If you are thinking about dropshipping on Amazon Beware! Amazon has a strict policy when it comes to dropshipping. If you take a wrong step there is a high chance that you will get your account suspended for life. So this is something to think about before you just jump on and list a product to dropship on Amazon.
What is Dropshipping?
Dropshipping is a fulfillment method where a website or store owner doesn’t keep the products or inventory in stock that is being sold to its consumers. Rather, when a store sells a product, it purchases the item from a third party. Then the third party ships the product directly to the customer. eliminating the need to store and purchase inventory. With this method there is generally lower overhead but also limited profit margins since you aren’t purchasing any inventory until the consumer’s purchases it from you.
Dropshipping is perfectly fine if done right. It is an entry level business model suited to entrepreneurs who want to get their feet wet in the world of ecommerce. Dropshipping allows you to open up an ecommerce store without storing any inventory or dealing with shipping. In Fact you will never touch or physically see any of the products that you might be selling. The Manufacturer or Wholesaler handles all the storage and shipping of the product while you concentrate on marketing.
Amazons Dropshipping Policy
While Amazon does allow dropshipping there are some important rules to follow.
- All items sold must be able to be identified as being sold by you. Example don’t create a sellers account called Samsung and dropship Samsung products.
- All shipping labels and packing slips must contain your business information. This is where you have to be trusting your manufacture to the white label of the products.
- You are responsible to accept returns that comply with Amazon standard return policy.
The important part here is to make sure that when you do dropship. The manufacturer or store that you dropship from must put your package slips and your information on the box. If Amazon finds out that you didn’t then your account will be suspended. For example, you can’t drop ship from Walmart’s website if the product is cheaper on there because Walmart will fulfill the order with there labels and information. If a customer notices this and then complains to Amazon you won’t be able to defend your claim.
Examples of drop shipping that is not permitted:
- Purchasing products from another online retailer and having that retailer ship directly to customers.
- Shipping orders with packing slips, invoices, or other information indicating a seller name or contact information other than your own.
- Failure to comply with these requirements may result in the suspension or removal of your selling privileges.
Some manufacturers will dropship for you and supply the needed information on the packages that will comply with Amazon’s rules and regulations.
The do’s and don’ts of Dropshipping on Amazon
- Dropship with the right manufacturer
- If there is a high-profit margin (remember Amazon takes 15% commission)
- Short Term if you run out of stock it might be ok to drop ship until you get more inventory in.
- Always check stock to make sure the supplier hasn’t run out.
- make sure to get tracking within 24 hours of order for the package.
- Dropship for anyone makes sure you trust the supplier.
- Let drop shipping with Amazon be your only source of income.
- Stay away from placing orders on other websites to drop ship for Amazon
- Don’t run out of stock always check with the supplier that there is inventory.
While dropshipping is viable through Amazon, It isn’t something I would recommend as your only way of doing business. If you are just starting out then maybe yes you can dropship a few products make a little money and buy some inventory or if you know a manufacturer well and you run out of inventory then allow them to drop ship for you until your items come back into stock is viable. But long term you run too great of a risk that is out of your control for getting your account suspended. Mistakes happen all the time in e-commerce you just have to make sure you are the one in control of them.