Amazon dropshipping is a business model, where the seller lists the product owned by third parties on Amazon. When it is sold, the third party will deliver the product to the end customer. The seller pays the third party wholesale price by selling to customer at a retail price.
IS AMAZON DROPSHIPPING LEGAL?
Amazon dropshipping is a 100% legal business model. The dropshipping policy for Amazon is clearly mentioned here, on the Amazon portal itself. You must take responsibility for the product to be delivered in good condition to the customer within the promised timeline.
How does Amazon dropshipping works?
As you already know, Amazon is the biggest marketplace for various products that can be sold online, basically from A to Z. It is like you are opening you shop in the world’s biggest market. The product chosen should be unique else you will easily be beaten by thousands of sellers who are already selling the same product with 100’s of reviews. There are primarily two methods to start dropshipping on Amazon.
Method 1: Catalog Dropshipping
You register as a seller, list a product on Amazon which is your dropshipper’s catalog. When a sale is made, the product is delivered to your customer by the dropshipper. You get paid from Amazon in retail price and you make payment to dropshipper in wholesale price.
Method 2: Print on demand Dropshipping
You register as a seller, list a product on Amazon which is your dropshipper’s catalog with you own design. When a sale is made, the product is custom printed with your design and then delivered to your customer by the dropshipper. You get paid from Amazon in retail price and you make payment to dropshipper in wholesale price.
Advantages of Amazon Dropshipping
1. Unlike other marketplaces, Amazon allows dropshipping.
Dropshipping is acceptable for Amazon when you are following their terms and policies related to the same.
2. Setup cost is very low.
You may need to do some advertising for the products in the initial phase. Everything else is your research and smart work done on the product selection and listing.
3. Buyers are already there.
When you do your keyword research right and sell a product which is in high demand, sales starts immediately. Unlike if you have your own store, you need to do store setup, maintenance, advertising, social campaigns to get visitors to your store.
4. Make use of the ecosystem.
There are thousands of third party companies, who will help you with product listing, improving your listing quality with A+ content, do Amazon advertising etc.
5. Trust Factor.
If you are graphic designer, customers will be more likely to buy your products on Amazon than from your online store. Everybody knows Amazon and exactly know what to expect and what not to.
Disadvantages of Amazon Dropshipping
1. Minimal control over quality.
The quality of the product and customer experience are with your dropshipper’s hands.
2. Low Margins.
Amazon will take a percentage from your sales based on the product sold. And a fixed fee and courier fee.
3. Design can be easily copied by other sellers.
When a product is sold in good numbers, other sellers or Amazon itself may launch the same product from their own brand, which will make a tough sell for your products.
4. Price sensitive buyers.
Amazon customers are always price sensitive and looking for best possible deals on everything. So you have to price it competitively.
5. Seller Competition.
Unless you are selling a very niche unique product, there will be hundreds of sellers already selling your product or a different version of the product already on Amazon.
Process to start selling on Amazon using Dropshipping
Signup as a seller on Amazon using basic business documents and apply for GSTIN.
Find a product to sell (from dropshipper’s catalog). The most important part here is to do extensive keyword research on Amazon. You can start with Amazon auto suggestion in search bar or use any third party tools like Keywordtool.io, Junglescout etc.
Create Listing Content. High resolution images inline with Amazon’s image guidelines, product features, care instructions, warranty terms, usage instructions, color, size variations are imperative to do a quality listing on Amazon.
List the product on Amazon. Listing should be done under proper category to get full benefit of the search volumes. You cannot list the same product under multiple categories.
Do Amazon advertising with minimum budget to show your product first on the search pages over the Prime FBA products.
Answer all the customer queries as fast as possible. Get feeback done on the same product page for each and every sale. Communicate properly with the dropshipper about the inventory details, delivery delays, exact product specifications etc.
A unique Problem for Indian E-Commerce
Cash on delivery orders. Studies finds that one in three of COD orders returns without being accepted by the customer. This is the hardest part for the dropshipping sellers. Dropshippers do not want physical inventory, manufacturers do not take back the sold goods. So everything comes to a standstill here when we talk to dropshipping in India. You can try offering only prepaid model with self shipping in Amazon, but the sales will be very low. Qikink offers a unique solution to the problem here.
Solution for COD Returns from Qikink
Qikink understands the problem and offers unique solutions to the sellers for avoiding physical inventory and COD losses. It happens in following two methods.
You can sell Qikink’s large range of Plain T-Shirts with COD on Amazon. When the COD order is returned, Qikink takes the product back and refund you the product cost. As simple as that. You need not worry about COD returns at all while selling Qikink’s plain T-Shirts on Amazon.
You can design and sell any of Qikink’s merchandise with COD on Amazon. When a custom printed product like a T-Shirt, mobile phone case, of a coffee mug cod order returns, Qikink stores them at the warehouse for 100 days without any additional charges. When you get a same order with same design again, Qikink automatically considers it a re-ship order and send the product from the warehouse without printing the same product with same design again. You will be charged only for shipping in this case.
The above two innovative methods by Qikink helps sellers sell on marketplaces like Amazon without worrying about COD returns and scale their brand profitably.
If you want to start selling online with safest option possible while being a full time job or just to startout, Amazon dropshipping is the best option out there. With Qikink’s COD solutions, you cannot go wrong, if you find your product and designs correct. Remember, everything starts with keywords research for dropshipping.