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Dropshipping on Amazon and eBay is one of the best ways to make money with an online business.
However, there are a few rules to pay attention to – especially if you want to dropship with Amazon and eBay.
In this article, we’re going to show you 5 great tips to make money dropshipping on Amazon and eBay.
Let’s take a look!
What Is Dropshipping on Amazon?
Dropshipping has become immensely popular in the last few years, mainly because it normally doesn’t require you to keep track of your inventory or pay for warehouse space.
Consequently, you’ll be reducing your overhead costs while maximizing your revenue.
In a nutshell, dropshipping is a fulfillment method in which you, as the retailer, don’t store or ship items.
Instead, you send orders from customers directly to manufacturers, who then ship the items directly to the customers.
Ultimately, you never even have to see the products you’re dropshipping. All you have to do is take the orders, send them over to the suppliers, and take your cut.
Benefits of Dropshipping on Amazon
When you’re running a dropshipping business, you want to maximize your profits and reduce your expenses. Fortunately, Amazon dropshipping works like a charm for that particular purpose, in addition to other benefits:
- Dropshipping reduces costs. You don’t have to design your products, nor do you have to store and ship them. All you have to think about is marketing and processing orders.
- Dropshipping doesn’t come with high risks. Since you’re normally not ordering items before someone has purchased them, you’re not running the risk of overstocking.
- Dropshipping is automated. You can completely automate your operations; from marketing to order processing and routing.
Is Dropshipping Profitable?
Let’s look at the numbers:
- 23% of online sales were fulfilled via dropshipping methods in 2017, which amounts to $85.1 billion (Source)
- 33% of online stores use dropshipping as their fulfillment method (Source)
And when you factor in the fact that you’re avoiding a lot of traditional overhead costs, it becomes pretty clear that yes, dropshipping is very profitable.
And with our tips up your sleeve, you’ll be on your way to running a very lucrative dropshipping business in no time!
Dropshipping Inventory Management
Just because your inventory isn’t in your hands doesn’t mean you don’t have it.
One of the main perks of dropshipping is that, with today’s technology, you can automate almost everything.
This means that you can integrate your inventory management software with your order management software, as well as your marketing tools, to make sure you’re running a tight ship.
The main goal is not to go out of stock.
Now, this is easy when you physically handle your products. However, when your products are in the hands of suppliers, you want to make sure you’re using the same systems.
Integrate your software with your manufacturers’ inventory management software so you always know how many products are available.
Inventory management is particularly important when you’re dropshipping on eBay.
All sales on eBay are effectively contracts, which can make out-of-stock order cancellations an absolute nightmare. In addition to that, some dropshippers used to buy products on Amazon and sell them through eBay.
However, eBay has clarified their policy even further to specify that you are only allowed to sell the products that you are in the physical possession of.
You should also make sure that your manufacturers can ship the products within the specified time, as you can receive a seller nonperformance violation otherwise. A few of them and eBay could pull the shutters down on your store.
Amazon behaves similarly.
Amazon Dropshipping & eBay Dropshipping: Satisfaction and Performance
Two things lie at the very core of dropshipping on Amazon and eBay:
- Customer satisfaction
- Amazon Seller account performance
- eBay Seller performance
Both of these platforms depend on customer satisfaction. When people shop on Amazon or eBay, they expect much better service and a degree of protection.
So if your shipments are being delayed, you won’t only get in trouble with payment processors such as PayPal, but you’ll also get in trouble with Amazon and eBay. Additionally, Amazon dropshipping values the authenticity of products you sell.
Your products have to be high quality in order for you to get good seller account ratings and continue dropshipping through the platform. If you haven’t inspected the products for quality (as is usually the case with dropshipping), you could be at risk of having your account suspended by the platform.
However, you can avoid suspensions with bundling.
Simply buy a few copies of the ASIN item you will be listing.
You’ll speed up the review process when Amazon dropshipping decides to check for authenticity.
Conversely, if Amazon has reasons to doubt that your products aren’t authentic, it will send you an invoice request. You’ll have to send them the product invoice to confirm that you’ve purchased and inspected the quality of the item.
Amazon will give you between one and two weeks to send them the invoice, and if you don’t have one, your account will be suspended.
Again, both Amazon and eBay allow dropshipping in terms of purchasing products from third parties and reselling them.
However, in theory, you should inspect the quality of the products by physically handling them before you process and fulfill the order.
How to Dropship on Amazon using Amazon FBA
It didn’t take a long time before Amazon caught up with the business of dropshipping.
After all, reduced costs and no need to keep track of inventory are what every business owner dreams of.
That’s why they came up with Fulfillment by Amazon aka FBA.
Dropshipping vs Amazon FBA: What Is Amazon FBA?
One of the main benefits of dropshipping is the fact that you don’t have to pay for storage.
And with Amazon FBA dropshipping, Amazon will pick, pack and ship your orders to your customers.
How does Fulfillment by Amazon work?
- You purchase the products and ship them to one of Amazon’s warehouses.
- Amazon stores your products.
- When a customer buys your product, Amazon ships it.
- Amazon handles complaints and returns.
- You get paid bi-monthly.
While FBA is useful, you should also note that if you do choose to dropship by having Amazon ship your products, you will have to manage your inventory yourself to make sure you don’t go out of stock.
Amazon FBA comes with fees, and you’ll have to carefully package your products (or have the manufacturers pack them for you).
However, FBA can be a good option if you want to scale your business quickly and don’t mind paying for products before you sell them.
Amazon FBA is also available even if you want to sell products through other channels. They offer multi-channel fulfillment services.
Expert Tips for Dropshipping with Amazon & Amazon FBA
When you create bundles, you’re actually creating unique listings that have higher chances of appearing to more people than your regular listing would through the so-called buy boxes.
Additionally, when you offer complementary products, you’re not only getting more profits, but you’re also offering something extra to your customers.
Everyone likes added bonuses (even if they do pay for them).
Optimize your listing and answer questions
Amazon is actually one of the world’s biggest search engines.
This means that keywords, title optimization, and other search engine optimization techniques still work.
In fact, if you use Amazon and eBay SEO techniques right, you’ll be able to attract more customers to your listings.
Use related keywords, and keywords your customers use to search for products like yours.
Create a FAQ section where you’ll respond to common questions to address the customers’ objections, and get that sale.
Because prices frequently fluctuate on Amazon, it’s best to use repricing tools instead of trying to do it manually.
This way, you’ll be getting the most profits, and ensure you’re not losing out on valuable sales because you haven’t updated your price yet.
Reviews on Amazon are everything
Customers want to see reviews before buying a product, so if you don’t have any, it may put off prospective customers from buying your products.
The best way to avoid it is by using email drip campaigns and asking your customers to leave feedback. To automate this process, we recommend AMZFinder.
AMZFinder is email automation tool which helps sellers to send out review requests emails and gain more reviews.
If someone leaves a negative review, don’t panic.
Contact the customer to resolve their complaint, or write a public reply. Avoid confrontation. Instead, apologize and rectify the situation.
If it’s a spam comment, you can ask Amazon to take it down.
Win the buy box
Having your listing appear before other listings with a CTA asking customers to buy your product is the goal.
However, getting the buy box isn’t easy.
In order to win the buy box, you should:
- Bundle products
- Reduce your landed price
- Improve your Perfect Order Percentage score
The first two are relatively straightforward.
However, if you want to improve your POP score, you should make sure you receive positive feedback and have a stellar Amazon seller reputation.
If you often deal with claims, returns, and your shipments are late, your chances of winning the buy box won’t be as high.
Automated Dropshipping on Amazon & eBay
When you’re starting to dropship with Amazon and eBay, you have to be aware of the fact that both of these platforms are huge, and as such, they have their own algorithms and ways of doing things.
If you want to scale your business quickly, you need to play their game.
Now, a regular human can’t do it. Sellers change their pricing often, and you have to keep up. Algorithms prioritize certain listings over the others, and everything can change in the blink of an eye.
When you also consider the fact that you have to manage orders, marketing, and keep manufacturers informed about shipping, things can get confusing fast.
This is where automation tools for dropshipping come in hand.
There are a lot of ways to make it by dropshipping on Amazon and eBay, but there’s no quicker way than with tools that help you streamline your order processing so you can focus on the truly important aspects of running your business.
Automate Product Listing Creation
Some dropshippers build their brands based on listing a few dropship products.
However, success is usually in the quantity of products of products to sell on Amazon.
With a lot of new products, you’re going to need a lot of new listings.
Some Amazon sellers use automated listing creation tools.
However, we’d advise against doing that.
Bulk listing items means you could end up with a lot of mistakes, or at the very least, your listing won’t be properly optimized.
Instead, it’s much better to hire a virtual assistant who can do it for you, while making sure that your listings are still enticing to your potential customers.
Stock Level Tracking
As a seller, you have got to be in tune with your manufacturers’ stock levels.
If you’re shipping with Amazon FBA, then the need to monitor stock levels is even more important.
The best inventory management automation tools help you not only monitor levels from product sources, but they will also:
- Track prices
- Set up and update markups
- Update listings according to whether the products are in or out of stock
Your inventory management tool should automatically update your listings as it gets information from your manufacturers and customers in real-time.
If you’re shipping globally (and you have suppliers all over the world, as well), you want to minimize the costs by routing intelligently.
For example, it’s always going to be cheaper to ship to German customers from a French factory, than shipping from China to Germany.
If you routed orders on your own, it would take a lot of time. However, with order routing tools, everything will be taken care of automatically.
The majority of providers now offer intelligent order routing.
This approach ensures that your customers get their items quickly while increasing your profit margins by reducing shipping costs.
Daily Workflow Automation
Finally, as you scale, you’ll see that even simple processes take a lot of time.
Fortunately, you can automate the majority of them, especially with software that offers complete automation; from marketing to order routing.
Of course, you can opt for individual tools.
For example, if you want to attract more customers and generate reviews with email marketing software, you can opt for tools that help you create automated drip campaigns.
It all depends on the needs and the size of your business.
Keep Seasonality in Mind
In dropshipping, seasonality matters when applied to the following three aspects:
- Global suppliers
Some months are simply slower than others. Many sellers (and other business owners) experience slow periods in January and February.
However, slow periods depend on your niche.
Seasonality on the Dropshipping Suppliers’ Side
Again, your experience will depend on what you sell, who you sell it to, and whose products you resell.
When it comes to dropship wholesale suppliers, make sure you conduct research about the country they come from.
For example, Chinese New Year is at the end of January, so all operations are paused (or slowed down) during that period before suppliers resume their activities.
This means that you won’t be able to dropship products during that time, especially if the manufacturers are packaging and shipping them.
If you use third-party storage services such as Amazon FBA, you should make sure you stock up on products that are popular at the time so you don’t run out of stock.
An alternative route is to have a network of suppliers who dropship.
For example, if you have Chinese wholesalers, have a US supplier as a back-up so you can keep churning even when your main vendors can’t fulfill your orders.
If you’re dealing with dropshippers who also get their products from other suppliers, make sure you know who the source suppliers are, and what seasonal factors can affect them.
Seasonality on the Product Side
Christmas trees aren’t the only thing flying off the shelves during Christmas.
Similarly, some products simply sell more at certain periods.
If you really want to maximize your profits, dropship seasonal products.
Leverage your understanding to stock up on popular products so you can start selling as soon as customer interest spikes.
For example, BBQ equipment is always a hit starting in May.
If you’re selling similar products, you’ll have built up the reputation necessary for your listing to appear in the top spot.
You can use tools such as Google Trends, platform statistics, and even social media to find seasonal products that will help you earn even more revenue with your Amazon dropshipping business.
Is there such a thing as luck when it comes to dropshipping seasonal products?
Some dropship wholesalers believe in it. They claim that some periods are just slower than others, and that’s the way it is.
Normally, January and February are slower because of New Year’s resolutions. People are trying to save money because they’ve spent so much during the holidays.
There’s always a rational reason for why consumers behave the way they do.
And if you truly want to scale your dropshipping business, you’ll understand what motivates your customers’ behavior.
When you have a steady customer base, ask them for their feedback. Conduct market research. Adapt accordingly.
It’s the best way to future-proof your dropshipping business.
Invest in Your Backup Plan
Dropshipping on Amazon and eBay is a great way to kickstart your eCommerce business.
However, as you scale, you’ll need to have an online presence that you can rely on: your own online store.
Any platform can change their terms of service, and prohibit the things they used to condone yesterday. It’s happened numerous times.
However, the solution isn’t to say: “Then I’m not going to use Amazon and eBay for dropshipping.”
Instead, you should make the best of both worlds: e-commerce platforms and your own online dropshipping store.
Make the Best of eCommerce Platforms
In the beginning, platforms for ecommerce are going to be a vital source of customers for your business.
You’ll get access to hundreds of millions of people.
And to scale from there, make sure you start creating your brand.
The best way to do it is to stick to a particular niche and build up your reputation in it.
Then, you can also white-label or private label products. Add your logo, agree on modifications with suppliers, and make your products uniquely recognizable.
Keep in mind that building a brand usually requires you to stick to particular types of products.
It may be weird if you’re in the fitness niche and suddenly start selling Santa phone cases just because the season is right.
However, you can put a seasonal spin on any kind of product, so don’t let that put you off.
Once you’ve created a brand, customers will start recognizing it. If you get a lot of repeat customers, take that as a sign that you’re on the right path.
Build Your Own Website for Selling Products
Typically, you’ll first have to select the platform to build your store on.
There are a lot of great options out there. Make sure that the option you select is the one that fits your business’ needs completely.
Once you’ve set up your store and integrated everything with the tools you use (automate everything you can), it’s time to promote.
Start promoting your cash cow products first.
Are there some products that sell well, no matter the season? Emphasize the reviews you’ve received for them.
If possible, sync Amazon and/or eBay reviews to your website. This will give customers the social proof they need to buy from you.
Make sure you also give your customers an incentive to buy from your store, as opposed to buying your products through Amazon and/or eBay.
Contemporary consumers check prices on platforms before buying a product, always searching for a better deal. Sometimes, motivating them can be as simple as offering a small discount.
Finally, make sure you capture customer information. This way, you’ll be able to up-sell and cross-sell with email marketing later on.
The real advantage of having your own dropshipping store is that you get complete control over what you sell, and how you sell it.
Additionally, running your own store will help you improve your brand awareness, ensuring that, no matter how algorithms change, your business stays steady and profitable.
Dropshipping mysteries? Unveiled.
It’s time to start selling!