Effect of Drop Shipping on Amazon Seller
Effect of Dropshipping on Amazon.com
Amazon always keeps on trying to give more perks to sellers as well as buyers. In previous years, Amazon has brought a new way of selling for its sellers. Yes...We are talking about Dropshipping. Dropshipping has now become a buzzword on Amazon. The sellers are showing more interest in selling through dropshipping. Since it is now on Amazon, many sellers want to know more about this hot topic. If you too are one of them and thinking to sell through dropshipping, this guide is for you to know the key points of dropshipping.
What does this buzzword dropshipping mean??
Dropshipping is the process in which sellers directly sell the products from manufacturers or brand owners without handling any inventory & shipping responsibilities. The manufacturer itself handles the inventory and shipping process for the goods that are being bought by the buyers. The dropshipper sellers just sell the products on behalf of a manufacturer and earn a profit with the packing slip of their own. The sellers can also sell the products from local manufacturers through arbitrage.
Concisely, dropshipping is the process in which sellers drop down the shipping process from their end. They don’t bother about shipping the products. The only things they get concerned are-what to sell and from where to sell. The product manufacturer is all that handles the manufacturing of products, managing inventory and also the shipping of goods. Wao….What a great deal for dropshippers!
Why sellers are moving to dropshipping???
Most of the sellers from every marketplace are now moving to become dropshippers. About 84% of sellers think that going with dropshipping is a good way to set an online business. The branded products are more attractive and people easily get magnetized towards branded products thus sellers don’t need to publicize more about the products. They only need to make them visible for the buyers, rest will the brand and tag do.
Let’s have a look at the factors that are driving sellers to become dropshippers of these products.
Allows smooth starting: The dropshipping business is easy to start. Within a day, you can set up your store by choosing the products you want to sell and earn the profit. Product images and product details can easily be imported from the manufacturer. The only work you need to do is promote the products so that buyers can visit you and click on the buy button for your products. Rest all are the responsibilities of the manufacturer.
No Inventory to Manage: The best thing that sellers like about dropshipping is that they don’t need to handle and manage the inventory. Dropshipping takes all the worries of the sellers to fill the inventory, check the available stock and refill when the stock is ending. The burden of inventory management has been taken by the manufacturer. The dropshippers only take care of the clicks that buyers are making to purchase the products.
Money saver: with no inventory and shipping responsibilities, sellers don’t need to spend on the warehouses to stock their products. No money for stocking as well as for shipping and logistics. This saves the extra investments that sellers do while stocking the products either in their warehouses or in Amazon inventory. The shipping costs are not applicable to the seller end. Also, in Dropshipping, sellers only buy the products when the customer orders. Thus it saves money on inventory management and fulfillment costs.
How specifically dropshipping is impacting the Amazon seller??
With the growing response of customers for Amazon, the sellers would have definitely realized the impact of Amazon on the online marketplaces. Thus the Amazon platform has not only been the first choice of the buyers but of the sellers too. The sellers are adopting new ways to sell on Amazon with the Amazon guidelines and marketing strategies. In the same context, dropshipping is the new trend of Amazon that sellers have been adopting.
1. Amazon gets about $14.2 million orders from dropshipping and this figure is increasing year by year.
2. Amazon also allows dropshipping on other marketplaces like Shopify, eBay, etc. This attracts more Amazon sellers to adopt Dropshipping. Once they put their products in Amazon’s inventory, they can fulfill the customer’s order from omnichannel through Amazon FBA (Multichannel Fulfillment). This helps in adding more sales on their Amazon store.
3. More sales through dropshipping help the sellers to win the Buy Box. No need to say what does this buy box meant to the Amazon sellers.
4. Sellers can set the price for their products themselves. They need to pay only to the manufacturers for their products and shipping costs that too from the charges that they take from the buyers.
5. The sellers get the products at the wholesale prices as they directly buy from manufacturers and on this price they set their own price with their profit added. But this doesn’t mean that you can set a high price for your products because higher prices would lower the customer’s buying decisions.
How much does the dropshipping cost??
Selling through dropshipping is a low budgeted business. The sellers only buy the goods and items when they receive the order from buyers. Thus no money wasting on stockpiling. Next, no warehouse to manage inventory and no shipping expenses. No expenses on hiring the management team for shipping and inventory. The only but profitable expense you do while dropshipping is to invest in advertising, promoting and maintaining the Amazon store. Invest to drive traffic and remaining is the coordination between the services of you and suppliers.
How can you sell your products through dropshipping on Amazon.com??
1. Sellers need to coordinate with their suppliers and manufacturers.
2. Create a list on Amazon to display the products to your store. Listing of these products is the same as the traditional listing on Amazon. For the listing, read A comprehensive guide on listing your products on Amazon.com.
3. Promote and advertise to enhance the visibility of your products.
4. In any issue, take assistance from Amazon service provider.
If you think to sell and complete orders through dropshipping, you need to:
1. Acknowledge yourself on the product packings and interact with customers for their orders.
2. Be responsible for customers buying and returning items.
3. Avail the quick service from the suppliers to the customers as customers want their orders right off the bat. More time in shipping would decrease the customer’s attention from your store.
4. Follow the Amazon guidelines and Amazon dropshipping policies of Seller agreement.
Dropshipping has emerged as a new and quick way to boost the drive rates of sellers. As sellers don’t need to invest money and time for inventory and shipping management, they can focus on promoting, advertising and campaigning for their products. The sellers who have good marketing skills can hook up more customers to their store. This drives sales and clicks conversions which may lead to winning the buy box. About 95% of sales are the result of the right advertisements and promotions. The dropshipping gives you sufficient time to focus on your marketing strategies. The dropshippers only need to manage the customer’s orders and forward them to the manufacturers and suppliers. The sellers with dropshipping only need to maintain a good relationship with the buyers and suppliers.
Amazon welcomes all its sellers. If you don’t want to sell with dropshipping, you still would be the Amazon seller. Sell as you want, manage your inventory and earn profit from Amazon platform.