Throughout the years, there are lots of Amazon drop shippers who crash and burn. On the other side of the coin, some drop shippers have seen a 50% increase in profits once they joined Amazon’s platform.
No doubt, Amazon – full of contradictions yet being the eCommerce giant – is a powerful platform to leverage, giving you access to a massive and diverse audience at a minimal marketing effort.
However, you should approach Amazon with professionalism… and caution. Though if you made through the first holiday shopping season, you’re doing pretty good. But don’t jinx it. You’d still need to stay alert as Amazon constantly updates its policies and tools and there’s always the possibility that you unintentionally violate a policy and guess what?… get suspended!
There is no working formula for all the drop shippers. As there is not just one contributing factor to your Amazon drop shipping success. Soo… your long-term performance on the platform depends on several key factors: the quality of your product, your marketing endeavors and customer engagement.
Even though this method is inventory-free, fulfillment-exempt and does not even require a warehouse- staying on top of the vast pool of competition takes effort and dedicated monitoring.
Without further ado, here are the keystones to build your Amazon dropshipping success with.
Obtain Permission
Don’t want to be left in the lurch?
Work only with reliable suppliers. One good. Two better. Five – awesome.
Obtain acceptable invoices and full documentation of the supply chain per product and maintain an excellent level of communication with all of your suppliers. This will definitely pay off in the long run.
Don’t settle for anything less if your supplier is slow to communicate or requires bulk orders in advance or asks for subscription fees. If they even run a retail establishment alongside dropshipping – RUN. Find another supplier or distributor.
Pro tip 1: Make sure to sign a Dropshipping Agreement Contract. This will 1. Remove you from liability of your supplier’s actions 2. Protect yourself legally against complicity.
Pro tip 2: Before you sign an agreement or even contact your supplier, buy one item to check the quality in advance. Put yourself in the shoes of your potential customers: inspect the delivery speed, is the product as described and the packaging!
Pro tip 3: Work with several suppliers at the same time to prevent chargeback, low OCR and account suspension. Even though you are sure that your 1st supplier can fulfill all of your orders, split your order among your suppliers and prepare a backup plan.
Don’t Alter Invoices for Any Reason
For Pete’s sake, don’t add a fake invoice in the hope it will cut through Amazon’s Seller Performance team. They see hundreds and thousands of invoices DAILY.
If they spot a manipulated invoice, this will add “forged and manipulated” to your “inauthentic” violation and you can wave goodbye to your store and reach a mission-impossible level to reactivate Amazon seller account privileges.
Pro tip: Admit your wrongdoings to the Seller Performance right away. And YES, including the products you listed but never had them in stock!
Metrics
Speaking of metrics, you should keep in mind that each and every metric is important for your successful business operations.
Experienced drop shippers realize the crucial importance of Amazon’s data and use the data to their benefit: boost sales, grow their product range and maintain eligibility as a seller.
Pro tip: Regularly check the performance notifications as your Amazon presence is dependable on these numbers!
Ensure You Do Not Sell Too Much, Too Soon
Here’s the thing: Amazon has trust issues. Amazon is notorious for having a low tolerance for canceled or inauthentic orders.
Pro tip: Start small, and gradually escalate your sales.
It should be your worst nightmare to receive an order and only then figure out that your supplier is out of stock.
You should sell at least $2000 a month for THREE consecutive months AND less than $20.000 in the first three months, check the metrics and run your account with Amazon-approved percentage of metrics before Amazon trusts you and your brand.
Pro tip 2: When you are sufficiently familiar with Amazon’s regulations and are good friends with performance metrics, it’s time to sell volumes to make a profit.
As the profit margins are low – the only way to make a profit is by selling in larger volume and offering diversity.
Ensure You Have a Good Software
If you are short at helping hands, your go-to strategy should be to integrate monitoring software.
Firstly, the software will monitor your suppliers. Secondly, it will help you keep in sync with the price and inventory level.
Pro tip: Pay attention to its reliability and infrastructure. If the software doesn’t show accurate results and fails to check the products on time – your business is at risk.
Pro tip 2: You can use an integrated re-pricer to adjust your prices in real time with your competitors. It will also help you to hold the buy box, which will drastically increase your sales.
Pro tip 3: Do not solely rely on automated software, have a dedicated team member who checks the inventory on a regular basis.
Consider Hybrid or Fully Operating as an Amazon FBA
If you decide to switch to FBA fulfillment method,
1. You’ll be eligible to offer Amazon Prime,
2. You’ll increase your chance of winning the Buy Box,
3. You’ll get tracking information from Amazon, and
4. You’ll be free from dealing with returns and any other customer-related issues.
BUT,
1. You’ll also get additional fees.
End Thoughts
Amazon safeguards its platform from inauthentic claims and leaves only HQ inventory. Thereafter, it’s as easy to get suspended as counting 1,2,3.
Throughout your drop shipping experience, regularly monitor your account health and remember that you can consult Amazon suspension reinstatement services. These professionals will help you regulate the logistics and inventory, address the issues and prevent any future issues, and tackle Amazon account suspended cases.
Photo by Christian Wiediger on Unsplash
