• Craig Gedey

A Guide to Profitable Drop Shipping on Amazon in 2020

Updated: May 30

This Amazon guide to drop shipping will cover the following questions:

  • What is drop shipping on Amazon?

  • Does Amazon allow drop shipping?

  • So how do I start drop shipping on Amazon?

  • How do I go about drop shipping on Amazon?

  • What to do if you made a drop shipping mistake and your Amazon account is suspended?

Amazon Drop Shipping Guide 2020

What is drop shipping on Amazon?


Drop shipping on Amazon is when you allow a third party - your supplier - to fulfil orders to customers on your behalf.


Fundamentally, drop shipping is when you use the manufacturer or wholesaler of your product to ship it to the customer. The main benefit to you is that you don’t need an inventory to speak of, it belongs to the supplier. You simply need to list the product and then liaise with your supplier to make sure it gets to the customer safely.


A spin-off benefit of that is that you switch between markets relatively quickly and easily. Because you’re not acting as a supplier yourself, your financial responsibility is less, and if you seen an opportunity in another market then you’re able to move quickly.


Does Amazon allow drop shipping?


Gedey explained: “I often hear a lot of worries and concerns about drop shipping. Is drop shipping allowed on Amazon? Is drop shipping legal? The short answer to both questions is yes, and it is a process that can work well for Sellers if used properly.


To answer this question we will look at Amazon drop shipping Policy in the UK, the full page can be found here.

Amazons Drop Shipping Policy


Drop shipping, or allowing a third party to fulfil orders to customers on your behalf, is generally acceptable. If you intend to fulfil orders using a drop shipper you must always:

  • be the seller of record of your products;

  • identify yourself as the seller of your products on all package slips and other information included or provided in connection with them;

  • be responsible for accepting and processing customer returns of your products; and

  • comply with all other terms of your seller agreement and applicable Amazon policies.

Examples of drop shipping that are not permitted:


  • purchasing products from another online retailer and having that retailer shipping directly to customers; or

  • shipping orders with packing slips, invoices or other information indicating a seller name or contact information other than your own.

Failure to comply with these requirements may result in the suspension or removal of your selling privileges.


Now we know Amazons drop shipping policy and what we can and can not do when drop shipping on Amazon.


So how do I start drop shipping on Amazon?


Craig Gedey, the managing partner of Thompson and Holt, has direct experience of using drop shipping on Amazon and believes it can be beneficial to Amazon Sellers if used correctly.



In our experience there are two types of Amazon drop shippers. The first type list every product they can find and hope for the best and the second type specifically research products in niche markets. Both have their benefits and risks.


We find that the Sellers who list every product they can find are usually the ones with the most issues on their accounts and sometimes have their listings and products suspended. The main reasons for the suspension is that they list products that they do not have permission to sell and end up with an invoice request from Amazon and list products that are prohibited. The first type of Amazon drop shipper should take a look at our High Risk Brands - What not to sell on Amazon, this is a list of brands to stay away from because they often lead to a suspension.


The second niche drop shipper we tend to only speak to these Sellers when they want help with listings to increase their sales.


Many of the first type of drop shippers utilise Thompson and Holts Monitor and Protect service as they regularly receive complaints that need addressing. Thompson and Holts team take the hassle out of dealing with the suspensions and requests for information. The software also prevents suspensions providing the drop shippers take notice and act on the alerts.


How do I go about drop shipping on Amazon?


First you need to identify a supplier that is willing to ship directly to the buyer. Then you create product listings as you would do normally on Amazon, when you make a sale collect the money (covering both retails and shipping costs), and then distribute your agreed fee to the supplier. Then then take over the responsibility for ensuring the product reaches the customer safely and on time.


“It’s fair to say that drop shipping on Amazon isn’t for everybody. But if you can make it work for you and your business it can be a highly effective way to sell on Amazon. You don’t have to store and keep track of your product, with all the associated costs that come with that. You basically just have to worry about your listings and the fees of the supplier.


“That can allow you to spend more time focusing on the marketing and promotion of your product, and selling a greater number of units. You can also list a wider range of products without worrying about needing the space to store them.


“There are disadvantages too. Your margins will be smaller because of the fees paid to your supplier. And there is a sizeable part of your business now outside of your control and responsibility - so you need to work with trustworthy and reliable wholesalers. Communication with them will be absolutely key.


“But if you find the right ones, then drop shipping is undoubtedly a way to successfully sell on Amazon.”


What to do if you made a drop shipping mistake and your Amazon account is suspended?


Amazon Drop Shipping Suspension Appeal

If you have found yourself suspended while drop shipping on Amazon, contact Thompson and Holt for a free LiveChat to get your Amazon drop shipping business back online as quickly as possible. We will help write a Amazon appeal that addresses Amazons concerns.

THOMPSON & HOLT® - Amazon Appeal Experts. Suspended Amazon Seller Account Appeal Consultants. Amazon Specialists. 

 

We are an independent Amazon Specialist firm based in Manchester, United Kingdom which was established in 2014. Over the years Thompson and Holt® has grown to become one of the UK’s leading Consultants in Amazon Seller Suspensions.

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Thompson and Holt® is a Limited Company registered in England and Wales under registration number 10457529. Data Protection Number ZA247254. VAT Registration No. 285838156. All Prices include VAT

 

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*There is no guarantee that your Amazon Seller Account will be reinstated and results can vary. No company can guarantee that your account will be reinstated. These figures do not include Sellers who did not follow advice.

 

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