Dropshipping on Amazon: Everything You Need to Know in 2020

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It is likely, especially if you are starting to dropship, that you have ever considered dropshipping on Amazon.

Although this sales channel may not be as popular as others when it comes to dropshipping, it is indisputable that its great success and global implementation make dropshipping with Amazon an alternative to consider.

For that reason, for more than 2 years, Shopify online store owners have been able to sell on Amazon, as this sales channel is fully integrated into the Shopify platform.

If you want to know how to dropship on Amazon, pay attention to this guide in which you will learn everything you need to be successful in the marketplace par excellence in the year 2020.

The dropshipping model on Amazon

Dropshipping on Amazon has two different modalities that you should know, because the implications of both formats are different:

  • Dropshipping by FBA: This acronym stands for Fulfillment by Amazon. This form of dropshipping consists of your dropshipping provider sending the merchandise to the Amazon fulfillment center, so that Amazon’s own warehouse is responsible for shipping it, managing refunds, processing returns and providing direct customer service.
  • Conventional dropshipping: Amazon acts as one more marketing channel: it facilitates sales thanks to its huge commercial structure and SEO positioning. When the sale takes place, your supplier can ship the product directly to the customer or can send it to you so that you can take care of the final shipment.

Main advantages of dropshipping on Amazon

If you are not very clear about the main benefits and advantages of dropshipping with Amazon in Spain, below you will find a list of arguments in favor of this sales channel.

  1. There are no storage costs
    As is usual in the world of dropshipping, dropshipping with Amazon will allow you to sell without stock.

It doesn’t matter if you opt for the FBA option or the conventional one. In both cases, it will be Amazon or your wholesaler who is responsible for storing the products.

Since you don’t have to have a warehouse full of merchandise, your costs are significantly reduced and order management is greatly simplified.

  1. You can access a much larger audience
    The good thing about dropshipping with Amazon is that you can benefit from its huge commercial structure.

With more than 244 million active users, Amazon has access to a huge number of potential customers who regularly enter its marketplace to make their purchases. And you can benefit from that spectacular audience — much larger than the one provided by the social networks that you should use in your business — by using Amazon as one more sales channel.

If you do things right – if you select the products with the highest demand and define a price strategy accordingly – you can earn a lot of money, since Amazon will give you the opportunity to show your products to a huge number of potential buyers.

  1. You don’t need to invest so much in advertising
    One way to generate traffic to your dropshipping store is by hiring advertising on social networks.

But if you become a seller on Amazon, you will be able to pay for ads within Amazon’s own platform. In this way, you will increase your sales and build your positive reputation (something basic to improve the organic positioning of your products within the platform).

And not only that: you can also save money on Facebook advertising because organic positioning on Amazon will generate a lot of free traffic from customers interested in buying your products.

  1. You can test many products with almost no risk
    With no stock, it is much easier to know if you have succeeded in your dropshipping niche, since if things do not go well you will not have a lot of items that you have paid for in advance.

In addition, the potential of Amazon allows you to test before a huge audience, so you need less time to do the test than if you did the test directly in your own store.

  1. You will benefit from the great reputation of Amazon
    People have become used to the service offered by Amazon and many customers, when they have to buy something, have a habit of accessing Amazon first.

All this makes customers fully trust Amazon. And if you dropship on Amazon, you can benefit from that trust, since customers will think they are buying directly from Amazon.

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