Why I'll Never Do Amazon Dropshipping

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What Do I Mean by Amazon Dropshipping?

Dropshipping is seen as a genius way to make money through ecommerce. eBay is absolutely flooded with dropshipped listings, with thousands taking advantage of the fact that shoppers aren’t thorough enough with their price checking. More courageous sellers decide to do this on Amazon instead. Again, there’s lots of money to do made by doing this.

The concept is simple – you find a product that you know sells well, you make a listing for it on Amazon at a price that would give you a profit. Once it sells, buy it from the other site and get it shipped to your customer.

It’s simple and it works. It’s heavily frowned upon, but people always hate on online sellers, so what’s new? If you think that you can make it work for you, that’s up to you. However, I’m going to make it completely clear that it’s not something I would consider doing. You’ll probably get some value by reading my reasons why.

Why I Won’t Dropship with Amazon

As someone with a few years of Amazon FBA experience, I’ve learned just how strict the marketplace is. Unlike when I sold most of my stock on eBay, Amazon seems to constantly email its sellers with guidance, warnings and information about how you must conduct yourself on their platform. Step out of line and they have no problems suspending you and making sure you can’t return to sell there again.

Amazon accepts dropshipping in the way it’s actually made for. Some wholesalers allow its customers to sell their products on their behalf, and then they’ll send the products out to the end users. In those instances, agreements have been made between the wholesaler and their customer to do this. It’s a lot more commonplace than people are aware.

The form that dropshippers usually take is by purchasing from other online retailers, and then getting it delivered to customers. Think about your last online purchase and the problems that may come along with this.

You may:

Expect tracking information (but often won’t be able to)
Receive goods in highly branded packaging (raising suspicions of buyer)
Receive your product late (posing further risks to your Amazon account)
Get an invoice enclosed with the actual purchase price (not the price you paid)

Dropshippers will tell you that it’s incredibly rare for customers to look at the invoices enclosed in their product’s packaging, yet that risk is still a real one. If a customer discovers it and sees that the price is lower than what they paid for it, there’s always the potential chance that they would want to get you removed from Amazon.

In order for Amazon dropshippers to make significant profit, they need to sell a lot of goods – so often need a lot of listings. Amazon can’t ban dropshippers but they have put measures in place to make it more difficult for sellers to list more products than they could feasibly have in stock. It means that if people do dropship, they either have to find a handful of products that sell extremely well or play the long game. The fact that Amazon is doing this means you need to be careful if you’re going to consider it as an option at all.

I don’t know about anyone else, but I wouldn’t like to put my selling privileges at risk by doing something that they don’t want sellers to do.

What are the Alternatives?

For those that want to sell goods online with the potential for making thousands in revenue each month, online arbitrage is your best bet. It’s the method that contributed most to me being able to quit work and it doesn’t take long to see your initial stock turn into significant profit (which you can reinvest time and time again).

For those that really don’t want to have to touch any stock whatsoever in any part of the process then print-on-demand is probably a better option. You’re going to need some creativity to get things rolling, but it’s something that you can eventually outsource to turn into a significant revenue-driving online business.