In plain terms, dropshipping refers to a process that involves selling a product without carrying an inventory or shipping the goods. As a dropshipping trader, your job is to maintain an online shop where you record the customers’ orders and place those with your supplier. The supplier then connects the product manufacturers to send them the products from the warehouses.
You don’t need to have an inventory or warehouse, neither do you need to go through the troubles of a supplier. That’s why the dropshipping business has gained so much popularity and success over the years. Do you know you can do dropshipping on Amazon and eBay? Both Amazon and eBay are great candidates to do dropshipping? Today, we will be discussing why dropshipping on Amazon is the best place to start with.
Benefits Of Dropshipping on Amazon
Let’s discuss why dropshipping on Amazon is a good idea:
Doesn’t need an inventory
As discussed earlier, dropshipping business requires no inventory. So, this means you don’t have to spend wads of cash on maintaining an inventory. As there is no inventory, the workload and inventory maintenance lessen to a great proportion. You don’t need to pay for the warehouse, so the overhead costs shrink.
Testing a product’s value is easy
Since you don’t require an inventory, you can run ads on products and items to find the high-performing ones out of the line. Doing this gives you the upper hand in choosing and keeping high-performing products in your store. Since there’s no inventory, there’s no cost. Actually, there is, if you consider advertising, that is.
Negligible start-up cost
Setting up an inventory often takes the most work and money. Luckily, you are spared from the inventory dilemmas, so quite a significant amount of bucks are saved anyway. You only buy products when a customer places an order. Because there’s no inventory, you don’t need extra employees to tend the products. Hence, lesser expenses than starting up a traditional store.
Now, you can ask questions like:
- How to start dropshipping on Amazon step by step?
- How to dropship on Shopify using Amazon?
Opening a dropshipping account on Amazon using Shopify is a more complex process and needs a separate article to discuss. We won’t be discussing those in this article but if you are still interested in knowing the step-by-step process, click this link.
Top Tips For Dropshipping on Amazon
Finding a niche that works for your business
You need to figure out a niche for you if you have a dropshipping business in your mind. Dropship gives you the liberty of experiment with your products and understanding their value and performance, unlike traditional retail shops. In conventional stores, products are bought in bulk and stored in the inventory. The chance is a retailer won’t risk buying inventory unless they get to know the selling potential of the products is worth stocking up or not. With dropship, online retailers won’t buy inventory up-front by using the suppliers; they will only pay for the products they sell. To make your dropshipping business successful, you need a popular niche under which the products sell, like hotcakes.
Don’t jump the bandwagon of selling “famous” products
This second tip exists as the answer to why you need to focus on niche products only. If you follow other dropshipping businesses and websites, you will notice some of the products attract all the customers’ attention. As a businessperson, you will also want to stock up on that particular products because who doesn’t want to profit? But this is where most dropshipping businesses fail. When a high number of sellers sell the same merchandise, the competition tanks the prices naturally. The only companies that will profit out of this situation are the ones that receive bigger deals and discounts for buying these products in bulk. This isn’t a proper approach as you risk quite a lot of money in these. That’s why focusing on niche products is very crucial to stay relevant in the business.
Product price matters
This is yet another line of error when you are starting dropshipping business. You aren’t alone to think like this; many people do. You may think that lowering the price will increase your value as a seller, and your customers will notice you. Sorry to burst the bubble, but that won’t happen. Let me tell you where you are making the wrong move. When a product’s price is the only selling point, lowering it more means increasing the chance of some other business beating you to this. For shops like Walmart, this won’t matter, but for you, it will. I would also like to point out that a higher cost isn’t always bad; let it sink in your mind. So, instead of lowering the price, try offering more to justify a higher cost. And there are plenty of ways you can do so, for example, free shipping, deals, promotions, discounts, etc. These ways are proven to be less risky.
One thing is certain, dropshipping is very lucrative if you know how to do it and have skills. As to answer your question, how do I start Amazon dropshipping? When you read the suggested article, you will see it isn’t as tricky as you have feared initially. With that said, keeping these little tips in mind while starting your dropshipping business will help you immensely. Let us know what you think, we appreciate your response!