The Best Drop-Shipping Guides for Amazon | E-commerce | Article – HSBC VisionGo

Take a closer look at what dropshipping is, and how to do the dropshipping on Amazon | Should you do dropshipping for your businesses

Marketing  ·    ·  4 mins read

Fulfilment By Starlity

Drop-Shipping Guides in Amazon FBA, For Complete Beginner

1. What's Dropshipping?

By definition, dropshipping is an order fulfillment method that when the customer made their order for the products, the products will ship to the customers directly from the suppliers or the manufacturers, and the sellers do not need to find a place to keep a stock of the products. In other words, the sellers do not need to manage the inventory of the products. Dropshipping does offer some benefits to the sellers, like low-cost and easy to set-up, but the drawbacks of the dropshipping should also be aware, dropshipping could longer the delivery time of the products.

2. How Dropshipping Work in Amazon?

Understand Dropshipping in Amazon, Step-By-Step

Step #1 of dropshipping: First, the customers make the order and purchase the listed products on Amazon.

Step #2 of dropshipping: Second, when the orders and transactions are finalized and the seller has received the money, the seller makes the order directly to the product's suppliers and provides the supplier with the customers' information and address.

Step #3 of dropshipping: Lastly, when the customers' information is in hand of the suppliers, they ship and send the product directly to the customer, and the sellers would not involve in the last step. This is how dropshipping works in a nutshell. Sounds easy right? Let's take about the advantages and disadvantages of dropshipping, especially for the sellers in Amazon.

3. Advantages and Disadvantages of Doing Dropshipping in Amazon

Advantages:

Low Starting-Cost of Dropshipping ✅

Doing dropshipping means the sellers don't have to find a place to put a stock of the products, therefore they could cut-down the money on rent and the warehouse cost. Also, they do not need to hire extra employees to manage their inventory. It all together to reduce your costs of selling on Amazon.

Amazon Has Large Audience to Sell To ✅

Amazon is the world's largest online marketplace to sell and buy stuff. There are more than 197 million people are using the service provided by Amazon and browsing its website each month, which is even more than the entire population in Russia. The demand for your product is probably going to be huge, and doing dropshipping might save your time of looking for a place to store your massive amount of product.

Automate Selling Process By Using Dropshipping ✅

Doing dropshipping on Amazon could turn the selling business to a completely automated process because you don't have to manage the inventory and after the customers buying your products, there is no need to ship the products to the customer by yourself. After you listed out the product, you could set-back and let the supplier ship the product for you.

However, dropshipping could cause some problems, so think through whether you really want to adopted this method in your selling business on Amazon.

Disadvantages

Dropshipping could be Time Consuming  ❌

Dropshipping is a time-consuming process and it could lengthen the time of shipping the product to the customer. The products that are dropshipped to the customers are shipped from the manufacturers or the suppliers, and most of the time, the manufacturers or suppliers are located in oversea. Therefore, dropship the products from the other side of the world could probably take weeks or even months.

Dropshipping Increases the Risk of Deliver Defective Products ❌

Dropship the product directly from the manufacturers or the suppliers to the customers will increase the risk of delivering "bad" or "broken" products to the customer, especially when your product is fragile. On the opposite, if you have your own inventory to manage the products, you can to the quality check once you received the products or before sending it to the customers.

Dropshipping Increases after Sales Issues ❌

Customers complain and product returns are usually common in dropshipping. Lack of quality control increases the risk of delivering defective products, and when the customers received the bad quality product, they could either use the Amazon service to return the product and take back the money they have paid or leave a bad comment on your product page in Amazon.

4. Step-by-Step Guides About How To Do Drop-Shipping in Amazon

Now you have learned a bit more about the dropshipping on Amazon, and here we're gonna teach you how to become a dropshipper in Amazon.

Guide #1 of dropshipping: Sign-up Amazon Sellers Account

First, you are going to set up your own Amazon Sellers Account. You can get one by going to the https://sellercentral.amazon.com Then you can choose to be a professional seller or individual seller.

Guide #2 of dropshipping: Find the right products to sell on Amazon

The next step is you are going to find your own product to sell and dropship on Amazon, and the tip of finding the right product is trying to find the product that has high demand but with low competition. In order to do that, you could use a tool called Jungle Scout to see the sales status of each product, and in the Jungle Scout result, you can see the monthly search volume and avg. sales. Finding the right product to sell could be the cornerstone of successful online business on Amazon.

Guide #3 of dropshipping: Find the supplier of your targeted product

Everyone knows "Selling high, buying low", but where you can find the "low" products? You can go to the AliExpress.com to find the supplier of the products. AliExpress is the world's largest platform to connect you with the dropshipping business. There are plenty of sellers available on AliExpress.com, you just have to search for your interested products and check out the price that they are offering.

Guide #4 of dropshipping: Create your Amazon Listing

The last step is you choose the product category, and after you've done that, you will have to fill out all the information of your listing products. When you are setting the price of the dropshipping products, you don't forget to calculate your Amazon’s fees. Finally, once you have finished the pricing of the products you can start your sales on Amazon right after!

5. Last Suggestion for Dropshipping on Amazon

To make your online business succeed in the long term on Amazon, doing dropshiping might not be the a sustainable way for you to choose. Here're the points that you could consider and take fewer risk with doing dropshipping on Amazon.

Use Drop-shipping For Branch Out New idea, Not As Your Base

If you have been selling traditionally, it means you have your place as a warehouse to put your products and you come up with a new idea to try to expand your business and you want to test out the feedback from the customers. In this situation, dropshipping would be perfect for you, because you would minimize the risk of having a stock of unsellable products in the warehouse. No matter in any form of business, try not to fully depend on the dropshipping supplier. If so, you might a bit risking your business.

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