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What is Dropshipping?

Amazon Basics / October 15, 2018

What is Dropshipping?

Dropshipping is a supply chain management method. The seller would find a wholesaler or manufacturer and market or advertise the product on their store. When a customer buys from the online store, the seller collects payment, pays the supplier and forwards the order to the supplier. The supplier will then collect payment and ship product directly to the customer.  Basically, the seller is the middle man. They only thing they partake in is processing the order and forwarding it to the supplier so the supplier can fulfill it.


Dropshipping on Amazon

Dropshipping on Amazon is popular and can be successful if you put in effort and stay consistent. Dropshipping has many benefits and they include:

  • Not holding any inventory, the supplier gets the order ready and ships out everything for you.
  • Easy to start, unlike private labeling and retail arbitrage, you don’t need a lot of money to start dropshipping since you aren’t ordering any product and paying for storage fees through FBA.
  • No storage fees, like mentioned above since the supplier is sending all of the product from their factory you do not have to worry about spending money sending your inventory off to Amazon or storing your products in the warehouses.

The first step to dropshipping on Amazon is finding the right supplier. Why is this important? Because the supplier is going to be someone you will contact on a weekly basis because this is where you are getting your product from and you need to be updated on the supply each week, especially with dropshipping since technically the only thing you are actually dealing with are the transactions.

Items for Dropshipping

Popular items to dropship on Amazon according to ecomdash are:

  • Health and beauty products
  • Computer accessories
  • Cell phone accessories
  • Party supplies

You can technically dropship anything you want to as long as you keep up with it. One thing to worry about when it comes to dropshipping popular items is watching which product becomes extremely crowded. It isn’t ideal to be that person who is dropshipping something 60+ sellers are selling, especially if you’re just starting off with no reviews. Competing with other sellers who have reviews and loyal customers, while you are still trying to build your business is really difficult. Other ways to find items to dropship include:

  • Checking Amazon’s best selling category
  • Checking Amazon’s wish list category
  • Looking for products with a high search volume
  • Finding the best selling products in each category
  • Checking Google Trends for trending products or products on the rise

Need More Help?

If you start dropshipping and need help with your sales, you should check out Sellozo. A couple things we specialize in include:

  • See each product’s True Profit
  • Measure performance for every product, SKU, and ASIN in order to make decisions about what products to continue selling
  • Use Smart Tags to organize your products in the way that makes sense for your business
  • See organic and Sponsored Product sales and analyze how your ads are impacting your organic reach
  • Bulk management for campaigns, ads, optimization, and more

More Helpful Articles:

Selling Travel Accessories on Amazon

Amazon Seller Term Glossary

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