Selling goods on Amazon is a great way to make money but it tends to have one drawback – it can mean very low profit margins if sellers have to hold inventory and pay for shipping. That is why Amazon has come up with dropshipping. It is a process where the manufacturer is responsible for all the shipping and inventory costs and all you have to do as a seller is find buyers – the manufacturer will ship the item and all manufacturing and inventory costs are theirs to take care of.
Dropshipping comes with several benefits. The first is higher profit margins – taking away shipping and inventory costs means that you get to walk away with more money. The other benefit is that you don’t need any specialized skill or knowledge to dropship anyone can do it so long as they have an internet connection and money to buy items from a manufacturer. All you need to do is register and you are good to go. Dropshipping provides sellers an excellent way to test products – since they don’t have to hold inventory they can buy a few products at a time to see how fast they sell and which ones have the best margins. You can test 3 or 4 products at a time and test them to see which ones make you the most money in the shortest time. The last benefit of dropshipping is that you don’t need a lot of capital to get started – you only order a product when you have a ready customer.
The process of Dropshipping is easy – just 4 steps and you are done.
Step 1 – Create a seller account on Amazon
For you to be able to sell on Amazon you need to have an account. There are two kinds of accounts that are available – personal and professional. Since you are a beginner it is best to go with personal – you only fees on items that you sell through Amazon. If you choose a professional account you will be required to pay an additional $40 a month.
Step 2 – Find Dropshipping suppliers
There are websites that are set up for just this – they seek out manufacturers and list items on their site so that those who are interested in Dropshipping can buy directly from them. Good examples are Shopify, which recently made a deal with Amazon, and Salehoo. Here you will find items listed at very low cost, which allows you to make good profit margins.
Step 3 – Locate the right items
The third step is to find items to sell. Look through the websites to see which ones sell fast with high profit margins. There are many items that have profit margins of 100% and more.
Step 4 – List on Amazon
Now it is time for you to list your item on Amazon. There are certain ways that you can list so that your items can rank better. Make sure that you use long-tail keywords. You should also have a very clear refund policy (if you ever need to refund make sure to make it easy for the customer in order to build trust). You want to have a few reviews of the item so you can ask friends or family to buy the product and write a review.
You are done – now all you have to do is sit back and wait for an order. As soon as it comes the manufacturer will ship the item directly to the buyer so you will not come in contact with it at any point during the transaction.