Dropshipping Amazon

To give you an understanding of what dropshipping for eBay and Amazon is, dropshipping is selling something you do not own. This might sound illegal, but it's not. Dropshippers are companies that provide products for sale and will ship the product directly to your client once you pay for it. Here's how eBay drop shipping works:

How eBay Drop Shipping Works

• You find a company to source your products and that would agree to dropship.
• You list their product on eBay, Amazon or your website for sale without the need to purchase the items. This eliminates tying up money in stock.
• When the item sells, you collect the selling price and the shipping cost from your customer.
• Now you send the wholesale price + the handling and shipping fee to the dropshipping supplier.
• The supplier then ships the item directly to your client.  
• Your profit is the difference between the retail and the wholesale price.

There are downsides of Dropshipping for eBay and Amazon.

• Lack of control whenever you dropship, you're at the mercy of the shipper since they handle and have control over the packing and shipping experience.
• Poor service from a drop shipper can negatively affect your client satisfaction ratings on eBay and Amazon.
• You have no control over their inventory. A drop shipper typically does not warn you about their low inventory level, you might end up selling an item that they can't deliver. This puts you in a really bad position with eBay and Amazon.
• Listing products without the need to purchase the items eliminate risk when something does not sell. Your only risk is the shipping rates, product depth, and variety. When you purchase products to resell, you're limited in the number and type of products you can sell by the amount of money or credit you have to buy the item from your supplier.

Whenever you dropship, you can list a lot more products for sale, however, there are two main types of drop shippers and it's essential to know and understand the difference between the two: the Manufacturers or Master Distributors and the Aggregators. Let us look at each type first to decide what type of company you wish to work with.

The Manufacturers or Master Distributors are the main suppliers or providers of the products that you are going to sell on eBay, Amazon, or your own website. You source the products directly from them without going through other distribution channels.

Dropshipping Aggregators, also known as Dropship Warehouse Companies are essentially the middlemen. They advertise heavily online claiming to have millions of brand name products you can sell online. A lot of them also offer pre-made websites loaded with these products. These firms list products in a virtual warehouse which other real wholesale companies have in their inventory.

Aggregators do not really have any products in stock. If you sign up with one of those companies, you'll soon find that all of the product they offer is already selling on eBay or Amazon for about the same cost they're offering it to you. When you order something from them, they order it from the real wholesaler, markup the cost and/or charge you a fee. Because of this, it's very difficult to make any money as they've essentially made and taken a big piece of your supposed profit.