How to Start a Profitable Amazon Dropshipping Business in 2024

Amazon.com is a customer-friendly online retailer, manufacturer of electronic devices, and online services provider. At first, it only sold books, now it expanded its business into more than 30 categories of products.

What’s more, it sells its own electronic devices, such as Kindle e-book reader, Kindle Fire tablet. Amazon made $215.915 billion only from product sales in 2020. Since there are many active users on Amazon, it can be an extra sales channel for dropshippers to start their Amazon dropshipping business.

Dropshipping is now the new trend of online business. Dropshipping allows the sellers to outsource the orders fulfillment process to their suppliers, so they don’t deal with the packing, and the shipment of the products. In addition, they don’t need to deal with the inventory, it is less costly and time-consuming compared to other retail methods. Since you can start your dropshipping business with a very low amount of money and upfront cost, it might not be a big problem to start your online dropshipping business for free in 2024.

While dropshipping on Amazon, you can share the traffic of its website, so dropshippers will face lower cost to attract audiences. However, if you want to do Amazon dropshipping, you should first figure out answers to the following questions:

What Is Amazon Dropshipping

Amazon dropshipping is the same as your classic dropshipping model on other platforms, except that you will sell the product on the Amazon marketplace instead of selling them on other e-commerce stores such as Shopify and Wix.

There are a lot of dropshippers choosing the extra sales channel to do dropshipping because of its huge market share. In addition, dropshippers can take advantage of Amazon’s ads as a useful publicity method.

Since an Amazon dropshipping model is just like dropshipping on other e-commerce platforms, you should know a lot of things when doing dropshipping, for example, how to find reliable suppliers and is there any tool can help you? You are able to get the answer in our How to Find Reliable AliExpress Suppliers article.

How Does Amazon Dropshipping Work

Dropshipping is an e-commerce method in which the seller accepts orders and finds manufacturer, distributor, or supplier to fulfill the orders. That is to say, when customers buy products, suppliers complete these sales directly. So how does Amazon dropshipping work?

Although the whole process of dropshipping sounds a bit complicated, it can be divided into only three simple steps:

• First, an Amazon customer (the audience of your online store products) purchases the product you listed on Amazon.
• Second, once the customer placed the order and completed the payment, you directly purchase the product from your reliable supplier (who you find to fulfill your order) and provide them with customer information and order information.
• Finally, with this information, the supplier prepares and delivers the product to your customer.

The model on the following picture exactly teaches you the basics of dropshipping on Amazon. In the process, you are a middle man connecting your customers and suppliers.

How to Do Amazon Dropshipping - Steps & Requirements

Now that you know how dropshipping works on Amazon, you should learn how to start and whether there are some limitations to start dropshipping on Amazon.

Starting dropshipping on Amazon is very simple, you just need 8 steps to start.

Step 1: Set up Your Amazon Seller Account

The first thing you should do is to set up an Amazon seller account. While choosing the plan, you’d better choose a professional plan, so that you could sell a high volume of products. Keep in mind you also need to offer competitive pricing to attract an audience or have recuring sales. You can go to Amazon seller central to add your information and register.

Step 2: Find In-Demand Products

When it comes to products, the goods should be high-demand. Otherwise, the profits will not be considerable. However, at the same time, you should know, it may be difficult for you to get your money back if you choose to sell highly-competitive products.

So when choosing the products, you should take all the factors into consideration, and then choose the one that is most suitable for you. For more details about how to find a product to sell, you could read Best Dropshipping Products: 18 Hot-Selling Products in 2024 as a reference.

Step 3: Choose an E-commerce Platform

Once you have an account and a product to sell, if you want to go online business with a dropshipping model, Amazon is not your only choice, you also can dropship on eBay and Shopify, etc.

Since now Shopify is supported on Amazon, Shopify allows users to add Amazon as a extra sales channel on their Shopify online store to simplify managing orders on both platforms. And Shopify allows you to customize your online store and provides professionally designed themes, the process will make your rstore more attractive.

Step 4: Find Suppliers

Once you know what to sell, you should find a supplier. No matter where you find the supplier, make sure they are reliable and they can match your demands and requirements. The biggest dropshipping suppliers platform is AliExpress, with cheaper prices, suppliers on it are good options for online dropshipping.

Step 5: Create Your Amazon Listings

Now, you need to create Amazon products listings. You should go to Seller Central -> Inventory -> Add a product. To avoid making mistakes about your product's information or layout, you’d better use the template it provides to add a product.

Step 6: Get Approved for Your Products Category

For some categories, you should apply for permission to sell them. You can go to  Seller central -> Account health -> Policy to know these categories. If they are included in the lists, you should ask for permission before you start dropshipping.

Step 7: Connect Your Amazon Account with Shopify

This step is optional. If you already have a Shopify online store and you want to add Amazon as an extra sales channel for your dropshipping business, you should go to Shopify to connect your Amazon seller account. Go to Shopify, click the sales channel add button, find Amazon, click “ Add Channels”, next step, continue with “Connect to Amazon”. Then you have connected the two.

Step8: Start Promoting Your Store

Now, you have your store and your product. Your business can start. You need to promote your store first, so that it can get orders. You can rely on the Amazon ads services, they are strong publicity tools to promote both your store and products.

Pros & Cons of Dropshipping on Amazon

Understanding both the advantages and disadvantages of dropshipping on Amazon, you can make an informed decision on whether it's the right strategy for your business.

• Access to a massive customer base: Amazon has over 300 million active customer accounts worldwide, providing a huge potential market for your products.
• Leveraging Amazon's brand and trust: Amazon is a well-established and trusted e-commerce platform, which can help boost customer confidence in your products.
• Simplified logistics: With Amazon's Fulfillment by Amazon (FBA) program, you can have Amazon handle the storage, packing, and shipping of your products, simplifying the logistics process.
• Automated order fulfillment: When a customer places an order on Amazon, the order is automatically sent to your supplier for fulfillment, streamlining the process.
• Potential for higher sales: Amazon's huge customer base and effective marketing tools can help drive more sales for your products.

• Competition and pricing pressure: The Amazon marketplace is highly competitive, and you may face pressure to keep your prices low to stay competitive.
• Amazon's strict policies: Amazon has strict policies and guidelines that you must adhere to, which can limit your flexibility in product selection and pricing.
• Fees and commissions: Amazon charges various fees, including referral fees, FBA fees, and others, which can eat into your profit margins.
• Reliance on Amazon: If your business is heavily dependent on Amazon, you risk being affected by any changes or disruptions to the platform.
• Difficulty in building brand recognition: It can be challenging to build your own brand recognition on the Amazon platform, as customers may be more focused on the Amazon brand.

What Else You Should Know about Dropshipping on Amazon

Dropship on Amazon might have benefits and limitations, checking them out will contribute to your dropshipping business’s success.

So what is the benefit? It’s known to all, Amazon has millions of active users, in other words Amazon has a big customer database. Thus, when you start your Amazon dropshipping business, you don’t need to pay much attention to finding an audience for your goods, such as marketing and SEO. Your products and store can be considered more trust-worthy and reliable if they are available on Amazone.

However, there are still some limitations:

Policy Restriction - As mentioned above, some categories are forbidden on Amazon, and for some other categories, you should ask permission, this can cause you some issues. If, at any time, your products don’t comply with the agreements, they will be removed from the store, and you will need some efforts to get them back online. What’s more, this will influence the customer loyalty of your store.

Customization Limitation - While doing dropshipping on Amazon, you cannot control anything about customization. Branding, UI, marketing, and other things related to customization are under Amazon control, so you have really limited permission to customize your products or stores.

No matter where you open your online store to do your dropshipping business, you can choose AliExpress to find reliable suppliers.

Why Is AliExpress Popular?

• It provides cheap but valuable dropshipping products for dropshippers, the price on it is affordable, and the quality is guaranteed. And there are many reliable suppliers on AliExpress, they are helpful for your dropshipping business.

• Dropshippers can browse different kinds of best-selling products on this marketplace. If you want to do dropshipping, but know little about how to choose a product to sell, these lists will give you inspirations.

If you are going to go on your online business following the dropshipping model, you can check more details in our What Is AliExpress article, to learn what AliExpress is and what it can provide for you.

The Best Dropshipping Tool to Help You Manage Your Orders - DSers

When you start your dropshipping business, you may become concerned about dealing with dropshipping orders, so you need to find a good dropshipping tool, such as DSers.

DSers is a free dropshipping tool with a lot of unique features, with DSers you could easily manage your orders. With DSers, you will reduce most of the work about inventory management, which helps you save time and money.  What’s more, you don’t need to worry about the costs of DSers since it is free, you can just use it. For more details about what is DSers, you can check in our What's in DSers?

So what DSers could offer for your dropshipping business? A lot of unique services, such as supplier optimizer, mass supply program, store management, order information automatic synchronization, 24/7 support service, and so on. You can check these services in DSers.

Last Word

The dropshipping business model appeals to a large number of sellers since it’s a good way to reduce risks of handling the inventory and it could reduce costs of operation. Through it, you might make profits with a low budget or even with no money.

Doing dropshipping on Amazon has benefits and limitations, And with the help of different marketplaces, such as AliExpress, you can find suppliers for your dropshipping business easily. Besides, multiple sales channels, such as Amazon, Shopify, and Wix are here to help you open your online store. Last but not least, some dropshipping tool – like DSers, can solve many problems you will be confronted to when dealing with orders, so you can free yourself from so much work. We hope these channels and tools are useful to you.

And after learning the 8 steps to start Amazon dropshipping, time to start your dropshipping business on Amazon with your great business idea now.