The Truth About Drop Shipping On Amazon [dropshipping on Amazon]
Transcribe of “The Truth About Drop Shipping On Amazon [dropshipping on Amazon]”
Dropshipping on Amazon
– Hey guys Neil Waterhouse. In this video I want to explain how to set up yourself for drop shipping on Amazon for the long term. Just for the newbies out there. Dropshipping on Amazon means listing items on Amazon before you purchase them. And then after the items sell and you get paid. You then purchase them from your suppliers. And your suppliers ship the items direct to your customers.
Drop shipping on Amazon is a cash flow positive strategy
In other words drop shipping on Amazon is a cash flow positive strategy. You never need to see, touch or ship the product yourself. And you also don’t need to pre-purchase inventory before you’ve sold it. You only purchase the inventory after it’s sold. Okay, my first rule to dropshipping on Amazon is to never use overseas suppliers. Like AliExpress, Banggood, et cetera as when the items arrive late. Your Amazon listings get defects and bad reviews.
Dropshipping on Amazon is to never use overseas suppliers
Yes I know I’ll get a lot of flak for saying this. Because there are so many people out there saying to use AliExpress for drop shipping on Amazon and other overseas suppliers. You know, if you’re Amazon, eBay dropship business. But the reality is, I’ve been dropshipping for over 30 years and selling online for over 20 years. I’m also the founder and host of the four largest eBay and Amazon meet-up groups in Australia. And also the creator of Dropship Formula so I get to see the sellers who are making the most money. I also get to see sellers who have been around the longest and get the least amount of defects and negative feedback.
Who is making the most money drop shipping on Amazon
Drop shipping on Amazon using overseas suppliers like AliExpress can give you some quick money and you can sometimes get away with selling overseas items on your own independent website. Like a Shopify store, but if you’re in this for the long haul, dropshipping on Amazon and eBay, you know. I highly recommend you only use suppliers which meet the following five criteria.
Criteria of Using suppliers
Now number one for drop shipping on Amazon, only use suppliers which are based in the country you are building your business for. Now just because you live in Canada, Australia, UK, USA. Or wherever does not mean you’ve got to build that dropship business in that country. dropship business are online. So you can build them in almost any country that Amazon or eBay are located. The last time I checked eBay was located in 27 countries and Amazon was in 30. Now we’ve built this business in USA, Australia, Canada, Ireland, UK, Spain, et cetera and you can. You know, you can do the same as well.
Who is making the most money
You can also build multiple dropship businesses in multiple countries. And you can also sell them as a capital sale which I’ve talked about before but that’s for another video. Now the second criteria for suppliers is, they must be able to dispatch within two business days. Don’t use suppliers that cannot dispatch within two business days, because you know, buyers don’t like to wait for what they’ve purchased, you know, a buyer may have taken six months to finally make up their mind to buy something, but once they’ve decided they want it quickly.
The third criteria for suppliers is a supplier must have what we call a dynamic website
Now the third criteria for suppliers is a supplier must have what we call a dynamic website. And that’s a website which shows whether or not the supplier has the item in stock. You know, obviously when you list a dropship item on Amazon, eBay or your own website, you need to make sure the item is available at all times.
The great part
The great part here, is as long as the supplier has a dynamic website, we can automate the process of making inventory go to zero on your listing if your supplier runs out of stock. Now this of course is to stop overselling an item. Now the fourth criteria for your supplier, is the supplier must be able to ship items with no invoice. Obviously if you’ve sold an item, you know, on, whether it’s Amazon, eBay or your own website for say 500 dollars, you have to make sure the supplier doesn’t put an invoice in the box for say 300 dollars made out to yourself.
The fifth criteria
Now the fifth criteria for your supplier is they must be able to box the items without putting them in some well-known retailer box i.e. Kmart or Target et cetera. You know, if an item turns up to your customer in a box that’s say got Kmart written on the side of it this creates what’s know in the industry as buy confusion i.e. you can, your customer purchases an item from you on eBay, Amazon or your own website and then the item rocks up in a Kmart box.
How do i find out if my suppliers meet these five criteria?
So, you know, you might be thinking how do I find out if my suppliers meet these five criteria, the first thing is don’t ring them up and say hey do you dropship because that just creates a whole load more confusion because a lot of people, suppliers don’t even know what the word dropship is. Is simply, to find out, you need to either call them, email mail them, or live chat them if they have live chat and you only ask those questions. You’ve only gotta do this once for each new supplier before you put any new dropship supplier on your supplier list.
Quick steps for drop shipping on Amazon
Now just take a quick step back to AliExpress and other overseas suppliers, you can get away with using AliEpxress and other overseas suppliers for your own independent website i.e. Shopify store but you know, that’s a whole different video. You know, as a pros and cons of a Shopify store is you know, it’s reasonably quick to set up a Shopify store but the downside is you have to put in place a methodology to drive traffic to your store.
Product Listings Ads
This can be Facebook Paid Advertising, or Google Product Listing Ads or they’re also known as PLA which you know is obviously short for Product Listing Ads. You know, and that’s kind of what they’re known in the industry. But the down side of this type of advertising is, it takes a fair whack of time to learn it and it costs money to advertise on these platforms.
SEO Drop shipping on Amazon
Yes you can do you know, SEO drop shipping on Amazon and all that kind of, but you know, but that’s another story you know and people think of SEO is free, no it’s not, you know, we’ll get to that in another video. But bottom line, you know, about dropshipping on Amazon, if you’re in it for the long term, only use suppliers which meet the five criteria above. That’s all for this week. No matter where you’re watching this, please scroll down and leave me a comment below. Until next week, list more, sell more. This is Neil Waterhouse.
Please leave me a comment below and let me know what you think.
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Neil, thanks very much for the advice. The five criteria for picking shippers are very helpful. I’m not quite used to your interesting accent, however, and I didn’t understand item #4, something about not letting the shipper include an invoice in the box, but didn’t understand why. Also, I would like to build a site and sell products online — do you have a PDF or series of videos that walk people through the best way to set up such a business? Thanks. Roy Varner, LaunchClub member.
Hi Roy, you are very welcome.
Yes I do have a video series, please see https://www.neilwaterhouse.com/drop
I use dropshippers in USA for USA and Netherlands for worldwide (a very unique product) and UK for UK and Europe! Works well BUT in addition to what Neil says make sure that your supplier has a RETURNS label either to You or the dropshipper! We had almigty confusion when the customer returned to the dropshipper when they were supposed to return to US!
Also – send your suppliers flyers which they must include with the product – this helps to ensure they know where the bought the item from and of course x-sales and future sales!
would you like to share name of your USA supplier or ow you found them other than saying google or internet
Hi Mike, please see https://www.neilwaterhouse.com/drop
Thanks Neil. Very helpful’
Your very welcome Tony.
I just wanted to ask why you keep saying you can dropship on eBay?
It’s against eBay rules to dropship on eBay and you can find it by googling can you dropship on eBay?
I did and the answer is NO.
eBay does allow drop shipping.
Here is a screenshot https://www.screencast.com/t/t6qRmZK1uW6
And here is the link from eBay.
https://www.ebay.com.au/help/policies/selling-policies/third-party-fulfilment-policy?id=4718Dropshipping will always be around as it is fulfilment strategy which is very similar to companies who use their own independent warehouses.
What eBay does not like is complaints from buyers and one of the main complaints is when items arrive from suppliers like Amazon and Kmart with their own branding on the boxes. This creates buyer confusion as the purchaser purchased from eBay but it arrives in a Amazon box.
This is the reason I have been saying for years to not use companies like Amazon and Kmart as suppliers.