It all comes down to the following when it comes to
dropshipping on Amazon:
Should you spend your valuable time selling on Amazon and
risk generating good money for a short while?
Why not invest it in creating a long-lasting online store
that will make you money for years to come?
Which sound is
superior?
I\’ll discuss why dropshipping on Amazon might not be the
greatest platform for you to develop your e-commerce business on in this
article.
The Reality of Amazon Dropshipping
There are many various ways to drop ship, but Amazon
dropshipping is the one I\’m asked about the most. Let\’s look at some of the
advantages and disadvantages of selling on Amazon in order to assist you decide
whether you ought to use it for drop shipping.
Advantage: Huge
Audience
The flow of traffic to their store is a major worry for many
people. Traffic is, after all, the foundation of any ecommerce firm.
One of Amazon\’s biggest features is that it receives about
2.5 billion shopping-focused visitors each month.
Now, this does not imply that all of that traffic will
arrive at your doorstep. But it does imply that there is already a group of
buyers, which makes the opportunity hard to pass up.
The good thing is that Google PLAs have an even wider
audience, so if you follow my advice and create your own dropshipping store,
you\’ll have a large audience to promote to.
Keep in mind that you only target those who are likely to
make purchases using Google PLAs. Instead of only hope that the proper
customers see your drop ship Amazon business.
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Pro: Simple Setup and Free Hosting
Starting your own dropshipping business has many technical
challenges. Many people believe that having a stunning storefront requires them
to be web developers.
You don\’t have to register URLS, work with a hosting
provider, or perform a lot of back-end work on your website when you use
Amazon.
Instead, you simply list things on their website using their
process. People who hold to the misconception that you need to be an expert in
technology to produce something that sells and appears professional find it to
be much less intimidating.
Cons: Unsellable property
The fact that you are creating a sellable item is one of the
most exciting aspects of opening your own store. People who are unfamiliar with
eCommerce often ignore it. Once you start having some success, your store will
be worth something if you ever decide to sell it. Buyers are searching for
successful dropshipping stores, thus that explains why.
You don\’t have a sellable asset with Amazon. It resembles a
structure from a flea market where booths are purchased. You are merely a
vendor at the flea market; you do not own it.
If you\’re new to eCommerce, you might not realize how
important customer data is to expanding your company.
You may establish a deep connection with your audience
through data and emails, which you can then utilize to market new products. It
is known as a customer\’s Lifetime Value (LTV).
Because you don\’t have access to the client data when you
dropship from Amazon, there is no method for you to grow your business.
Now that they know which new niches are lucrative, Amazon
may use the customer data I described before to grow their own line into your
specialty.
This occurs more frequently than you might imagine,
effectively closing down your store for the night. Amazon can give a greater
price than you can since they control every aspect of the transaction.
Not to add that since it is their site, their product will
rank higher than yours.
Many suppliers won\’t want to link their brand with you
because of the flea market aspect of selling on Amazon. Instead, they will just
open their own store if they want to be present on Amazon. In general, there
isn\’t much to gain by working with you.
Your Store Could Suddenly Go Out of Business Suppliers May
Refuse to Work With You With those advantages and disadvantages out of the way,
let\’s talk about how to find things to sell on Amazon.
Let\’s begin by examining the three various ways that the
drop shipping business model allows you to earn money from practically anywhere
in the world.
Arbitrage
Arbitrage is the original and most popular method of drop
shipping on Amazon. This business concept essentially entails buying from one
location and selling to another.
In this case, especially when selling on Amazon, many people
attempt to obtain their goods from a retailer like Walmart. These drop shippers
look for things at bargain prices that fetch higher prices on Amazon! Walmart
would be the supplier in this instance.
Dropshipping on AliExpress
Using the Chinese online store AliExpress is another way to
drop ship.
Using this drop shipping strategy, you purchase goods from
Chinese manufacturers to deliver to clients all around the world. Drop shipping
from China could seem like a smart idea given the number of manufacturers
there.
The problematic part of this strategy is that the majority
of users utilize Oberlo, which is essentially a middleman app. And as you may
already be aware, I frequently observe novice drop shippers making the grave
error of hiring a middleman.
Local Dropship Vendors
Selling for suppliers in your home nation is the third drop
shipping strategy I want to cover. By using this technique, you can develop a
drop-shipping firm and work with domestic suppliers.
For instance, I was born and raised in the United States,
and both my businesses and the suppliers I work with are based there.
If you are drop shipping from Australia, you would seek for
Australian vendors to drop ship for. Domestic drop shipping operates in this
manner.
What Works for Dropshipping on
Amazon?
So, to answer your question, no, you don\’t need to use
Amazon with the drop shipping strategies listed above.
Here is a brief illustration of the purchasing process
because there are numerous distinct drop shipping tactics.
Say Sarah is the name of our client. She comes across your
ad while browsing the web and visits your Shopify store.
You have a few alternatives for order fulfillment after she
placed her order:
·
Arbitrage Model: You could order the item from
Amazon and have it delivered to Sarah.
·
Use a Middleman: Oberlo, which would be fulfilled
from a third party supplier, may be linked to your business (most likely
AliExpress).
·
Working with local suppliers, or those who are
based in the nation in which you are conducting business, is the final
alternative.
These are, once more, the key ways that the majority of
individuals really operate drop-shipping firms to employ as a fulfillment
method.
Let\’s use the identical example from previously to discuss
the arbitrage model. The question now is: Will this work? Yes, is the response.
One of the main issues, though, is that you have to
guarantee that these items are always in stock.
You are not collaborating with the supplier who is letting
you know how much inventory they have when your orders are rolling in on Amazon
and you have to fulfill them.
You visit a different website, make this purchase, and mail
the things to the Amazon client who made the purchase from you. Not to mention
that Wal-Mart will supply the packaging, which raises severe customer service
concerns.