Dropshipping Business on Amazon or How to Improve Sales in 2023
Kateryna Tytarenko, SEO specialts in Multi-Programming Solutions • 8 mins 33 secs
Interested in how to level up your e-commerce business in 2023? You can practice with the POD or direct-to-customer sales. Both variants can lead you to a new round in your entrepreneur prosperity, despite the significant difference between dropshipping and print on demand. Here we will talk about direct trades. This Amazon dropshipping guide will give you some ideas on entering a larger market, increasing active sales, and experimenting with various goods.
How does Amazon's dropshipping business work? Sellers accept buyers’ orders from their online store and redirect them to the manufacturer, who then forms and sends the package to the final customer. By acting as an intermediary in this transaction, the merchant receives the margin without spending time on logistics and pays more attention to successful marketing.
So let’s figure out how dropshipping with Amazon through Shopify can bring you additional benefits and facilitate business management with innovative technologies.
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A brief look at Amazon sales statistics
Let’s help you make the right choice in determining your business development path by providing some Amazon online sales statistics. More and more people connected with e-commerce are involved in dropshipping trade, and that's why:
- Online sales are on the rise. Over the past 7 years, the number of purchases made in online stores has doubled. So, more than 2.14 million buyers in 2022 prefer online shopping. After all, this kind of purchasing does not waste clients’ time and is available 24/7 from your mobile phone. The buyer receives goods directly to the doorstep, and the drop shipper earns income without maintaining inventory costs.
- About ¼ of the merchandise is sold online with the dropshipping scheme. It indicates the popularity of this trading type and its benefits for all participants.
- About 27% of e-commerce owners are using a dropshipping business plan. It is more profitable for product suppliers to work with direct-to-customer vends. They would lose 18% of the profits by trading on their own.
Considering how to set up a dropshipping business on Amazon with increased competition can be a wise decision. This way, merchants will expand their brand influence and manage sales channels and product mix.
To understand the platform's capabilities better, we decided to go even deeper into the numbers. So, let's take a closer look at the Amazon sales statistics:
- The platform has offices in 180 countries allowing merchants to offer their items to 300 million audiences in different parts of the world.
- About 1.9 million SMBs are enlisting Amazon's support to grow their profit.
- Third-party sellers grew their dropshipping profit margin by 50% in 2021, using Amazon as an additional sales channel.
- More than half of purchases are completed on the platform within 15 minutes. And almost 28% of all online deals are concluded in less than 3 minutes.
- 180 million US users visit the Amazon site monthly using a smartphone, and 42 million use desktops to make online purchases.
Is Amazon dropshipping profitable? The increasing number of sales shows that vendors can raise their business on it. In addition to the obvious numbers, trading on Amazon allows store owners to experiment with new types of products and use cross-platform advertising, various services, and tools to optimize sales. Also, Amazon's seller rating is an important indicator that attracts buyers. We will learn about the ways of its formation and its influence on the Amazon platform to give you more useful context for thinking.
What is seller rating, and why is it so important
Even if you've developed a profitable dropshipping business through your own Shopify store, take care of your Amazon rankings for its successful usage as an additional marketing channel.
Are there any ways to increase seller ratings on Amazon? First, you need to make several sales through the market. Your buyers’ reviews over the past 12 months will form your Amazon vendor reputation. For your enterprise's continued success, it is worth maintaining a 95-98% rating.
It is important to understand the difference between your products’ reviews and the seller rating. It makes up the overall customer transaction experience, including your communication’s friendliness with clients, logistics, and other factors. However, selling low-quality stuff can result in negative points for you as an Amazon merchant.
Sometimes the best decisions to scale your business come too late - but that’s only when you don’t understand the merits and privileges of the decisions you make. Here are two main benefits of having a good seller rating on Amazon:
- Increases your store’s competitiveness - you can win The Buy Box by having a higher ranking among traders of the same stuff. Thus, you’ll get the chance to appear in organic links. This means that clients will view your product more often than other sellers.
- Increases customer confidence - any buyer is more willing to make a deal with a merchant without negative reviews and many reputation stars.
So, here lies the answer on how to make money dropshipping on Amazon. By positively presenting your online shop to Amazon's multi-million audience, you will attract people from all over the world and offer other convenient sales channels, taking into account the client’s preferences: Shopify, Telegram, Facebook, etc. Online marketing tools usage can greatly contribute to your knowledge of advertising and anticipating customer desires.
When starting a dropshipping business on Amazon, make sure you know all the rules set by the marketplace:
- the sellers must register themselves as the products’ owners;
- all documents, invoices, and packaging sent along with the goods must contain information only about the trader (and not the manufacturer);
- there is a responsibility for the refusal and returning procedure.
As an alternative dropshipping option, the marketplace suggests the Fulfilled by Amazon (FBA) program for merchants. You can send the goods to the Amazon warehouse under the offer’s terms. The trading platform performs all further packaging and shipping treatments after receiving orders from your customers.
Useful Amazon dropshipping tools can assist you in automating sales flows and getting rid of your e-commerce business routine. Let's get to know them in more detail.
Best Amazon Dropshipping Tools
Wonder how not to get lost in orders from your store and manage it efficiently without wasting time? These top Amazon dropshipping tools are designed to make the seller’s life easier.
Order management will become easier with this Amazon dropshipping app. Merchants will process purchases, control inventory, and edit product photos directly from their mobile gadgets. The sales market covered by Shipstation includes the USA, Australia, UK, and Western Europe - you can rely on your order's shipment on global carriers like FedEx, DHL, UPS, etc.
The utility will enable you to import all the client’s data and provide parcels with your branded labels. In the latter case, use the Amazon Buy Shipping API. After integrating Shipstation with the seller account, select Carrier Account in the program settings, connect to Amazon Buy Shipping, and follow the further setup instructions.
The software product will help you to facilitate multi-channel inventory. You can link with online stores like Shopify, Amazon, Etsy, and others. Shiphero will automatically send orders for packaging and shipping according to the provided customer details. Integration with the program will give an opportunity to monitor warehouse stocks online and generate reports on deliveries’ statuses.
Shiphero can create custom invoice templates and labels for your online store. Connect your profile to Amazon by simply clicking the “Add store” button in the menu. By pressing “Connect” you will Log in and get the new API. Here you are: your integration with the Amazon dropshipping tool is finished.
The automation software helps sellers to streamline their operations and release from routine work. The program integrates with the store on the Shopify platform, providing the site owner with access to tools for managing dropshipping.
How to dropship Amazon products on Shopify? DropZa will allow you to combine information flows from your online store, send them to Amazon S3 for further fulfillment, and observe stock balances. DropZa also integrates with ShipHero / ShipStation, providing documentary support for orders under your label.
If you are wondering how to dropship on Amazon without money, we hasten to reassure you that you don’t have to invest a lot. Buying products from the supplier occurs after the consumer pays for his goods. So you will operate with the client's finances. Later you can spend your profit on business optimization, like dropshipping software purchases.
How do I work simultaneously on both Shopify and Amazon?
If you doubt whether it is possible to combine Shopify dropshipping using Amazon successfully, we will answer: not only possible but also necessary. Multi-channel integration of your online stores will increase sales, explore new markets, and attract buyers worldwide. As a business owner, you can make an online Shopify store and an Amazon account and list your goods on both sites.
In this case, the correct question would be: how to control the goods inventory? Shopify and Amazon distribution channels can be easily combined by consolidating order and inventory information. Now you can avoid the situation when a customer pays for an out-of-stock item. In order to set up your Amazon account on Shopify, link it to the online shop settings.
Add your Amazon profile to “Sales Channels”. Now you can manage the quantity of a product listed on both platforms from the same Shopify interface. Amazon dropshipping product research tool will give you hints on popular goods to hold your sales in trend.
If you've already decided to implement omnichannel marketing, let's break down what benefits a seller gets by managing Shopify dropshipping with Amazon:
- Sales growth. With 300 million potential customers, you will expand your list of buyers beyond the country's borders by making international deliveries.
- Increasing awareness. You can popularize your brand all over the world and grow the target audience’s influx.
- Shopify store management will help to add personality to your product. You can also do print on demand business on Amazon, using the market’s traffic to advertise your stuff.
- Business automation and profits top-up. Multiple sales channels used in conjunction with optimization software (described above) will reduce the time to perform routine tasks and let concentrate on business development and bypass competitors.
It is worth reading the list of products that are forbidden to sell on Amazon, so it does not come as an unpleasant surprise for you. When creating a marketplace account, you need to select the stuff categories you are going to trade in your listings. They will be validated as per Amazon requirements. Look through the Amazon sales statistics by-product to make the right decision.
Dropshipping service on Amazon is not free. The commission compiles 10-15% depending on the goods’ type. The seller can choose to pay per item sold or a monthly fee, which is advantageous for high volume vends. So is Amazon dropshipping worth it? Well, marketplace maintenance costs can be a drop in the ocean, as the marginal return on sales can be 15-20%.
Does Amazon allow dropshipping? Yes, direct sales on this marketplace are real and can be a great option for aspiring entrepreneurs and merchant sharks. By dropshipping with Amazon through Shopify, you will increase your brand awareness and reach new markets. A special Fulfilled by Amazon program will take responsibility for your stuff storage and all arrangements implemented for their delivery to the final buyer. Amazon's international warehouses, together with shipping companies, will transfer your goods to the buyer's location, even to the other side of the planet.
You will gain the power to dropship Amazon items using Shopify with your company logo on the parcels, heading the process directly from your mobile phone. Integrated dropshipping software can free you from the routine tasks of purchasing processing, price updating, and inventory analysis. All you need to do is to monitor reports on growing incomes and bring new business ideas to life.