The Definitive Guide to Amazon Wholesale Dropshipping
Table of Contents
- Introduction
- Advantages of Drop Shipping Wholesale Products
- Higher Profit Margins
- Avoiding Branded Boxes, Receipts, and Shipments
- Long-Term Account Health
- How to Start a Wholesale dropshipping Business on Amazon
- Reverse Engineering Existing Sellers
- Finding Wholesale Suppliers
- Checking for Dropshipping and Profitable Products
- Signing Up for a Supplier
- Getting the Supplier's Product Catalog
- Using Scan Unlimited to Determine Profitable Products
- Using Jungle Scout to Gauge Product Sales
- Using the Free Amazon FBA Calculator
- Using a Repricer to Optimize Prices
- Monitoring Stock Levels
- Avoiding Automated Dropshipping Services
- Conclusion
Drop Shipping Wholesale Products: A Guide to Starting a Successful Wholesale Dropshipping Business on Amazon
Drop shipping wholesale products can be a lucrative business strategy, especially on platforms like Amazon. Compared to retail products, drop shipping offers several advantages, such as higher profit margins and the ability to avoid branded boxes and shipments. In this guide, we will explore how to start a wholesale dropshipping business on Amazon, including the strategies and software to use.
Advantages of Drop Shipping Wholesale Products
Higher Profit Margins
One of the major advantages of drop shipping wholesale products is the potential for higher profit margins. When buying wholesale, you can acquire products at a lower cost, allowing you to set higher prices and increase your profit margin.
Avoiding Branded Boxes, Receipts, and Shipments
Drop shipping also allows you to avoid using branded boxes and receipts. Instead, the products are shipped directly from the wholesale supplier to the customer, giving the impression that the products are coming from you directly. This eliminates the need for inventory storage and shipping logistics.
Long-Term Account Health
Working directly with wholesalers can have long-term benefits for your Amazon account health. Wholesale suppliers are often more reliable and consistent, ensuring a steady supply of products for your business. Additionally, since you are not relying on retail suppliers, you are less likely to face issues such as counterfeit or inauthentic products.
How to Start a Wholesale Dropshipping Business on Amazon
Reverse Engineering Existing Sellers
One method to find profitable wholesale products for dropshipping is to reverse engineer existing sellers on Amazon. Look for branded products that are exclusively sold on other websites. By finding these products listed on Amazon, you can identify sellers who are either drop shipping them or purchasing them second-hand for resale. This information can be valuable in determining the wholesale supplier for these products.
Finding Wholesale Suppliers
Another effective method is to compile a list of wholesale suppliers and then check if they offer dropshipping and have profitable products. Supplier directories like SaleHoo, Inventory Source, and Spark Shipping can provide a starting point for finding reliable suppliers. Additionally, trade show websites can offer insights into various suppliers in the market. Alternatively, you can consider joining an Amazon Dropship Pro course that provides a pre-vetted list of over 11,000 wholesale suppliers.
Checking for Dropshipping and Profitable Products
Before signing up as a supplier, it is essential to check two crucial factors: minimum order quantity and order fulfillment. Ensure that the wholesale supplier does not require a minimum order quantity and offers order fulfillment services. These are indicators that the supplier supports dropshipping.
Once you have signed up with a supplier, obtain their product catalog, which includes an organized list of all their products with prices and identifiers such as SKU or UPC. Use software like Scan Unlimited to compare your supplier's products with Amazon's catalog to identify profitable products to list. Additionally, consider using Jungle Scout to gauge the sales performance of these products.
Signing Up for a Supplier
To sign up for a wholesale supplier, you will generally need a reseller's permit. This permit demonstrates that you are a legitimate business entity engaged in the sale of goods. The process for obtaining a reseller's permit may vary depending on your location, but there are resources available to guide you through the application process.
Getting the Supplier's Product Catalog
Once you have established a wholesale supplier relationship, obtain their product catalog. The catalog provides an overview of all the products they offer, along with corresponding prices and identifiers. This catalog will serve as a reference for identifying profitable products.
Using Scan Unlimited to Determine Profitable Products
Scan Unlimited is a software tool that can be used to compare your supplier's product catalog with Amazon's catalog. This comparison allows you to identify which products have the potential to be profitable. By leveraging Scan Unlimited's data, you can make informed decisions about which products to list on Amazon for dropshipping.
Using Jungle Scout to Gauge Product Sales
In addition to profitability, it's crucial to gauge the sales performance of a product to ensure its viability for dropshipping on Amazon. Jungle Scout is a software tool that provides insights into a product's sales performance, allowing you to assess its demand and market competitiveness. By using Jungle Scout, you can identify products with a high likelihood of generating sales.
Using the Free Amazon FBA Calculator
To determine the lowest price at which you can sell a product on Amazon and still be profitable, utilize the free Amazon FBA (Fulfillment by Amazon) calculator. This calculator takes into account various factors, such as the item's cost, Amazon's referral fees, and FBA fees. By inputting these values, you can identify your break-even price and set it as the minimum price in your repricer.
Using a Repricer to Optimize Prices
A repricer tool can be invaluable for optimizing prices and winning the buy box on Amazon. Consider using the free repricer provided in Amazon Seller Central, as it offers the necessary functionality for beginners. Set your minimum price to the break-even price determined using the Amazon FBA calculator. Monitoring and adjusting prices is essential to remain competitive and maximize sales.
Monitoring Stock Levels
As a dropshipper, it is crucial to monitor the stock levels of your products regularly. Make sure you never sell an item that is out of stock on your supplier's website. Consider using tools like SKU Grid or maintaining a spreadsheet with URL links to your listed products. By checking your supplier's website frequently, you can ensure that your listed products are available and adjust your listings accordingly.
Avoiding Automated Dropshipping Services
While there are websites and services that offer fully automated dropshipping solutions on Amazon, it is recommended to avoid them. These services typically work with retail suppliers, which can lead to issues such as counterfeit products and account suspension. Building a sustainable dropshipping business requires putting in the effort to find reputable wholesale suppliers and manually managing your inventory and pricing.
Conclusion
Starting a wholesale dropshipping business on Amazon can be a profitable venture if done correctly. By reverse engineering existing sellers, finding reliable wholesale suppliers, and utilizing software tools like Scan Unlimited and Jungle Scout, you can identify profitable products to list on Amazon. Monitor stock levels, optimize prices using a repricer, and avoid automated dropshipping services to build a sustainable and predictable business. With dedication and strategic implementation, you can establish a successful wholesale dropshipping business on Amazon.
