Amazon Dropshipping Guide: Tips, Rules, Tools and Fees

Everyone has heard of Amazon. It is the world’s largest e-commerce platform and shopping website. Amazon offers a spectacular avenue for sellers, shoppers, and even dropshippers. 

Amazon shares 45% of the US e-commerce market. It also has over 310 million active buyers worldwide. So, how does it sound to get a slice of the cake from this huge market as a dropshipper?

If you want to earn using Amazon dropshipping, this article will educate you on everything you need to know. We will also cover tips, tricks, and software to boost your business. Plus, you will explore handy information like amazon dropshipping fees.

Read our Amazon dropshipping guide until the end and give your business a booming start. 

Table of content:

• Why is Amazon Important for E-Commerce?
• Amazon Allow Dropshipping
• Amazon FBA vs Dropshipping
• How To Start Dropshipping on Amazon?
  • Discover Winning Niches with Low Competition
  • Analyze Amazon Stores
  • Find Reliable Supplier
  • Set Up an Amazon Seller Account
  • Create a product listing
  • Focus on Marketing
• Amazon Dropshipping Fees
  • Is Amazon dropshipping profitable?
  • How to dropship on Amazon without money?
  • Amazon Seller Fees
• Top Dropshipping Software for Amazon
• Amazon to eBay Dropshipping
• Amazon to Shopify Dropshipping
• Amazon to Etsy Dropshipping
• AliExpress to Amazon Dropshipping
• In Conclusion
• FAQs
  • What is Dropshipping On Amazon?
  • How To Make Money Dropshipping On Amazon?
  • How Does Amazon Dropshipping Work?
  • Is Amazon Dropshipping Profitable?
  • How To Dropship On Amazon Without Money?
  • Does Amazon Allow Dropshipping?

Why is Amazon Important for E-Commerce?

Amazon is crucial for e-commerce because it is the first stop that everyone visits to purchase items. It sells everything a person can imagine, from sports goods to the latest tech gadgets. Let’s deep dive into stats to comprehend how valuable it is for dropshippers.

• Amazon has over 300 million active shoppers from over 180 countries.
• There are 2 million small- and medium-sized businesses on Amazon as third-party selling partners. In other words, you will have 2 million competitors.
• Every month, 96% of all U.S. adults ages 25-54 see Amazon Advertising campaigns 
• Amazon’s net revenue increased by over 469 billion US dollars in 2021. 
• 90% of the buyers show satisfaction and trust in Amazon and it is selected as the top #1 shopping website in the US.

These statistics clearly show the significance and volume of Amazon sales and platforms for buyers and sellers. Hence, it can be a lucrative idea to start dropshipping on Amazon. 

💡Need to Know: The Ultimate Guide to Dropshipping

Amazon Allow Dropshipping

Before launching your dropshipping business, it is vital to learn about policies and guidelines. But the quick answer to the “Does Amazon allow dropshipping?” is “Yes, it allows it as long as following Amazon dropshipping policy.”

To become a dropshipper on Amazon, you must comply with these rules. 

1. You must be the seller of record of your items.
2. You must identify yourself as the seller of your products on;
   1. Packing slips
   2. External packaging
   3. Invoice slips 
3. You must be responsible for accepting and processing your customer returns 

Amazon Dropshipping Policy

This section of our Amazon dropshipping guide explains the dropshipping policy clearly to put a spotlight on new merchants who are confused about how amazon dropshipping works. 

If you wish to fulfill orders through a drop shipper on Amazon, here are some guidelines for you;

• Have an agreement or understanding with your supplier that they will mention you as the seller of record on all slips and items
• Remove any slips or stickers that identify anyone else as a third-party dropshipper before shipping the product.
• Be fully responsible for accepting and fulfilling the requests and returns of your customers.
• Do not violate any terms of the agreement and Amazon policies

Here are some instances of misusing the dropshipping option, which could result in a restriction of your account. 

• If you purchased items from an online retailer and have them shipped directly to your customers
• If a shipment doesn’t identify you as the seller of record of your sales
• If your shipment or invoice slips, mention anyone else as the seller of record.
• If your seller's name creates confusion for the buyer about whom they should contact related to any request, complaint, or inquiry 

💡Excited about order fulfillment. Then Explore 12 Different Order Status 

Amazon FBA vs Dropshipping

Amazon FBA is the Fulfillment by Amazon program that handles services such as;

• Order fulfillment
• Storage 
• Returns
• Customer service

Over 89% of sellers on Amazon use the FBA service, which is very helpful for new and upcoming sellers. Amazon is a billion-dollar corporation, and its FBA service is very robust. 

Thus, You may not know which business model to choose from Amazon FBA vs Dropshipping. So, it is useful to compare the two models and explore the benefits of each.

Comparison between FBA and Dropshipping 

Are you confused about deciding which fulfillment method you should use? Amazon FBA and dropshipping are both profitable solutions, and each has advantages. Let’s take a look at the pros of Amazon FBA and Dropshipping. 

Pros of FBA

• Through FBA, sellers can send their inventories to Amazon’s warehouse, which is responsible for handling the packaging and delivery. 
• FBA products receive a prime badge on listings 
• Customers trust products that have prime badges, which you can only receive using FBA
• Amazon handles all customer service complaints, requests, and returns for FBA-listed products.
• Sellers can also use FBA to fulfill products for other e-commerce sites

Pros of dropshipping 

• Low-cost for startups as compared to other services
• You do not have to order products in bulk
• Dropshipping does not require you to spend thousands of dollars beforehand to stock goods.
• It is relatively easier to set up 
• Amazon allows dropshipping as long as you comply with their guidelines 

Wrapping Up 

Amazon FBA is the better option at a higher cost. Dropshipping is a great option for newbies, plus it is cheaper. If you cannot afford FBA and want to start a new business on Amazon, then dropshipping is the way to go. Make sure you follow the Amazon dropshipping rules, and you will be fine. 

💡Nice to Know: How to Start Dropshipping For Free

How To Start Dropshipping on Amazon?

Do you want to learn how to make money dropshipping on Amazon? You are at the right place to learn all the fundamentals of Amazon dropshipping.

1. Discover Winning Niches with Low Competition

The most crucial step in becoming an Amazon seller is finding the proper item. A profitable product should have;

• High demand
• Low supply
• Low competition 

A new seller should take an abundance of time and struggle to discover a winning niche to sell on Amazon. If you rush through this step, you will regret it later and fail to contest multiple sellers.

Here is the FindNiche Recommend Niche tool to discover the best amazon dropshipping products. This is an extremely practical tool for beginners on Amazon. You can explore products and view their; 

• Price 
• Cost
• Profit
• Sales, etc. 

It also showcases the time when the product was listed, so you have the best idea about the product's performance before you decide about dropshipping it on Amazon. 

💡Nice to Know: How to Find Low Competition Niches with High Profit? 

2. Analyze Amazon Stores

In the second step of learning Amazon dropshipping, we suggest analyzing your competitor’s store. 

This analysis gives you a distinct perspective on dropshipping strategies. You should learn from the SEO and marketing strategies of other Amazon stores. After analyzing a few stores, you will start to notice what methods work best for promoting your store. Furthermore, you can learn from their mistakes. 

The key to analyzing competitor stores on Amazon is to look out for;

• Product choice
• Product listings
• Visualizations
• Customer feedback

The Amazon Seller Center is the finest tool that makes your job easier and allows you to explore stores conveniently. There are several filters, such as stores’ locations and dropshipping platforms. You can also view the feedback in a specific time window. 

3. Find Reliable Supplier

A reliable supplier is a key to your success. Even if you handle all the fulfillment processes with achievement but your supplier is not adequate, your business will suffer. 

A reliable supplier guarantees a steady supply of goods so your shoppers will not face a stock shortage. Moreover, on-time delivery is crucial for  Amazon dropshipping. If you can’t deliver your orders on time, your shoppers will not be satisfied and turn to you with poor feedback.

A splendid tool that can assist you with finding reliable suppliers is FindNiche Supplier Analyzer. It allows sellers to browse and explore various suppliers. Dropshippers can use this tool to sort suppliers based on;

• Location
• Product Type
• Feedback duration
• Followers
• Time 

Your search will yield very beneficial results. You can explore stores and their performance. FindNiche offers the;

• Number of products
• Categories of products
• Number of followers of the store
• Percentage of positive ratings
• Ratings and feedback

These stats will help you pick the proper supplier, guaranteeing happier customers and more clients. 

4. Set Up an Amazon Seller Account

To start dropshipping on Amazon, you must have an Amazon seller account. If you don’t have a seller account yet, don’t worry. Follow the instructions below, and create an account effortlessly.

Step1: Visit the Amazon website

The initial step is to visit this link which will take you to the Amazon website.

Step2: Compare plans

You can open a new account immediately, but we recommend you check the selling plans first.

Click the “pricing” tab and navigate to “compare selling plans.” 

Here you can see a comparison of individual and professional plans. You can check the features, benefits, and price differences based on your needs. 

💡The professional account is the most acceptable option if you plan to sell more than 40 products. After you have decided on the account type, let’s move to the next step. 

Step3: Sign up

When you click on the “sign up” button on the Amazon seller home page, you will be redirected to the account creation section;

Enter the relevant information to sign up for an Amazon seller account. 

Step4: Verify your email 

After entering the email address and password, you will receive an email for verification.

When you click on the link that you receive in your email, you will see the following screen; 

Here you need to provide the business location of your country, business type, and your name, and agree to Amazon’s terms and conditions. 

Step5: Provide personal information 

When signing up for a new account, you must provide your personal information to Amazon. Make sure you enter everything correctly.

Step6: Add billing and payment information 

After you have provided your personal information, you need to enter your bank details. The payment information helps Amazon manage financial transactions with its sellers. Hence, make sure you enter the correct information. 

Select the, I understand button, and you will proceed to the next screen;

After you enter your bank details and click the verification button, Amazon will verify your bank information. 

Now, you need to offer your credit card information;

Step7: Update store details 

In this step, Amazon requires users to enter store and product details.

Here you need to answer some simple questions after you pick a name for your store. After you fill out this form, proceed to the next step.

Step8: Verify your identity 

You must confirm your identity to the Amazon seller center. 

You can upload any legit document, such as a driving license, for verification. 

Now, you need to wait a few days while receive a postcard that Amazon will send to your address. It can take several days for the card with the code to arrive at your address. 

After you get the card, you can enter the code. Then, you can proceed to the seller account operation. 

Step9: Run your store 

After entering the details, you have registered as a seller on Amazon. Your home screen on your Amazon seller account will look like this;

5. Create a product listing 

Registering for an account is completed successfully. Now, you can update your inventory on your seller account. Furthermore, you can enter the type of product you are selling, its price, and all the other relevant information, such as images and descriptions. 

6. Focus on Marketing

Every dropshipper knows that creating a seller account is not adequate to earn money. So, How to make money dropshipping on Amazon?

The success of any sales business lies in marketing. Running ad campaigns on both Amazon and other platforms, such as Facebook, will help you maximize your conversion. 

Besides, affiliate marketing is also an exceptional method to promote your items. 

Digital marketing is on the rise, and it is the future. Social media platforms and influencers trigger shoppers to purchase your products and this enables you to make huge profits. 

Amazon Dropshipping Fees

Is Amazon dropshipping profitable?

There are various factors that determine this question but amazon dropshipping fees have the utmost importance.

Let’s see how much Amazon charges its sellers. The best way to explore up-to-date fees is to visit the pricing section on the Amazon seller page.

How to dropship on Amazon without money?

The great thing about selling on Amazon is that you don't have to spend any money to get started. However, if you use the private label business model, you have to pay (at a higher price) to buy the inventory before you sell it. 

💡 Need to Know: Branded Dropshipping 2022: All-in-one Guide For Beginners 

However, it may not be as expensive as you might think. In fact, according to a survey of 3.500 Amazon sellers, 16% of sellers started their business with less than $500, despite a reported average cost of $3,836.

Amazon Seller Fees

Additionally, regardless of the fulfillment method you choose, some fees will be associated with your merchant account.

Here are some of the Amazon fees the new sellers may have to pay:

• Amazon Referral Fee: This is a fee that Amazon charges on its platform as a commission on sales. It varies by category but ranges from 12 to 40%. Most products have a 15% restocking fee. 

• Individual Seller Fee: An additional $0.99 per sale is made on top of your referral fee. If a seller chooses an individual seller account instead of a professional plan, he only pays for it.

• FBA Fees: If you use Amazon's FBA program, you must pay Amazon's shipping and handling fees. This is usually around $3.00 for small items weighing up to one pound. The fee increases as the item become heavier or larger.

• Other Amazon Fees: If you use Amazon FBA, you may also be charged long-term warehousing fees, media fees (if you sell books, DVDs, CDs, etc.), and advertising/marketing fees.

Top Dropshipping Software for Amazon

If you are a new seller on Amazon, or even if you are a professional seller, this dropshipping software can help you massively. With the help of these tools, you can learn a lot about Amazon dropshipping and become aware of the market situation.

1. FindNiche

FindNiche is a very popular software for Amazon sellers.

This tool is a go-to tool for all Amazon sellers. It has many features that allow users to utilize the maximum amount of available information to their advantage. This is the most advanced product research tool for drop-shippers. 

You can find the right products to sell with this tool. This tool has an AI that picks the best products for you, or you can use their experts’ suggestions. 

Features

• Account-Based Marketing.
• Content Marketing.
• Conversion Rate Optimization.
• Event Management.
• Customer Data Platform (CDP)
• Demand Generation.
• Digital Analytics.
• Email Marketing.

Pricing 

Based on your package selection, there are several pricing packages on FindNiche. You can go from 9 dollars to 500 dollars a month for the  VIP enterprise package. You can try premium plans for $1 for 3 days.

2. AmzChart

AmzChart has a user-friendly interface that even inexperienced Amazon sellers can easily navigate. Even better, it presents data and analysis results in an easy-to-understand format.

AmzChart has additional features such as product monitoring and market insights, making it suitable for data-driven product research and decision-making needs.

Features

• Extensive, Regularly Updated Database.
• BSR Data
• App Is Newbie and Pro-Friendly.
• Product Research.
• Keyword Research.
• Charts.
• Amazon Category Path.
• Competitor Tracking

Pricing

New users get a 40% off on the AMZ chart. The basic pricing plan costs 9 dollars per month for new users. You can try premium plans for 7 days for just $1.

3. Wholesale2b

Wholesale2b is one of the market's most popular and cost-effective shipping automation solutions.

Wholesale2b offers simple pricing plans including unlimited product listings, automatic inventory management, and one-click ordering, making it a truly comprehensive platform.

Features 

• find top suppliers
• search for dropship products
• upload descriptions and images
• sync inventories
• automate order fulfillment
• access sales analytics data

Pricing 

The pricing on Wholesale2b varies from $29.99 to $49.99 based on your needs.

4. SkuGrid

Skugrid monitors your listings in multiple markets and gains global reach. It supports over 800 suppliers. It also lets you price and tracks your products on over 20 selling platforms. You can get email notifications about inventory and supplier price changes.

Features

• Marketplace Lister & Automated Price & Stock Monitoring.
• Several Ways to Import Your Items.
• Split Range & Formulas Per Store.
• Frequent Email Notifications.
• Get Credit For Shopify Store.
• Free WooCommerce Store.
• Compete for Clients with Buy Box Owner.
• No eBay API.

Pricing

SkuGrid has a lot of pricing packages for new sellers. You can start from 14.99 USD on Skugrid. The most expensive plan is 

5. SaleFreaks

This is the best tool for Amazon to eBay dropshipping merchants. This tool can run on auto-pilot 24/7 and bring you maximum value. 

Features

• Variant Mapping.
• Bulk Orders.
• Real-time Order Tracking.
• Pricing Optimization.
• Product Data Management.
• Reporting (Analytics)
• Supplier Management.
• Shipping Management.

Pricing 

You can start with SaleFreaks 19 GBP. There are other packages with more features available as well. 

6. Ordoro

Ordoro is a cloud-based one-stop order fulfillment management tool. It is a primarily designed tool for e-commerce organizations. It helps coordinate and organize inventory and seamlessly integrates with a variety of shipping companies, including USPS, FedEx, DHL International, and more.

Features

• Enable auto-audit
• Access real-time insights on shipping metrics. 
• Inventory Management
• Seamlessly integrate across various marketplaces
• shipping partners
• Centralized space. 
• Manage, organize and track various warehouses

Pricing

You can start free on Ordoro, then you can pick up a package that suits your business requirements. The enterprise plan is $999/month.

7. SellerEngine

Seller Engine is Amazon's real-time repricing tool. It allows hundreds of unique price combinations to adapt to market conditions and personalize your pricing strategy.

Features

• Fully customizable smart strategies.
• Win the purchase box.
• Automatic pricing rules to start quickly.
• Private label solutions.
• Never lose money on any sale.
• Amazon experts’ support

Pricing 

The pricing on SellerEngine goes from as low as 50 dollars up to 2000 dollars for enterprise packages. 

8. SellerTools

SellerTools is an innovative and robust set of tools that saves 90% of the time. Their support team is very receptive to user feedback and they are constantly adding new innovations. This is a must-have tool for sellers who are serious about growing their Amazon business.

Features

• Product Manager
• Product research
• Chrome extension
• Competition research
• Automate operations
• Alerts 

Pricing 

You can start for free on SellerTools; then, the pricing plans go as low as 27$ per month. 

9. FeedCheck

FeedCheck is brand management software designed to help businesses in retail, hospitality, and other industries obtain and evaluate product reviews and ratings. Admins can generate reports to analyze data and text from competitor reviews.

Features

• API
• Activity Dashboard
• Activity Tracking
• Alerts/Notifications
• Campaign Management
• Customizable Reports
• Dashboard
• Data Import/Export

Pricing

You can start with FeedCheck for 129$ per month. There is also a custom package option for enterprises. 

10. Importify

Importify allows entrepreneurs to import cheap products to foreign countries using dropshipping platforms.The platform allows your company to do business worldwide through a single dropshipping platform. You can make your life easier and reduce expenses.

Features

• Automate your Orders
• Create a brand
• Find out about the products in your niche
• One-click to import products
• Automate Product Orders

Pricing 

You can choose to pay via monthly or yearly plan at Importify. The monthly basic plan starts at 14.95 USD.

Amazon to eBay Dropshipping

Amazon eBay dropshipping is a good business avenue for drop-shippers. It is legal to sell Amazon products on eBay. eBay offers low-entry competition. 

Familiarize yourself with eBay policies and follow the rules to avoid suspension of your seller account.  

💡 Need to Know: eBay Dropshipping in 2022: How to Dropship on eBay? 

Dropshipping from Amazon to eBay seems attractive because it appears to be risk-free. You don't need to invest upfront because you don't need inventory to sell. However, it is not exactly without risk. Risks associated with disconnecting eBay from Amazon include 

• Risk of account suspension
• Loss of sales due to Amazon price changes
• Negative reviews

In a nutshell, it can be a profitable business model – if you know how to do it right, it can earn you considerable profits. 

Amazon to Shopify Dropshipping

Shopify dropshipping Amazon is a good opportunity for new sellers. However, you need to follow all the rules and guidelines of Amazon to dropship to Shopify properly. 

💡 Need to Know: How To Sell On Shopify : 3 Sales Models Taught You To Understand Shopify 

Amazon dropshipping is a great way to increase sales for your business. If you choose to incorporate this dropshipping method into your Shopify store, it has all the tools to help you become a successful drop shipper.

Amazon to Etsy Dropshipping

Etsy has specific guidelines about the products you can sell on its platform. You can only sell handmade, vintage and craft items on Etsy. 

💡 Need to Know: Etsy Dropshipping Ultimate Guide to Etsy Sellers 

If you want to ship products from Amazon to Etsy, you would need to ship the products to yourself so that you can remove the Amazon logo and receipt. Hence, dropping from Amazon to Etsy is not very convenient or possible. 

AliExpress to Amazon Dropshipping

Dropshipping from AliExpress to Amazon works in the following manner;

You, the seller, will have to use AliExpress and find products or suppliers for the products you wish to sell on Amazon. 

The seller will then list the product for sale on Amazon. When a customer buys a product from Amazon, the merchant orders the product from AliExpress and chooses to ship the product directly to the customer's address. 

The benefit of this dropshipping is that you don't need to buy the product before dropshipping, so you don't need to waste inventory and resources. 

💡 Need to Know: Aliexpress Dropshipping: Most Complete Guidelines

In Conclusion

Amazon dropshipping will be very beneficial in 2022 and the following years. You can save resources, start with low investment and earn good profits. However, you need to follow the Amazon's rules and guidelines for product delivery. Otherwise, your account will get banned. 

We recommend our users do proper product research before starting dropshipping. We have also reviewed several good dropshipping tools in the article that make your dropshipping business a success. 

FAQs

What is Dropshipping On Amazon?

Amazon dropshipping is when the seller doesn’t use their own inventory. The seller also uses a third-party supplier to ship the product to the buyer. 

How To Make Money Dropshipping On Amazon?

You can make money by dropshipping on Amazon using several third-party tools. These tools will guide you to find the best suppliers and products and increase your odds of success. You can also use tools to manage your seller store. 

How Does Amazon Dropshipping Work?

Amazon dropshipping works by using a third-party supplier to store and ship the products to your buyers. The drop-shipper doesn’t have to use their inventory. 

Is Amazon Dropshipping Profitable?

Yes, Amazon dropshipping is profitable. However, you need to find the right products and suppliers to make a good profit.

How To Dropship On Amazon Without Money?

You can set up a seller account on Amazon and do product research to find a cheaper product on another website, such as Ali-express. If you get the order from Amazon, you can order the product from your supplier from the money the buyer pays you and keep the profit.

Does Amazon Allow Dropshipping?

Yes, Amazon allows dropshipping. However, you need to follow the strict policies of Amazon, which include being named the seller for the r record. Otherwise, your account will get suspended.