to sell. Ensure that you deal with products that would be easy and profitable for you. This would allow you to focus on advertisement and marketing.

Create your account

create amazon seller account

To begin dropshipping on Amazon, you are required to create a seller profile. This comes in two plans; The Professional selling plan which comes at a fee, and The Individual selling plan which is free. Both plans vary in the sales limit.

Upload your products

uploading photos

After putting your necessary information and details, you will upload details about the goods you sell. After doing this, you stay at alert for orders from consumers.

Shipping and payment

paying with credit card

When an order is placed for your goods, you will be notified by Amazon. You are then required to contact your supplier with the order and address details. After the supplier delivers the goods on your behalf, you will get paid for the transaction after Amazon charges you of a particular commission that varies according to your plan.

Benefits of Amazon Dropshipping

Amazon is one of the several platforms that allow dropshipping but what makes it a good choice? Let’s look into the benefits of Amazon dropshipping.

Large market

The main purpose of marketing is to reach out to potential consumers who your goods will appeal to. There are about 300 million customers who shop on Amazon, and this implies that there is a large market and wide coverage for your products, which guarantees big sales. The fact that Amazon is a worldwide trusted brand also increases the chance of taking your products to a wider reach beyond your local market. This is a great advantage for retailers and a good reason to choose Amazon dropshipping.

Save cost

save money

As a retailer on Amazon, you certainly do not need to get storage space for your products which would have introduced an additional cost. This is because on receiving an order, you notify your supplier who transfers the products directly to the consumer, and so you don't have to hold the products and pay extra cost for storage. There are certain sellers on the FBA (Fulfilled By Amazon) network. Amazon offers these sellers the luxury of receiving shipments of goods from them and helping to ship to customers. These allow you to go all out on dropshipping to offer a large number of products as you don't have to be concerned about storage space or cost.

Easy to use

Selling your products on Amazon is very simple as the e-commerce website as a simple and easily navigated interface that helps and guides you while registering as a first-time retailer. It also helps out users who need little help looking for categories they wish to shop in. this sustains interest in sellers who put up their goods for dropshipping and customers who are looking to make orders without complications.

Sales promotion

sales promotion

Apart from the portion of the hundreds of millions of users who see your products on sale, on Amazon dropshipping also enjoy the option of promoting your sales. Amazon allows you to run ads at affordable prices. This gives your products a wider reach on Amazon and increases marketing and sales.

Cons of Amazon Dropshipping

Amazon dropshipping, besides its benefits, also has its hitches which will be discussed

Strict rules

know the rules

Amazon is a reputable and trusted brand, and this gives them the obligation of being committed to delivering exceptional customer experience. Due to this, Amazon dropshipping retailers are expected to meet certain performance targets and abide by strict rules, failure of which could attract actions like account suspension.

Competition

Amazon offers a conducive and healthy environment for sales and as a dropshipping retailer, you would do well to remember that you are only one out of millions of sellers on Amazon. This only means that it is a concentrated market and so there is congested competition for retailers.

Fees

amazon fees

Although Amazon dropshipping helps you get your good out there to customers, it all comes at a cost. As a retailer on Amazon, you are required to forgo a portion of your sales as commission and this eats into your potential profit. Also, some customers are looking out for items with free shipping and some Amazon dropshipping retailers would want to dance to this tune to appeal them. This also eliminates another potential source of profit.

All these are reasons why a dropshipping retailer would want to hold back and consider their options before going into Amazon dropshipping.

Strategies to Amazon Dropshipping Success

Despite all the challenges that come with selling on Amazon, millions of retailers still make a huge profit from it. This Amazon dropshipping guide will walk you through strategies for success.

Get high ratings

get high rankings

When a customer comes to shop on Amazon, he searches for an item, the search results show the item but from various suppliers. Of the numerous options, the customer is presented, they only want to select one, which is most suitable for them. The said customer has no personal relationship with any of the suppliers and so has no level of trust towards any of them. the only thing that can buy over a customer's trust on Amazon is the supplier’s ratings.

It is very important to have a high seller rating on Amazon as it attracts more customers and gives your products a competitive advantage over some other suppliers with low ratings. One way to encourage customers to leave great reviews for you is to offer high-quality products at friendly prices. You should also follow up on your customers with emails. Send out emails thanking them for purchases, providing information, and asking for reviews.

Win the Buy Box

win the buy box

About 82% of Amazon sales happen through the Buy Box, and so as an Amazon dropshipping retailer, you should aim for winning the Buy Box. In order to qualify for winning the buy box on Amazon, you have to have a good record and as a retailer. You should accumulate high ratings from your customers and also make sure you deliver products appropriately and try to avoid negative feedback from customers.

Also, ensure that your landed price, which comprises the price of your product and shipping cost is cheaper than your competitor’s. You should aim for low refund rates, quick response time to customers, and high feedback ratings as these factors increase your chances of winning the Buy Box.

Track your supplier’s inventory

There are several retailers involved in selling your products, and your supplier works with others as well. This means that the availability of products from your supplier does not depend on your orders alone but also that of other retailers.

As an Amazon dropshipping retailer, you should keep tabs on your supplier’s inventory so as to update your listings accordingly. Failure to do this would only lead to unavailability of stock at some point, and this translates to upset customers which you should avoid at all cost.

This is why you should automate the process of delisting your products when your supplier is out of stock and relisting them when they are available. This way, it would be automatically updated and would prevent consequences of misinformation on your part as a dropshipping retailer.

Amazon Search Engine Optimization

Seach engine optimization

On Amazon, customers search for products and get thousands of results. The customers will see the products that come up first and most likely interact with those results. The closer your product is to the top of the list, the higher the chance that customers see it and place orders. The listings that appear first are those that have their Amazon SEO improved. unlike the regular google SEO where you optimize content to rank high on google, on Amazon SEO, you optimize your content to ensure your listings rank high on Amazon’s search result.

The first thing to optimize is your product title. Your product title should be very detailed as it has the greatest influence on the performance of your product on the search. There are some elements your title should contain, and they include brand, product line, material or key feature, product type, color, size, packaging/quantity.

Another important element to consider is the use of keywords in your product descriptions. You should try to use keywords different from those used in your title. use related but not the same keywords to further describe your product. It is advised that you identify all the relevant and important keywords and place them strategically in your product listings.

Tools to Make Amazon Dropshipping Easier

The strategies explained are helpful to ensure success in Amazon drop shipping, but there are a few tools that can come in handy. Let’s take a look at some of them.

Merchant Words

MerchantWords is the world’s largest database of real Amazon shopper search data. It contains a wide range of database on searches from Amazon users. Through this platform, you can assess search volume and keyword data which would help you optimize your product listings.

Shopify

shopify logo

Improving sales on Amazon by adding Shopify sales channel helps make your product listing easier and more effective. On Shopify, you could integrate your inventory details, to allow Shopify to track the inventory. Shopify would also notify you when you have an order to fulfill on Amazon.

FeedCheck

feedcheck

Reviews are very crucial in Amazon dropshipping as it determines the level of trust potential customers will have for you as a retailer. FeedCheck is a great tool to track and monitor your ratings on Amazon. If you have a large number of products up for sale on Amazon, FeedCheck helps you aggregate the multiple reviews on your products and generate an overall assessment.

Sellery

Sellery is a real-time Amazon repricing software that helps you reprice your product listings when required. Repricing assists you in the race of winning the Buy Box, and Sellery offers automatic reprising which aims to match the Buy Box price.

Sell The Trend

What you are selling matters, even more than how you are selling. This is why it’s important to only sell products that are guaranteed to have an audience ready to buy them. With tools such as Sell the Trend’s Amazon Explorer, you can see a huge list of trending Amazon products. You will be able to check their engagement metrics including a product’s Amazon Rank chart that shows you the trend of a particular product and allows you to know if it’s still hot or not.

Sell The Trend Amazon Explorer

Conclusion

After going through this Amazon dropshipping guide, you should have been enlightened enough to handle dropshipping on Amazon. Like every other method or process of dropshipping, it has its pros and cons. It also has strategies and tools you can harness to maximize the pros and tone down the cons. As a dropshipping retailer on Amazon, you should be able to juggle all these factors to improve and get the best out of Amazon dropshipping.

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