Amazon dropshipping is a popular business model, yet still misunderstood by some. Here’s why it isn’t as easy and profitable as it’s made out to be and what it takes to succeed long-term.
Inventory can be purchased before it has sold and stocked for future orders or after it has sold and dropshipped for current orders. Amazon dropshipping means high transaction volume, intense competition and low profit margins. BUT – there is a way to make it work.
Amazon dropshipping involves:
- Listing your supplier’s products for sale
- Receiving an order from a customer
- Sending the order to your supplier
- Having your supplier ship the product directly to your customer
You never see or touch the product.
While Amazon dropshipping may seem like the perfect business model, two things are working against you from the start.
First, it’s difficult to generate the monthly sales volume required to get discounts from suppliers. For starters, you will need to buy products at list price. Then you will need to compete with other sellers who are offering the same products at the same or lower prices.
Second, the age-old relationship between risk and reward is at play. The supplier carries the most risk because they carry the inventory and tie up their capital. Because of this, the supplier reaps most of the reward or profit margin and you are left with a smaller piece of the pie.
Here’s how it plays out in reality: despite getting wholesale pricing, your product costs are the same as many other sellers – if not more. Plus, suppliers charge a per-order fee ranging from $2 to $10 for storage, shipping and handling. This puts many dropshippers in similar uncompetitive and close to unprofitable positions.
A few Amazon dropshippers, however, have turned this highly competitive, low-margin model into lucrative 6-7 figure per month businesses that practically run by themselves!
Their secret: automation and scale.
You’re about to discover just what it takes from an operations standpoint, to go from a handful of SKUs to a hands-free dropshipping empire. From connecting with suppliers and publishing inventory … to repricing products and supporting customers … you’ll discover how to leverage integration and automation to drive up sales and purchasing volume – and drive down costs!
If you’re new to Amazon dropshipping, this guide is for you. You’ll find out why it’s such a competitive model. You’ll see how to start your search for suppliers and products. You’ll find out what you do and don’t have to do on a daily basis. You’ll learn the rules that Amazon and other marketplaces expect you to play by.
If you have an existing Amazon dropshipping business but are finding it difficult to manage and grow, this guide is also for you. You’ll discover the barriers preventing you from reaching the next level and how to remove them. Achieving Amazon-like efficiency and watching your dropshipping business grow as its dependence on you shrinks is a realistic possibility. To find out how to do this – a feat very few Amazon dropshippers can say they’ve accomplished – all you have to do is read: Amazon Dropshipping: The Secret to Success.