Reezan

Posted on Jul 23

How to Dropship on Amazon Without Money

#dropshipping #amazon

If you're curious about dropshipping and are wondering how to kickstart a dropshipping venture on Amazon without any upfront investment, this article is here to guide you.

However, let's be real - launching an Amazon dropshipping business without any capital is quite unlikely. You'll need a modest amount of money or even a credit card to get your Amazon venture up and running.

But don't worry, your initial investment will be minimal. Soon enough, you'll be able to use the profits you earn to reinvest and expand your business.

Starting a Dropshipping Business on Amazon Without Spending a Dime: The Quick Guide

Here's a brief rundown of how you can kick off your dropshipping journey on Amazon without shelling out any cash:

Register for an Individual Seller Account on Amazon - it's free, but each sale will cost you $0.99.
Put in some elbow grease to research niches and items to discover the most profitable and popular products.
Hunt down a reliable supplier and list your products.
Boost your Amazon listing on social media or leverage free influencer marketing.
When a sale happens, buy the products on your customer's behalf (since Amazon takes a while to release the funds), using a credit card.
Once Amazon releases the funds, settle your credit card bill.

Please note: This method is quite time-consuming and slow-paced, but it's definitely doable. Your dropshipping business will grow slowly but surely.

In the rest of this article, I'll delve into both free and paid strategies to launch and expand your Amazon dropshipping business, helping you choose the path that suits you best.

What is Dropshipping?

Dropshipping is a business model that allows entrepreneurs to operate an e-commerce store without owning or managing inventory. In this model, the seller doesn't keep the products it sells in stock.

Instead, when a store sells a product, it purchases the item from a third party—usually a wholesaler or manufacturer—and has it shipped directly to the customer. As a result, the seller doesn't have to handle the product directly.

How Does Dropshipping Work?

Here's a step-by-step breakdown of the dropshipping process:

Seller signs an agreement with a dropshipper: The seller (you) enters into a partnership with a dropshipper—a supplier or manufacturer that agrees to fulfill orders on your behalf.
Customer places an order: A customer visits your online store and makes a purchase.
Seller forwards the order to the dropshipper: You forward the customer's order details to the dropshipper.
Dropshipper fulfills the order: The dropshipper packages the product and ships it directly to the customer.
Customer receives their product: The customer receives the product as if it was shipped directly from your store.

This model is attractive to entrepreneurs because it minimizes risk and investment while offering the potential for a broad range of products to sell.

Amazon Dropshipping Rules

Before you dive into dropshipping, it's crucial to understand Amazon's rules. If you don't, you might end up with a suspended Amazon seller account.

Here are some key points you need to remember for your online dropshipping business:

You must make sure that your name is on the outside packaging, packing slips, invoices, or any other information that comes with the products. There should be no mention of the manufacturer or the supplier.
If a customer wants to return something, it's up to you to handle it.
You must follow Amazon's Terms of Service according to the seller agreement.

For example, let's say you buy a product from another online store like Walmart or a Shopify store. If you have that store send the product to the customer with their branding or store information, Amazon might suspend your account. So, be careful!

Is Amazon Dropshipping Profitable?

Amazon dropshipping can be profitable. The average dropshipping margin is between 10% to 30%. Amazon takes around 15% off your top-line revenue. So if your margins are around 30%, that means you’ll have a new margin of 15% after selling a product via Amazon store dropshipping.

These margins can be higher if you win the Amazon Buy Box, but it’s highly competitive and shouldn’t be something you rely on long term.

How to Start Dropshipping on Amazon: Step by Step Guide:

1. Choose the Perfect Niche for Selling on Amazon

Choosing the perfect niche for selling on Amazon is crucial for your success. A niche is a smaller part of a broad market that focuses specifically on particular demographics, common interests, locations, or problems among the consumers. For example, in the electronics market, a niche could be portable mobile chargers or wireless earphones.

Why Niche Matters

For your Amazon business, it's important to look for a niche product. The competition in a niche market is not as intense as in a broader market. Furthermore, from a customer acquisition point of view, you will need to focus on acquiring a smaller segment of the population, making your efforts more targeted and efficient.

Tips to Find Your Best Amazon Niche Product

Avoid Seasonality: Choose a product that has a steady sales volume throughout the year. For instance, Bluetooth headphones are likely to have virtually constant demand throughout the year, unlike air conditioners which won't make many sales in winter.
Profit Margin: Ensure the product you choose has a good profit margin. Anything above 15% is a good margin to work with. Also, consider the price points. If you buy a product for $15 and sell it for $30, it gives you more room to accommodate other charges.
Competition: Perform a search on Amazon to understand the kind of competition you can expect for your product. If you find a lot of relevant results, then you may want to reconsider your choices. There is no point in entering a saturated market unless you have a product that can completely turn the game around.
Demand: Make sure that you will get regular orders for any product that you choose to sell on Amazon. Your products should bring you a loyal consumer base that you can rely on. There must be steady demand throughout the year so that you at least stand to make sales consistently.
Product Dimensions: From a logistical point of view, selling a product that is heavy and large can be a nightmare. Products that are small and lightweight are best to sell! They won’t cost a lot to ship and logistically speaking, they are easy to work with.
Explore Niche Communities: There are plenty of online forums and communities where you can get interesting niche market ideas for your Amazon business. Explore these communities and see if there is anything that strikes you as a potential business idea.

Remember, the ideal product would be small and light, have low to moderate competition, be priced between $15 to $50, allow you to earn 10 dollars per sale, and have daily orders of 10 units. By carefully considering these factors, you can find the perfect niche for selling on Amazon.

2. Find a Reliable Supplier for Dropshipping on Amazon

Finding a reliable supplier is a critical step in setting up a successful dropshipping business on Amazon. A good supplier is the foundation of your business and will help you find success. Here's how you can find the right one:

Develop Your Criteria

The first step is to develop your own criteria for selecting suppliers. Consider factors such as which markets they sell from and whether they have any additional services that would be beneficial. Make sure to do this step properly, so you don't make a bad choice for your business and need to start over.

Vet Suppliers Properly

Review and verify their shipping times and efficiency. By contacting them directly and ordering the product, you can easily tell how good they are and determine if the product quality meets your standards.

Use Marketplaces

There are three different wholesale markets to choose from: marketplaces, dropshippers, and niche wholesale suppliers. A marketplace is basically a platform where people sell products. You can use sites like Amazon and eBay to see how popular products are. Another popular way of seeing which products are selling is by doing a Google search.

Contact Suppliers Directly

Another way to research suppliers is to go to Alibaba and contact suppliers directly. Whether you already have a product in mind or you contact someone within a niche, you can gain invaluable information by communicating with suppliers.

Check Ratings and Reviews

Look at the ratings and reviews on many sites to properly vet suppliers. Another challenge that dropshippers may face is that certain suppliers don’t receive enough orders to have enough economies of scale to lower their costs.

These higher costs are passed on to dropshippers. It is therefore important to verify that your supplier has enough orders to have frequent and low-cost shipping.

Remember, one of the biggest challenges that dropshippers face is finding reliable suppliers. There are plenty of potential suppliers out there, but it can be difficult to find reputable and reliable companies to work with. Once you've done this, it might be time to start thinking about transitioning from dropshipping into carrying your own inventory.

3. Create an Amazon Seller Account

Creating an Amazon seller account is a straightforward process that opens up a world of opportunities for e-commerce entrepreneurs. Here's a step-by-step guide on how to do it:

Step 1: Decide Your Business Model

First, decide on the business model you want to use. Amazon offers several options:

Private Label: This involves rebranding a product that is already being manufactured under your own brand or label.
Wholesale: This involves purchasing low-cost or discounted goods in bulk to sell as individual units in a retail marketplace.
Online and/or Retail Arbitrage: This method involves finding low-cost or discount goods in retail stores or on e-commerce sites to resell them online.
Dropshipping: In this business model, an Amazon seller does not keep their own product inventory but instead transfers their customers' orders directly to the manufacturer or supplier.
Handmade: Amazon's handmade sellers are people who create their own products ("by hand") to sell on the Amazon marketplace. Examples include jewelry, accessories, home decor, and more.

Step 2: Choose Your Fulfillment Method

Next, choose your fulfillment method. You can choose between Fulfillment by Amazon (FBA) or Fulfillment by Merchant (FBM). Each method has its pros and cons, so consider which one will work best for your business.

Step 3: Consider Your Product(s)

If you have a product, you may be ready to go, but you should still validate that your product will have sufficient demand on Amazon. To help you find products to sell that are high in demand but low in competition, consider using a tool like Jungle Scout.

Step 4: Apply to Become an Amazon Seller

Once you've decided on your business model, fulfillment method, and product(s), you can apply to become an Amazon seller. More details on how to complete the Amazon seller registration process are in the next section.

Step 5: Start Sourcing Your Product(s)

If you've chosen to sell private label, you can find a manufacturer to create your product by using Jungle Scout's Supplier Database or Alibaba.

Step 6: Create Your Product Listing

Once you create your listing, you can grow your Amazon sales from there!

How to Register as an Amazon Seller

Go to https://sell.amazon.com.
Click on the "Pricing" tab and compare Amazon's selling plans.
Choose between an individual or professional seller account.
Enter your email and select 'Create a New Account'.
Choose your 'Business location' and 'Business type'.
Enter your personal information.
Enter your billing information.
Add the information for your product(s) and Amazon store.
Verify your identity by uploading images of your ID (license or passport) and a bank statement.

Once your identity and business information have been verified, you can log into https://sellercentral.amazon.com to start selling!

Remember, selling on Amazon involves some costs, such as Amazon referral fees, individual seller fee, FBA fees, and other potential fees. However, with careful planning and strategic decisions, you can successfully set up your Amazon seller account and start your e-commerce journey.

4. List Your Products on Amazon

Listing your products on Amazon is a crucial step in your journey as an Amazon seller. Here's a simple guide on how to do it:

Listing Products on Amazon: The Two Ways

There are two ways to list your products on Amazon:

Adding a product to an existing Amazon listing: If you're reselling products that already exist on Amazon, you don't need to create a new listing. Amazon doesn't want duplicate listings for the same product. If you're reselling other brands' products, your offer will be on the same listing as other sellers'.
Creating a brand-new Amazon listing: If you're selling a private label product or a product not yet on Amazon, you'll need to create a new listing. This process requires a few more steps.

How to Add a Product to an Existing Amazon Listing

If you're selling products through arbitrage, wholesale, or books, here's how to list your product for sale when the same product already exists on Amazon:

Get the ASIN of the product you want to sell: You can find the ASIN (Amazon Standard Identification Number) in the listing URL or under "Product details".
Go to Catalog, then click on "Add Products" in Seller Central and search for the ASIN.
Choose the condition of the item and click "Sell this product".
Create your offer: Enter your selling price (Standard Price) and item condition (Offering Condition Type), then choose between two options for your Fulfillment Channel: Merchant Fulfilled (FBM) or Fulfillment by Amazon (FBA). If you select Merchant Fulfilled, another option will prompt you to add the quantity. If you choose Fulfilled by Amazon, the prompt will redirect you to create an FBA shipment.

Your product will now be added to your "Manage Inventory" section in Seller Central. If you're using FBA as your fulfillment method, your listing will become active once Amazon receives your inventory.

How to Create a Brand-New Amazon Listing

If you're selling a product that is not yet listed on Amazon, here's how to list an item on Amazon:

Go to "Add a product" in Seller Central: Then click on "I'm adding a product not sold on Amazon".
Select your product category.
Enter your product information: In this next section, you will enter all of the information about your product, such as the Product Name (title), price, brand name, manufacturer, product ID, images, fulfillment, and so on.

Once you fill in all the necessary information about your product, click on "Save and finish". Now your product will be listed on Amazon!

How to Add Products via Upload

If you're uploading multiple products simultaneously, using a product spreadsheet is an excellent method. However, this method can be challenging, so only use it if you are proficient in spreadsheets.

Go to "Add products via upload" in Seller Central.
Follow the steps Amazon lays out: First, choose a template to get started. Next, choose the marketplace you need a spreadsheet for and download it.
Open your template in a spreadsheet program: Once you generate your template, open the file in Excel or Google Sheets. Find the instructions on how to fill out the template, definitions, examples, and the template to be filled out.
Fill out the template with your product information.
Upload your file to Amazon Seller Central: Once you fill in your spreadsheet, download the file and head back to Seller Central. Add your file, and Amazon will begin processing your spreadsheet. Uploading takes some time; Amazon allows you to enter your email address so you can receive a notification once your file upload is complete.

Adding products to Amazon Seller Central is easy once you know the steps! After following this guide, you should be an expert in adding products for sale no matter what business model you follow on Amazon.

5. Promote Your Products

Promoting your products is a crucial step to ensure they get the visibility they need to generate sales. Here are some strategies you can use:

Amazon PPC Ads

Amazon Pay-Per-Click (PPC) ads are a quick and simple way to start getting traffic to your product listings. With this approach, you create ads for your products, which will appear higher in Amazon search results than general listings for the keywords you set. However, this method does cost money.

Email Marketing

Email marketing is a powerful tool for promoting your products. You can send newsletters, product updates, or special offers directly to your customers' inboxes. This method requires building an email list, which can be done by offering a free product or discount in exchange for a customer's email address.

Blogging

Blogging is another great way to promote your products. You can create blog posts about your products, how to use them, or the benefits they offer. These posts can then be shared on social media or sent to your email list.

Social Media

Social media platforms like Facebook, Instagram, Twitter, and Pinterest are excellent places to promote your products. You can post photos, videos, and updates about your products, and engage with your followers to build a community around your brand.

Podcasting

Podcasting is a unique way to promote your products. You can create a podcast related to your product niche, where you can talk about your products, interview experts, or discuss topics of interest to your customers.

Remember, promoting your products without money requires building a large and engaged following. This can take time, but with consistent effort and quality content, you can generate interest in your products and boost sales.

Pros & Cons of Dropshipping on Amazon

Dropshipping on Amazon can be a lucrative business model if done correctly. However, like any business model, it comes with its own set of advantages and disadvantages. Here's a look at the pros and cons of dropshipping on Amazon.

Pros of Amazon Dropshipping

Zero Warehouse Costs: With dropshipping, you don't need to maintain a physical inventory, which means you don't have to worry about the costs associated with warehousing.
Large and Loyal Customer Base: Amazon has over 300 million active users, providing you with a vast audience for your products.
Diverse Product Categories: Amazon offers over 30 product categories, allowing you to experiment with different product niches.
Faster Deliveries, Better Customer Service: If you use Amazon's Fulfilled by Amazon (FBA) service, Amazon handles all returns and customer service requests. Plus, customers receive their packages faster due to Amazon's efficient delivery system.
Lower Costs: Since you don't have to maintain inventory or pay for warehouse space, your operating costs are significantly reduced.

Cons of Amazon Dropshipping

Greater Competition: The low barrier to entry for dropshipping means there's a lot of competition on Amazon. Other sellers may be selling the same products as you, which can make it harder to stand out.
Decreased Profit Margins: The competition on Amazon can lead to a "race to the bottom" in terms of pricing. If you have to lower your prices to stay competitive, your profit margins may suffer.
Slow Delivery Times: If you're sourcing products from overseas suppliers, it may take several weeks for products to reach your customers.
Elevated Customer Expectations: Customers expect fast and seamless delivery experiences, which can be challenging to provide if you're relying on third-party suppliers.
Zero Quality Control: Since the products are shipped directly from the supplier to the buyer, you have no control over the product quality. There's a risk that packages may get damaged during transit.

Remember, the success of your dropshipping business on Amazon will depend on various factors, including your product selection, supplier reliability, and marketing strategy. It's essential to weigh these pros and cons before deciding to start a dropshipping business on Amazon.

Tips to Be Successful Dropshipping on Amazon

Succeeding in dropshipping on Amazon requires strategic planning, patience, and hard work. Here are some tips to help you succeed:

Choose the Right Products

Your choice of products can make or break your dropshipping business. Research the market to identify products that are in high demand but have low competition. Tools like Jungle Scout can help you find such products.

Find Reliable Suppliers

A reliable supplier is crucial to your dropshipping business. They should be able to deliver high-quality products on time. Research potential suppliers thoroughly, check their reviews, and consider ordering samples to check the product quality.

Optimize Your Product Listings

Your product listings should be optimized for Amazon's search algorithm. Use relevant keywords in your product titles, descriptions, and backend keywords. High-quality images and informative product descriptions can also help boost your listings' visibility.

Provide Excellent Customer Service

Customer service is key to building trust and loyalty with your customers. Respond to customer inquiries promptly and professionally. Handle returns and refunds smoothly to ensure customer satisfaction.

Monitor Your Competitors

Keep an eye on what your competitors are doing. Monitor their pricing strategies, product offerings, and customer reviews. This can help you stay competitive and identify opportunities for improvement.

Use Amazon's Fulfillment Services

Consider using Amazon's Fulfillment by Amazon (FBA) service. With FBA, Amazon handles storage, packaging, and shipping on your behalf. This can save you time and ensure a smooth delivery experience for your customers.

Stay Compliant with Amazon's Policies

Amazon has strict policies for dropshipping. Ensure you understand and comply with these policies to avoid account suspension.

Remember, success in dropshipping doesn't happen overnight. It requires consistent effort, continuous learning, and adaptation to market trends. With the right approach, you can build a successful dropshipping business on Amazon.

Conclusion: How to Dropship on Amazon Without Money

Dropshipping on Amazon can be a profitable venture, even if you're starting without a significant investment. This business model allows you to sell a wide range of products without having to worry about inventory, storage, or shipping. However, it's not without its challenges. From choosing the right products and suppliers to optimizing your product listings and providing excellent customer service, each step requires careful planning and execution.

Remember, the key to success in dropshipping lies in understanding the market, staying compliant with Amazon's policies, and continuously improving your strategies based on customer feedback and market trends. It's also crucial to promote your products effectively, whether through Amazon PPC ads, email marketing, blogging, or social media.

While the journey may seem daunting, the potential rewards are worth it. With patience, persistence, and the right strategies, you can build a successful dropshipping business on Amazon without a significant upfront investment. So, take that first step, learn as you go, and watch your e-commerce dreams come to life.